The Comptroller of Puerto Rico reveals that the then executive director of the Maritime Transportation Authority (ATM) and the representatives of three companies interfered with free competition in construction projects at the piers of Ceiba and Vieques. The ATM did not publish an official request for proposals or the details of the project, a guarantee of a competitive process.
Before the issuance by the ATM Board of Directors of the state-of-emergency decree on June 15, 2018, the then executive director of the ATM sent information from his email to Company A about the scope of the works and photos of the Fajardo terminal and the Roosevelt Roads area. Companies A and B submitted their proposals and company A submitted the proposal of company D (see exhibits 1 and 2 of the Report).
This situation had the effect that company A obtained the intended benefit, the contract, and a disbursement of $2,596,791. The auditors identified that company C, and the representative of company B, worked as subcontractors of company A. The then executive director of the ATM, construction companies A, B and C, and their representatives, could be liable in their personal capacity for violations of Act 77 on the prohibition of monopolistic practices of 1964.
The Report notes multiple irregularities and improper payments with the project's disbursements. An engineer and expert witness contracted by the Office of the Comptroller determined that the ATM improperly paid $320,100 to Company A and disbursed $157,000 above the market cost at the piers of Ceiba and Vieques. According to the Expert Report, Company A included false information about the services rendered since they were not performed in accordance with the contract. The expert could not determine the reasonableness of the costs of the works since the contract and the invoices lacked descriptive details of the project.
On the other hand, the ATM disbursed $605,450 for construction works in the parking lot of the Ceiba pier, and the rehabilitation of the Vieques Pier. These projects have not been of use since the U.S. Environmental Protection Agency (EPA) ordered the stabilization of the land in the parking lots in Ceiba, and in the Vieques pier only the ramp is used for the docking of the barge (see exhibits 3 and 4 of the Report).
The works at the piers of Ceiba and Vieques began before obtaining the construction permit; the facilities of the Ceiba pier began to be used before obtaining the use permit and the Vieques pier does not have a use permit. In addition, the electricity generators of the ATM offices, the ticket office and the passenger waiting terminal are authorized to operate 500 hours annually; however they operate 24 hours a day, equivalent to 8,760 hours annually. These situations were referred to the EPA on October 20, 2022.
The Report also shows that the ATM improperly paid $47,750 to company A for work not performed to stabilize the soil of the Ceiba pier and to request permits related to the Clean Water Act. In addition, the ATM improperly paid $447,909 to the Roosevelt Roads Redevelopment Authority and three other companies for the stabilization of the land and to comply with the EPA administrative order. However, this payment should have been assumed by company A, since they caused the excavations, drillings and constructions knowing the limitations of the soil and the measures imposed by the EPA.
The Office of the Comptroller referred to the Chief Justice of the Supreme Court a sworn complaint, on December 15, 2023, regarding the ethical conduct of an ATM attorney. This attorney may have incurred violations of the Code of Professional Ethics of the Supreme Court by using a false expression contained in the Stipulation submitted in the judicial proceeding and during the administrative processes of the case related to a recommendation of the Comptroller's Special Report CP-22-07. This report had recommended that the ATM collect $324,630 from a contractor for the dispatch of fuel without having executed a contract and without the authorization of the Office of Management and Budget.
From the Settlement Agreement and in the legal opinion of the attorney, evaluated by the ATM Board of Directors, it emerges that the attorney told the contractor's representatives that it was not the ATM's intention to file a money-collection claim. In this regard he stated that the lawsuit had only been filed due to the OCPR's requirements. In addition, he recommended that the Board accept the offer presented by the contractor.
The investigation covers the period from January 1, 2017 to April 9, 2019.
Special Report OC-24-28 can be obtained on our website: www.ocpr.gov.pr.
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