EXHIBIT 31 

Case:17-03283-LTS Doc#:4014-27 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 31 Page 1 of 5
ROB BISHOP OF UTAH 

CHAIRMAN 

CODY STEWART 

STAFF DIRECTOR N.@>. Jlnus.t nf 1Rtprtntntatiutn 

Qt.ommittcc nn Natural i!lc.anurrc.a 

lll!la.s.qingtnn. men 20515 

Mr. Justo Gonzalez 

Interim Executive Director 

Puerto Rico Electric Power Authority 

1110 Ave. Ponce De Leon 

San Juan. PR 00907-3802 

Dear Mr. Gonzalez: 

March 12, 2018 

RAUL GRIJALVA OF ARIZONA 

RANKING MEMBER 

DAVID WATKINS 

DEMOCRATIC STAFF DIRECTOR 

As of March 7, 2018, approximately 155,695 Puerto Ricans remain without power after 

Hurricanes Maria and Irma struck the island. 1 As part of its on-going oversight of Puerto Rico's 

recovery,2 the House Corrup.ittee on Natural Resources is reviewing multiple allegations of 

corruption and gross mismanagement in the power restoration process made against the Puerto 

Rico Electric Power Authority (PREP A). Much of the reported corruption concerns PREP A 

officials accepting or demanding bribes to restore power to residences and businesses.3 

In one alleged incident, PREP A officials were reportedly paid $5,000 and provided free 

entry tickets, valued at $1,000 apiece, to restore power to San Juan area exotic dance clubs ahead 

of the scheduled restoration timeline.4 There are also allegations that PREPA restored power to 

their own homes and other areas before restoring power to critical locations such as San Juan's 

Rio Piedras Medical Center and the Luis Munoz Marin International Airport. 5 In addition to 

betraying the public's trust, improper, out-of-sequence power restoration has been associated 

with at least two fires and complicates scheduled power restoration operations.6 

1 Hurricanes Maria & Irma: March 7, 2018 Event Summary, Report #94, 2, U.S. DEP'T. OF ENERGY, 

INFRASTRUCTURE SECURITY & ENERGY RESTORATION (Mar. 7, 2018) available at 

http,;: 11·1111·.cnt'rl!\ .l!t11· siies 'prod tiks '20 IS "O 1 l'..!9. l-lun-ica11,:~0 "'>()~ laria 0 u20and" u1 0lnna 0 u 1 0[1·en1" o '>0Summ~r\' 

~o20Februan" ,,202S0 u2C'~ 11 2020 I S.pdf. . 2 Letter from Hon. Rob Bishop, Chairman, H. Comm. on Natural Resources, and Hon. Bruce Westerman, Chairman, 

Subcomm. on Oversight & Investigations, to Ricardo Ramos, Executive Director, Puerto Rico Electric Power 

Authority (Oct. 26, 2017) available at hllp,;:/i11:1turalre,;oun.:c~.housc.l!o1· uplua,bllib '20 I 7-10-

26 bi,;h~1p 11·e,;1am:rn to r:11110::; prepa re emsa.pdf; 

3 Nsikan Akpan & Monica Villamizar, Puerto Rico Energy Authority Investigates Dozens of post-Maria Bribe,y 

Cases, PBS NEWS HOUR (Jan. 14, 2018) available at h1q1,;: \\·1111·.pbs.on.! 11e11,;hour naLi'-m puerw-ricu-e11erl!\'-

aull1L1riL \'-in 1 .:.,1 i l!,11es-ck1ze 11s-of-pL1s1-ma ri:i-bribcry-ca:;;e,;. 4 Yaritza Rivera Clemente, Destapan lrregularidades al Energizer [Irregularities Uncovered in Power Restoration], 

EL VOCERO (Feb. 26, 2018) available at h11ps:;/1nn\ .ell occrL1.c,1m l!UbicrnLl dc,;1.1p:1n-irre!!ul:1rid:1dcs-al-

~·ncrl!iz:1r article SI clbJba0- 1 a9a- l I e8-S222-8bddccfd-1ac9.h1111 I. 

s Id. 

