Home Local News Special Communities probe heats up in House
Issued : Friday, February 10, 2012 08:25 PM
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Special Communities probe heats up in House

By CB Online Staff

House Speaker Jenniffer González is warning that more referrals may be coming as the lower chamber continues to probe the handling of the $1 billion Special Communities program.

González is questioning the legality of millions of dollars in spending under the program, and is pointing the finger squarely at former Gov. Sila Calderón, who oversaw the launch of the Special Communities Trust in 2002.

Calderón started touting the Special Community model in her successful run for San Juan mayor in 1996 and carried it over to campaign for governor, the House speaker said.

“In the process, she illegally spent millions in public funds to try to project the image that she was compassionate on poverty,” González said. “However, it turns out this was just a publicity effort to illegally create the Special Communities Trust, through which funds were illegally assigned.”

Last year, the island Justice Department announced it was seeking a range of documents from various local government agencies as part of a broad probe into the draining of the $1 billion Special Communities Trust fund. The agency was acting on a request lodged by González seeking an in-depth audit of the depleted fund.

Last week, the Justice Department recommended the appointment of a special independent prosecutor to probe former Special Communities Director Linda Colón and Humacao Mayor Marcelo Trujillo over alleged irregularities in the spending of public funds. The referral targets the inclusion in the program of the Verde Mar neighborhood in the southeast coastal town. Both have denied any wrongdoing.

The House, meanwhile, is still conducting a legislative probe of the overall program.

“As the days go by we find evidence of the irregularities that surrounded this corruption scheme disguised as a just cause,” González said Friday. “This is has been the most expensive government slogan ever.”

Calderón has staunchly defended the Special Communities Trust, a $1 billion pet project launched during her administration (2001-2004).

The trust originally was funded with a $500 million direct contribution from the Government Development Bank (GDB) and a $500 million loan to be repaid in 10 years with money from government bond emissions, most of which is still owed. It was intended as a perpetual trust to be fed with interest.

The New Progressive Party administration of Gov. Luis Fortuño says the trust, which grew to cover projects in more than 700 low-income communities around the island, is broke.

Calderón, a one-term governor from the Popular Democratic Party, has countered that the Fortuño administration has “started a war against this program.”

González says the legislative probe shows that the Calderón administration acted with “crass negligence” in setting up the trust and claims that disbursements from it may have been illegal.

The House speaker said the trust was launched in 2002, but not registered until 2004.

“That lag in registration could nullify all of the transactions realized by the trust from 2002 to 2004,” González said. “How is it possible that something so important was missed in a program that was so thoroughly studied, funded and sold through the media?”

She said anyone tied to any irregularities would be referred to the Justice Department.

CARIBBEAN BUSINESS has been sounding the alarm on the emptying of the trust fund for years.

“Some seven years and $842 million later, the perpetual part of the trust fund is no longer a reality and numerous projects that were supposed to be built with the trust’s money haven’t been completed or even started,” CARIBBEAN BUSINESS reported in an April 2009 cover story. “The remaining $248 million has already been earmarked for projects that may never be undertaken.”

In addition, cash-strapped government agencies face the prospect of spending hundreds of thousands of dollars more to determine where the money went, the report noted.

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