Washington aims for greater exploitation of devastated Puerto Rico

November 18, 2017
Damaged electrical installations in Puerto Rico after the island was hit by Hurricane Maria in September.

The humanitarian crisis in Puerto Rico continues after almost two months after the hurricanes hit. The imperialist center in Washington continues to refuse to provide anything like adequate aid to its Caribbean colony.

The destruction caused by the two hurricanes that hit the island in September was worsened by a long history of imperialist exploitation, which has devastated the economy and infrastructure. This has greatly deepened over the past decade.

Mayor of Puerto Rico’s capital of San Juan, Carmen Yulin Cruz, told Democracy Now! on October 31: “The majority of the island is still without any power. Only about 40-60% of the population has water. That doesn’t mean it is good water. We still have to boil it or put chlorine in it to be able to drink it.

“Medical services are really, really bad because of the lack of electricity. The supplies in the supermarkets are not there yet, so people are having a lot of trouble getting the supplies that they need.”

Medical crisis

There are reports of many deaths due to the medical situation. Older people are also dying from the lack of air conditioning due to the absence of electricity.

On November 14, the New York Times reported: “There are warning signs of a full-fledged mental heath crisis on the island, public health officials say, with much of the population showing symptoms of post-traumatic stress disorder…

“And people who had mental health illnesses before the storm, and who have been cut off from therapy and medication, have seen their conditions deteriorate…

“Returning to a routine is the most important step toward overcoming trauma … But for most Puerto Ricans, logistical barriers like scarce water and electricity, as well as closed schools and businesses, make that impossible.”

The death total due to the hurricanes and their aftermath is unknown. Cruz cites the high numbers of cremations with no explanations coming from the pro-imperialist government. We may never know the death toll.

There is lack of clarity and information in general concerning the situation throughout the island.

Washington’s aims

Some put Washington’s lack of adequate aid down to Trump’s incompetence. In reality, Washington’s actions are deliberate and calculated. This raises the question: What exactly are its aims for Puerto Rico’s future?

It is useful to look at the situation concerning the huge US$75 billion in debt Puerto Rico owes to US financial vulture capitalists. One particular case is the island’s electric power company, which is insolvent.

Last year, the Puerto Rican government’s said it could not repay this debt. In response, the Obama administration set up a US-appointed financial board to oversee the colony’s finances.

A key objective for this board is finding ways to squeeze as much money out of Puerto Rico’s people as possible to pay the vultures.

Cruz said at the time: “They have unveiled to everyone, the international community and everyone in Puerto Rico that we are a colony of the United States…

“This colonial control board will lower the minimum wage for people 25 or under to $4.50 an hour. It could sell our natural resources.”

The means the board uses to do this have included privatising pubic companies and services, and using the proceeds to pay the vultures. One major public utility on the chopping block is the Puerto Rico Electric Power Authority (PREPA), the island’s power utility.

How the PREPA management operates was exemplified two years ago, when they brought in a firm that was supposed to restructure PREPA’s debt. This firm was unable to secure a deal with bondholders, but PREPA paid the firm $46 million anyway last February for 18 months’ “work”.

After the hurricanes hit, PREPA’s management signed a secret contract with a tiny company in the state of Montana called Whitefish Energy Holdings for $300 million to work on restoring the electrical system. This company is comprised of two people, whose “job” is hiring subcontractors to do the work, with Whitefish’s two owners skimming the profits.

Whitefish Energy is in a small rural town of the same name, which just happens to be the hometown of Ryan Zinke, Trump’s interior secretary. Zinke swears on a stack of bibles that he had absolutely nothing to do with securing this contract for his hometown buddies.

The whole procedure was unprecedented. After a catastrophic power outage, utilitiy companies usually call the American Public Power Association, which organises a network of state and regional power utilities to restore electricity quickly.

This is what happened in Texas after Hurricane Harvey and in Florida after Hurricane Irma. The day after Irma’s departure, Florida Power and Light said it had organised more than 20,000 workers from 30 states and Canada to restore power.

Whitefish scam

PREPA, instead, hired Whitefish. PREPA’s contract with Whitefish became public in October, and the terms created a storm of protest.

It turns out that Whitefish hired two companies to do the work, who claimed to have only about 300 workers in Puerto Rico weeks after the hurricanes. Under the contract, the Washington Post reported, PREPA pays Whitefish’s $462 per hour for a supervisor and $319.04 for a lineman, about 17 times what Puerto Rican linemen earn.

Democracy Now’s Juan Gonzalez, who is Puerto Rican, said this the work could have been done by Puerto Rican workers, who already work for PREPA, and other workers from the United States for much less.

The subcontractors pay the linemen from $60 to $100 an hour. Whitefish also charges PREPA nightly accommodation fees of $332 per worker and $80 per day for food.

The contract also states: “In no event shall PREPA, the commonwealth of Puerto Rico, FEMA [Federal Emergency Management Agency] administrator or any other authorized representatives have the right to audit or review the cost and profit elements of the labor rates specified herein.”

Cruz said: “It’s truly unnerving that people can just swindle, swindle an entire population when they are at their most vulnerable.”

Under enormous pressure, Puerto Rico’s governor, Ricardo Rosello finally instructed PREPA to cancel the contract, but it still runs to November 30. Rosello appointed Ricardo Ramos, the official who signed the Whitefish contract, to head PREPA earlier this year.

After the scandal broke, the governor has asked the US government for about $95 billion to help rebuild in a bid to save face. Do not hold your breath waiting for Washington to comply.

There is another contract that PREPA has signed for $200 million with a company called Cobra, about which not much has been made public.

Gonzalex said PREPA “is bankrupt, but that doesn’t mean that there’s still not cash coming in [before the storm] from the rates that utility users are paying. The question is: where does the money go?”

The truth is, the PREPA management is deliberately driving the company into the ground. This is why it took the route of hiring Whitefish at these rates.

The purpose is to force the utility’s privatization, which is the goal of Puerto Rican comprador capitalists and its pro-imperialist politicians, as well as Washington. The city government of San Juan, which was elected with trade union support, is an exception.

Exploiting disaster

The Fluor water company is next up on the privatisation list of Washington and its local lackeys, as is education. Washington’s goal, furthered by its deliberate standing aside while it watches Puerto Rico’s suffering, is to privatise as much as possible of the economy.

But this is not its only goal. What appears to be happening is something like what occurred in New Orleans after 2005’s Hurricane Katrina, when the catastrophe was used to drive out the poorest Blacks. At the time, one racist politician gloated: “Katrina did what we couldn’t do.”

In Katrina’s aftermath, education was almost completely privatised and the city was gentrified.

It looks like the “shock” of these hurricanes (to use anti-capitalist writer Naomi Klein’s term) that hit Puerto Rico is being used to drive more poor Puerto Ricans to flee to the United States. This plus privatisation could also lead to gentrification of the island to further accommodate the wealthy.

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