6 Id. 

http://natu ral resources. house.gov 

Case:17-03283-LTS Doc#:4014-27 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 31 Page 2 of 5
Mr. Justo Gonzalez 

March 12, 2018 

Page 2 · 

A member of the Committee has heard from constituents currently working to restore 

power in Puerto Rico under mutual aid agreements, that utility crews are delayed or unable to 

complete electrification projects because of a lack of materials from PREP A.7 Similarly, the 

U.S. Army Corp of Engineers (USA CE) identified material and equipment shortages as the 

biggest challenges to restoring electricity on the island.8 There have also been media reports that 

utility crews are frequently idle due to a lack of materials.9 For example, one municipal official 

estimated that "fifty percent of their time was lost," because PREP A did not have the necessary 

materials available. 10 

. The Committee has been reviewing the circumstances surrounding a January 6, 2018 raid 

by the USA CE and the Federal Emergency Management Agency (FEMA) on a PREP A owned 

warehouse.

11 Located near PREP A's Palo Seco Power Station, "Warehouse 5" contained 

"critical material" for electrification projects that PREP A allegedly failed to distribute. 12 The 

USACE stated that Warehouse 5 was missing from PREP A's computer inventories 13 and that 

repeated requests to PREP A for specific information on Warehouse 5 went unanswered. 14 After 

inventorying the Warehouse's contents, USACE distributed the materials to contractors, 

including steel sleeves essential for rebuilding powerlines. 15 

PREP A's explai:iations for Warehouse 5 and its inventory have been contradictory and, 

frankly, inadequate. Immediately after the raid, PREP A claimed that the Warehouse contained 

materials used for past infrastructure projects, outdated surplus supplies, and recycled parts, all 

of which was inadvertently overlooked during the recovery. 16 Following the USACE's 

distribution of the Warehouse's inventory, PREPA's account changed. PREPA officials then 

claimed that the USACE was aware of Warehouse 5 and that the materials in the Warehouse 

were intended for current, not past, infrastructure projects and were not suitable for general 

power restoration operations.

17 

7 H. Natural Resources Comm., Subcornm. on Oversight & Investigation staff discussions with Office of Rep. Doug 

LaMalfa (Feb. - Mar. 2018). 

8 Nicole Acevedo, Why does Restoring full Power in Puerto Rico seem like a Never-Ending Task?, NBC NEWS (Feb. 

19, 2018) available at ll!lP< "'" \I .11b.:11.:11·u·u111 .-;t,)i'\ I inc put:'n,1-ri..:1h.:ri,i ~ 11 h 1 -d,1..::,-r..:,t,1rin~-l'ull-po11·cr-put:'rWricl)·:-s:=cm-11c=1\?r-cnJ i n~-nS-1 7 21 I. 

9 Id.; see also David Fe_rris, How Shortages are Worsening Puerto Rico 's Blackout, E&E NEWS: ENERGY WIRE (Feb. 

26, 20 18) available at l1ttp,: 11 11·11 .c't:' llc 11·s.11cL\wric, · 10600 7-1 7 13. 1

° Ferris, supra note 9. 

1 t Danica Coto, More Equipment, Crews Head to Puerto Rico for Power Boost, ASSOCIATED PRESS (Jan. 9, 2018) 

available at htt p,;: ·ap11c:11 s.rnm I ccd..:O )ad9dc-l 39cb )bL·5S 1()217baaff; see also 

12 Akpan & Villamizar, supra note 3. 

13 Id. 

14 Alex Figueroa Cancel, PREP A "Warehouse 5" was No Secret, EL NUEVO DIA (Jan. 16, 2018) available at 

http,: 111111 . ..:I nu~·1 L•d i:1.l''-1111 en~ I i.,;h cn!!.1 i.-;lt th)ta prt:'pa1rarchousc'511 asnps..:.:rc'l · 23903 I I . 15 Adrian Florido & Marisa Penaloza, Puel'to Rico Governor Asks DOI to Investigate Island's Public Power Utility, 

NPR NEWS (Jan. 11, 2018) available at W!p,: 111111 .11pu1rl! 20 IS 0 1 'l I 577-lJlJ 1 -l-l puL'rlL1-riL·u-l!(>1 crnor-ask,;-cl0 jt,1-i11 ,\·,..til!:-tk-i~la11d-,-publ i-:-p'-111 a-uti Ii l 1· 1

