Over a Year Later, the U.S. and Puerto Rico Fight Over Every Dollar of Hurricane Aid

(Bloomberg) -- Seventeen months after Hurricane Maria, the remote Puerto Rican island of Vieques is still waiting on federal money to rebuild its hospital.

It won’t arrive in time to give Zuleima Nieves peace of mind.

She and Vieques’s other 9,000 residents depend on a makeshift clinic in a former storm shelter and three trailers for dialysis, dentistry and basic care. But the 22-year-old with hyperthyroidism is about six months into a high-risk pregnancy and must travel to San Juan every every two weeks for checkups. When labor pains arrive, it’s time to race to the “big island.”

“If something happens here in Vieques, they won’t be able to care for me,” said Nieves, a lifelong resident of the former U.S. Navy outpost about eight miles east of mainland Puerto Rico.

Over a Year Later, the U.S. and Puerto Rico Fight Over Every Dollar of Hurricane Aid

Across the commonwealth, citizens are struggling as a projected $55 billion in aid arrives at a trickle and the White House falters in its support of rebuilding. This week, President Donald Trump promised “the A Plus treatment” for residents of tornado-torn Alabama, a state where he enjoys strong support. But he has opposed future help for Puerto Rico and falsely claimed that the bankrupt island wanted to use aid to pay its more than $70 billion debt. Recently, the White House even considered raiding recovery funds allocated by Congress to pay for a U.S.-Mexico border wall.

Maria killed an estimated 3,000 people in the months after its September 2017 landfall, which leveled homes and businesses and wiped out electricity. So far, the commonwealth has identified 7,505 rebuilding sites and delivered 4,792 reports to the Federal Emergency Management Agency seeking major repairs. Only 67 projects are proceeding, according to Puerto Rico’s government. In a similar period after Hurricane Katrina in 2005, the last U.S. hurricane approaching Maria’s magnitude, more than 9,000 were underway.

FEMA is sending $2.95 billion to individual Puerto Ricans and has designated $5.43 billion to so-called public assistance, rebuilding government infrastructure and services. But the lion’s share of the latter was for help in the storm’s immediate aftermath: $4.24 billion on “emergency protective measures,” an umbrella category led by $1.89 billion to restore the rickety energy grid to minimal function.

Over a Year Later, the U.S. and Puerto Rico Fight Over Every Dollar of Hurricane Aid

Only $371.3 million is going to what FEMA calls “permanent work” — restoring infrastructure and facilities to predisaster levels. Of that, only $35 million has actually been disbursed, mostly for roads and bridges.

The commonwealth blames a requirement that FEMA control disbursements, unlike mainland jurisdictions where local officials do. The agency, led by soon-to-depart Brock Long, says the system guards against misspending by a dysfunctional government.

“FEMA makes it very easy to get money,” said Justo Hernandez, FEMA's deputy federal coordinating officer for Puerto Rico. But, he said, the agency is proceeding deliberately to ensure the commonwealth doesn’t get in trouble. “FEMA gets blamed for everything.”

Puerto Rico has been treated differently from the outset. A University of Michigan report in the BMJ Global Health journal studied critical periods after Maria, Hurricane Irma in Florida and Hurricane Harvey in Texas. The federal government took 30 times as long in Puerto Rico to achieve Florida’s staffing rates, it found. And 30 days after Maria, only $116.3 million federal dollars were in survivors’ pockets, compared with $1.09 billion in Texas and $847 million in Florida.

“We need to go to the root cause, which is Puerto Rico is a colonial territory of the U.S.,” Governor Ricardo Rossello said in an interview last month in Washington. “It’s always going to be a powerlessness issue.”

Omar Marrero, executive director of Puerto Rico’s Central Office of Recovery, Reconstuction and Resiliency, described endless debate over the cost and scope of projects — including what constitutes a project in the first place. A proposal was drawn up for each site, but FEMA wants a proposal for each sub-task, he said, effectively creating a sixfold increase.

Over a Year Later, the U.S. and Puerto Rico Fight Over Every Dollar of Hurricane Aid

Puerto Rico has been chasing money for the Vieques hospital since weeks after the storm, Marrero said. FEMA first planned a new structure for $26 million, an estimate that rose to $57 million. Then, the agency proposed $1 million merely to rehabilitate the original building, he said. FEMA’s Hernandez said a 20-member team finished a final assessment in January and an independent panel will decide in March.

Meanwhile, Diana Rivas, a 60-year-old cancer patient in remission, said some fellow sufferers chose to die rather than spend days journeying for chemotherapy and radiation. Patients must wake at 4 a.m., take an hour-long ferry and then be driven two hours into San Juan. The ferries can be unreliable; just last weekend, the breakdown of two vessels disrupted cargo transport, prompting the governor to activate the National Guard to deliver food and medicine.

“If you want to save your own life, you have to travel to the big island and pray that nothing happens on the way there,” Rivas said.

Even before Hurricane Maria, Puerto Rico’s finances were already under the federal government’s eye. Congress created an oversight board in 2016 as part of a bankruptcy deal after decades of free spending and debt became unpayable amid recession.

“You have all these unprecedented levels of control,” Rossello said.

Over a Year Later, the U.S. and Puerto Rico Fight Over Every Dollar of Hurricane Aid

The commonwealth is pursuing other federal funding beyond FEMA. The U.S. Department of Housing and Urban Development said last week it’s making the island eligible for $8.22 billion in disaster block grants on top of about $1.5 billion it already allocated. But in a press release, the department said it had “serious concerns over Puerto Rico’s past fiscal irregularities,” and pledged “strict conditions and financial controls.”

Puerto Rico and its creditors have factored promised relief into their projections. The oversight board, which is drafting a plan to enable a debt restructuring, is projecting the economy will expand 7.8 percent in fiscal 2019 and 5.5 percent the following year.

Jose Caraballo Cueto, a University of Puerto Rico economist, said delays would require revisions, hurt creditors and could drive residents to join 400,000 fellow citizens who have decamped for the mainland in the past five years.

Among them might be Nieves, the woman awaiting her first child. She’s starting to think it might be time to leave her lifelong home.

“I’m here for now, but if things get bad or I feel something, I’m heading to San Juan," she said. "I’m not putting myself or the life of my baby at risk.”

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