HUD Officials Admit Holding Back Disaster Aid for Puerto Rico

Two HUD officials recently admitted to a House subcommittee that the agency knowingly withheld a funding notice for Puerto Rico disaster aid. HUD was scheduled to publish funding notices for 18 areas affected by natural disasters in recent years, but Puerto Rico’s was the only funding notice that did not get published.

The HUD officials addressing the subcommittee were Chief Financial Officer Irv Dennis, and David Woll, principal deputy assistant secretary for community planning and development. Woll admitted that HUD had no statutory authority to miss the funding notice deadline. 

In June, President Trump signed a supplemental disaster aid bill. It included $19 billion for disaster mitigation. These funds pay for large projects to help communities weather future severe storms, like building seawalls and hardening electrical grids. Because of the widespread damage to its infrastructure during Hurricane Maria, Puerto Rico was slated to receive $8.3 billion, the largest share of these funds.

When the law passed in June, Congress set a September 4 deadline for HUD to issue the funding notices for each of the states affected by natural disasters. The notices lay out the guidelines for preparing mitigation plans and applying for the funds. They also require the states to plan for avoiding fraud and abuse. In the end, Puerto Rico was the only area that did not receive a funding notice. Until HUD publishes a funding notice, Puerto Rico will not be able to access these funds to rebuild its infrastructure.

The two HUD officials tried to justify HUD’s delay in making funds available because of “alleged corruption,” “fiscal irregularities” and “Puerto Rico’s capacity to manage these funds.” Woll pointed to the unrest this summer that forced the resignation of the island’s governor, and noted the territory’s decade-long financial crisis as another concern.

In addition, they said that they were waiting on a report from HUD’s Office of Inspector General (OIG) before releasing the notice. The OIG is investigating Puerto Rico’s capacity to properly handle large sums of disaster aid. The OIG, however, has said that the audit would not have serious or significant findings. The OIG also said that it did not recommend that HUD withhold funding from Puerto Rico.

At the hearing earlier this month, Representative David Price (D-NC) said that, “HUD did fail to comply with the law,” and that it should not be a difficult choice to adhere to the law.  Representative Nita Lowey (D-NY) told Woll and Dennis, “No caveats. No carve outs. No exemptions. It’s not just unacceptable: It is unlawful.”

Even the top Republican on the subcommittee expressed concerns. According to Newsweek, Representative Mario Diaz-Balart (R-FL) said, “Look, I understand that there may be factors outside of our witnesses’ control that led to miss this deadline. But I’m troubled -- I’m always troubled and I don’t care which administration [does] it -- when any administration doesn’t meet requirements set in statute.”

Secretary Carson also defended the agency the following day, echoing the same talking points that instability in the Puerto Rican government justified delaying the funding notice. Carson said he was not willing to “put an unprecedented amount of money without the appropriate controls” in “a jurisdiction in which there are three changes of government within a month” and “has historically had difficulty with financial management.”

Although the governor’s office has experienced turmoil, the territory’s housing department, called Vivienda, has not been involved in the controversy. At the HUD appropriations subcommittee hearing, Representative Katherine Clark (D-MA) pointed out hat Vivienda had not been indicted in the governor’s scandals. Woll agreed with Clark that the agency’s head, Fernando Gil-Ensenat, is an “honorable head of housing.” 

Lawmakers at the hearing pointed out that the funding legislation includes requirements for financial safeguards. There are financial monitors already in place to review Puerto Rico’s earlier awards. The review of the action plan required under the funding notice includes HUD approval of the financial controls that will be proposed by Puerto Rico.

This most recent delay in aid to Puerto Rico follows a pattern with the Trump administration. Congress has approved a total of $20 billion in Community Development Block Grant-Disaster Relief (CDBG-DR) funding for the territory. HUD has been slow in making these funds available to Puerto Rico. One senior HUD official reportedly resigned partly because of the delays in helping Puerto Rico. Two years after Hurricane Maria struck, Puerto Rico has only received $1.5 billion in CDBG-DR funding. 

Puerto Rico desperately needs the aid that Congress has provided. Between 20,000 and 25,000 homes still lack permanent roofs, with blue FEMA tarps a common sight. The island’s infrastructure needs to be rebuilt to withstand future hurricanes. Whatever the reasons for HUD’s delays, they only hurt millions of American citizens in Puerto Rico.