On June 25, I sent a letter to the inspectors general of DHS, HUD, and DOE warning that several mayors in the Commonwealth of Puerto Rico are diverting federal reconstruction dollars away from critical infrastructure projects through illegal construction excise taxes.
Now, 12 of these mayors are on a last-minute, desperate lobbying trip to Washington to try and rescue their illegal cash grab from American taxpayers.
As background, these mayors are currently taxing the federal government anywhere from five to ten percent of a federal project’s total cost, diminishing the value of recovery funds, raising the cost of reconstruction, and worst of all, defrauding federal taxpayers.
Take the U.S. Army Corps of Engineers’ Río Puerto Nuevo Flood Risk Management Project in San Juan as an example. The Corps recently awarded a $1 billion contract to widen a vital channel and strengthen flood protection for the capital city. But under Puerto Rico’s illegal municipal tax and steal scheme, 10 percent of the project will be diverted from flood protection and into local government coffers.
Every dollar taken by San Juan on this project is one less dollar that can go toward saving lives during a flood. And the same rule applies to every federal project on the island.
The bipartisan Financial Oversight and Management Board for Puerto Rico (FOMB) has repeatedly warned this tax is an impediment to Puerto Rico’s recovery and violates PROMESA and is against the Fiscal Plan. Yet, the FOMB has waffled on taking the Commonwealth or these Mayors to Federal Court. Why? This is common sense.
We at Frontiers of Freedom agree with these responsible federal authorities. Taxpayer funded recovery dollars are meant to rebuild Puerto Rico, not bankroll their local coffers.
We encourage the Trump administration to address these concerns with the mayors and to defend mainland taxpayers against waste, fraud, and abuse.