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U.S. House panel probes corruption allegations at Puerto Rico utility

NEW YORK (Reuters) - The U.S. House Natural Resources Committee on Monday issued a letter seeking answers to allegations of corruption at Puerto Rico’s beleaguered electric utility, including reports that some officials accepted bribes to restore power to exotic dance clubs ahead of schedule.

The logo of the Puerto Rico Electric Power Authority (PREPA) is seen in Dorado, Puerto Rico January 22, 2018. REUTERS/Alvin Baez

The Puerto Rico Electric Power Authority (PREPA) has failed to restore power fully to the U.S. commonwealth’s 3.4 million residents since Hurricane Maria in late September knocked out power to the entire island, caused a complete collapse of the utility’s already decrepit electric infrastructure and killed dozens of people. As of early March, 12.5 percent of PREPA’s customers still did not have electricity, according to the U.S. Department of Energy.

The letter said that as part of the committee’s oversight of Puerto Rico’s recover, it was reviewing “multiple allegations of corruption and mismanagement” of PREPA’s power restoration efforts.

“Much of the reported corruption concerns PREPA officials accepting or demanding bribes to restore power to residences and businesses,” said the letter, which was addressed to PREPA’s interim executive director, Justo Gonzalez.

PREPA officials allegedly were paid $5,000 and provided free entry tickets worth $1,000 apiece to restore power to exotic dance clubs ahead of schedule.

In other instances, PREPA officials are accused of restoring power to their own homes before restoring power to “critical locations such as San Juan’s Rio Piedras Medical Center and the Luis Munoz Marin International Airport.”

The letter accuses PREPA of mismanaging a warehouse where materials were stored that should have been available to help restore power on the island. The mismanagement exacerbated an equipment shortage and contributed to idled work crews and delayed repairs.

The warehouse in question was not included in computerized inventory lists with PREPA failing to answer questions from the U.S. Army Corps of Engineers.

“PREPA’s explanations for Warehouse 5 and its inventory have been contradictory and, frankly, inadequate,” the letter said, referring to the utility’s original claim that the materials were from past infrastructure projects, included outdated surplus supplies and recycled parts.

After the Army Corps of Engineers distributed the materials, PREPA changed its story, the letter alleges, to one indicating that the materials were intended for present, not past, projects.

The letter asks PREPA to preserve all records, documents, data and communications regarding all open PREPA investigations into “allegations of corruption, favoritism, or abuse of authority by PREPA employees, officials, or contractors.”

It also seeks information surrounding the warehouse in question. All materials are to be submitted to the committee by 5 p.m on March 26.

The letter was signed by the committee chairman, Representative Rob Bishop, Bruce Westerman, chairman of the Subcommittee on Oversight and Investigations, and Doug LaMalfa, chairman of the Subcommittee on Indian, Insular and Alaska Native Affairs.

Reporting by Daniel Bases; Editing by Leslie Adler