6 Akpan & Villamizar, supra note 3. 17 Cancel, supra note 14. 

Case:17-03283-LTS Doc#:4014-27 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 31 Page 3 of 5
Mr. Justo Gonzalez 

March 12, 2018 

Page3 

These latest allegations of corruption and mismanagement raise serious questions 

regarding PREP A's internal controls and ability to competently manage power restoration in 

Puerto Rico. Billions of taxpayer· dollars are pledged to help Puerto Rico, but a lack of faith in 

Puerto Rico's institutions remains a major barrier to recovery. I& 

The Committee seeks to better understand the scope of alleged corruption in PREP A's 

power restoration operations and to understand how PREP A failed to account for Warehouse 5. 

Therefore, to assist the Committee's oversight of Puerto Rico's recovery efforts, please provide 

the following documents and information to the Committee as soon as possible, but no later.than 

5:00 p.m. on March 26, 2018: 

1. Documents sufficient to show all open PREP A investigations into 

allegations of corruption, favoritism, or abuse of authority by 

PREP A employees, officials, or contractors; 

2. Documents sufficient to show PREP A's policies and procedures 

for investigating allegations of corruption, favoritism, or abuse of 

authority by PREP A employees, officials, or contractors; 

3. Documents sufficient to show the contents of PREP A's 

"Warehouse 5" located in the Palo Seco neighborhood of San Juan 

from September 20, 2017 to the present; 

4. All documents and communications referring to or relating to 

PREPA'_s "Warehouse 5" or any materials stored within the 

Warehouse, since September 20, 2017; 

5. The January 31, 201 8 Puerto Rico Department of Justice report on 

the PREP A Warehouse 5 investigation; and 

6. Document sufficient to show PREP A's policies and procedures for 

inventorying, warehousing, tracking, and distributing equipment 

needed for power restoration and electrical grid construction. 

In addition, please preserve all records, documents, data, and communications of any 

kind, regardless of format, that relate to or refer to Warehouse 5 and any allegations that PREP A 

employees, officials, or contractors demanded or received bribes, gifts, or improper 

consideration of any kind in exchange for restoring power to businesses, residences, or 

government agencies and municipalities since August 30, 201 7. 

18 Kath ya Severino, How Latest Federal Appropriations for Disaster Relief Help Puerto Rico, CENTRO: CENTER FOR 

PUERTO RICAN STUDIES, THE CITY UNIVERSITY OF NEW YORK (Feb. 15, 2018) available at 

l.!!--112,: _L'L'll l.Ji'l'd1u 11\.<;'r.cu11 ,· .c:du c'\ c'lll~- 11.:11·~ 11u..:rh i-ri..:1 1-nc·11, L.,,,1~r-:,, ill >11 -Lll<',l-l('d<.'r:il ·anpn111ri.11 iL•n,-d i ,,htcr1'<.' I ic· r-hc· I ()-[lllC rtu. 

Case:17-03283-LTS Doc#:4014-27 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 31 Page 4 of 5
Mr. Justo Gonzalez 

March 12, 2018 

Page4 

Further, please confirm in writing that PREP A has produced all relevant documents 

responsive to the Committee's October 26, 2017 lett'er. 19 

Please deliver your response to room 1324 of the Longworth House Office Building. The 

Committee prefers if possible, to receive your response in electronic format. An attachment 

contains additional instructions for responding to the Committee's request. 

Please contact John Strom and Melissa Beaumont of the Oversight and Investigations 

Subcommittee staff at (202)-225-7107 with any questions about this request. Thank you for your 

prompt attention to this matter. 

Sincerely, 

~ G~----'- . Chairman 

Committee on Natural Resources 

Doug LaMalfa 

Chairman 

Subcommittee on Indian, 

Insular and Alaska Native Affairs 

Enclosure 

Bruce Westennan 

Chairman 

Subcommittee on 

Oversight and Investigations 

cc: Lieutenant General Todd Semonite, U.S. Army, U.S. Army Corps of Engineers 

19 Letter, supra note 2. 

Case:17-03283-LTS Doc#:4014-27 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 31 Page 5 of 5