Articles

Authors:
Vanessa Meléndez Figueroa, Hannelore Y. Valentín Fortunet - EFS Puerto Rico

Summary: The content of this article is based on the work carried out by the auditors of the Supreme Audit Institution of Puerto Rico during an audit of the Superintendence of the Capitol of Puerto Rico, and its role in detecting a fraud scheme that resulted in the guilty plea of five former public officials and two private citizens.

Keywords: SAI, compliance audit, Superintendence of the Capitol of Puerto Rico, fraud, corruption.

The Office of the Comptroller of the Commonwealth of Puerto Rico (Office of the Comptroller) carried out a compliance audit of the fiscal operations of the Superintendence of the Capitol, attached to the Legislative Assembly of Puerto Rico (Superintendence). The audit covered the period from July 1, 2007 to October 31, 2015 and the results were published in six audit reports. The audit reports, DA-15-46 and DA-17-12 correspond to the examination we carried out of the fiscal operations related to the purchases, the accounts payable, and the disbursements in the Superintendence for the development of works, restoration, and reconstruction of legislative offices of the House of Representatives and the surroundings of the State Capitol, and the leasing of the Capitol cafeteria. Both reports were the subject of an adverse opinion and contain thirteen findings and two special comments.

Some of the situations subject to observations in these audit reports were:

• Purchase orders for which written quotations that turned out to be false were considered.
• Splitting of works to circumvent the requirement of holding public bids.
• Payments for construction works not completed and disbursement of duplicate and triplicate payments for the same work.
• Falsification of signatures on documents related to the purchases.
• Economic benefits received by 19 employees and officials of the Superintendence from a contractor for processing illegal invoices, false signatures, and altered documents to benefit him.
• Improper use of the Superintendence's computers and information systems by two employees to benefit a contractor and to carry out administrative work for a private corporation.

This audit, carried out by a working team from the Division of Audits of Departments and Agencies, uncovered a fraud scheme that had a cost to the treasury of USD 2.9 million in public funds. In addition, our Division of Data Analysis, Digital Forensics, and Technological Development (AFD) examined files and emails located on the Superintendence's server and on 7 computers assigned to officials and employees of the entity. Also a forensic document examiner (Examiner) from the Institute of Forensic Sciences of Puerto Rico (ICFPR) analyzed handwriting samples on various documents.

The Office of the Comptroller's referral to the Department of Justice, with the documentary and testimonial evidence gathered by the auditors during the audit of the Superintendence, was the basis for the filing of 73 charges made by the Department of Justice in 2014, against five former employees of the Superintendence and two private persons, who were a married couple of contractors. The fraud consisted of the falsification of quotations from alleged competitors, to give the impression that there had been competition and to award the service orders in favor of a married couple of contractors; the double and triple billing for the same work; and the certification of works not performed. The scheme accumulated 141 transactions in which documents were falsified and public funds were illegally misappropriated through the presentation of false quotations for construction works, actions that deprived the State of fair competition among bidders to award purchase orders for services at the lowest possible cost. The charges filed against the former employees of the Superintendence are illegal misappropriation of public funds, omission in the performance of duty, illicit profiteering, illicit enrichment, and perjury; while the married couple of contractors faced charges for falsification of documents, possession and transfer of false documents, illegal misappropriation of public and private funds, and fraud.

In August 2017 two of the former employees pleaded guilty to 20 charges. The trial against the remaining defendants extended over three years, with interruptions both by Hurricane María and the COVID-19 pandemic, with appeals from the defense and many difficulties on the part of the five defense attorneys in agreeing on the calendar. The prosecutors who had the responsibility of presenting the evidence of the alleged public corruption committed in the Capitol -approximately ten years ago- presented, in total, 35 witnesses and 214 pieces of evidence on the facts in controversy.

This past June 25, 2021 the Hon. Wanda Cruz Ayala, superior judge of the Court of First Instance of San Juan, found a group of three former officials and two contractors accused of fraud of USD 2.9 million in construction works of the Superintendence of the Capitol during the 2009 to 2012 term, guilty of a total of 39 charges.

The fight against corruption is an arduous and perennial task. In the oversight work of the SAIs, an effort must be made to transmit a message of intolerance toward any act of corruption and that, if public officials and employees commit such acts, they must be held accountable for their actions and that there will be no room for impunity. One more rung to combat and eradicate corruption in Puerto Rico and throughout the world.