Liddick: Puerto Rico a cautionary tale
November 6, 2017
"I looked up "fubar" in the German dictionary, and there's no fubar in here…" Corporal Upham, "Saving Private Ryan"
But efforts to restore power in Puerto Rico might have provided the illustration.
We know bits of the story: A large hurricane takes out most of Puerto Rico's electrical grid, plunging the island into the chaos a modern society suffers when the power goes out for more than a few days. But there is much more to see here.
News stories paint unflattering pictures of an island and a government unable to address the challenges of restoring basic services before Hurricane Maria hit. The Puerto Rican electricity authority, PREPA for short, made plans for post-hurricane repairs with Whitefish Energy, a small Montana-based utility service company. After the storm passed, Whitefish contracted service employees, moved personnel and materiel onto the island, and commenced contracted repairs. Then another storm broke.
It is a tale of self-inflicted ruin exacerbated by natural disaster, and we ought to pay attention.
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There were allegations of corruption. Since Whitefish Energy is headquartered in Whitefish, Montana, hometown of Interior Secretary Ryan Zinke, who represented that district in Congress. And since Zinke and Whitefish's chairmen knew each other, there was hanky-panky, right? Never mind that the area around Whitefish is rugged and inaccessible — like a lot of the territory the company would be serving in Puerto Rico. Overlook the lack of any concrete proofs. This looked fishy, not least because of PREPA's history of massive corruption. So early last week, following a good deal of huffing and puffing among America's political classes, executive director of PREPA Ricardo Ramos said of the contract, "the best thing that can happen is its cancellation." This was the same Ramos who on Oct. 20 defended the contract effusively, saying that PREPA had reviewed a list of seven suitors for electricity repair before choosing and that the contract contained strict performance clauses. Whitefish was fired anyway. This set re-electrification of most of Puerto Rico back between four to six weeks.
Following the cancellation, 39 days after Hurricane Maria hit the territory, Puerto Rico's Governor Ricardo Rosselló finally requested assistance from Florida and New York under "mutual aid" arrangements utilities traditionally activate during emergencies. The territory had not previously done so and had not responded to offers of assistance.
The Whitefish imbroglio re-surfaced questions about who manages finances and recovery at the bankrupt electricity authority in the bankrupt U.S. commonwealth. At present, a federal judge is overseeing the restructuring of the island government's more than $70 billion in debt. Last week, a financial control board created by Congress requested authority to examine contracts as small as $10 million, and said it would install an emergency manager at PREPA to review contracts and monitor the day-to-day operations of the utility. Governor Rossello opposes the appointment and said he would name his own PREPA administrator. The governor, like many Puerto Ricans, has been battling the influence of the oversight board, complaining the U.S. government acts like a colonial ruler.
Thus a corrupt and bankrupt government argues with its receivers and their managers over an incompetent, corrupt and bankrupt electrical utility while political foes all seek their own advantage amid the ruins. And the people of Puerto Rico, already burdened with the physical devastation wrought by a natural disaster on an overburdened, mismanaged and antiquated infrastructure, suffer further indignities while they wait for the government to sort itself — and its finances, authority and priorities — out.
Meanwhile, the year grinds into November, traditionally the beginning of the tourist "high season" in this formerly lush and welcoming slice of Caribbean America. Tourism was a modest but growing sector of Puerto Rico's otherwise-contracting economy. In 2015, it provided about 8 percent of the island's GDP. But tourism presupposes basic necessities like a clean water supply, proper sewerage disposal, electricity, useable roads and functioning services. Right now Puerto Rico offers none of these, and none are in immediate prospect. So further blows to its already-prostrate economy will follow.
Puerto Rico offers a cautionary tale. This is what happens when corruption infects the state; when personal cupidity of the political class trumps all and officials think the gravy train will roll forever; when the government employs more than a quarter of the entire workforce and employment is controlled by political parties. When incompetence is covered by cronyism and kickbacks. It is a tale of self-inflicted ruin exacerbated by natural disaster, and we ought to pay attention.
There, save for God's grace, go we. But for how much longer, no one knows.
Morgan Liddick writes a weekly column for the Summit Daily News.
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