08:54 GMT +319 December 2018
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    In this May 4, 2012 photo, the flags of Puerto Rico and the U.S. wave behind an English one-way traffic sign in Guaynabo, Puerto Rico, one of only a few places in Puerto Rico with street signs in English

    ‘Giant Scam': US Mainland Contractors Caught Profiteering in Puerto Rico

    © AP Photo / Ricardo Arduengo
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    The move by US Federal Emergency Management Agency (FEMA) contractors to charge steep markups for repairs in Puerto Rico is "basically a giant scam," Adriana Garriga-Lopez, department chair and associate professor of anthropology at Michigan's Kalamazoo College, told Sputnik.

    Garriga Lopez was reflecting on an article published by the New York Times on Monday. In the report, writer Frances Robles details various residents of the island who are receiving repair work through the $1.2 billion FEMA-financed program Tu Hogar Renace, which translates to Your Home Reborn.

    "I looked around and said, ‘Wait a minute, that treatment costs $100, and I can buy those cabinets for $500. I know, I worked construction,'" Juan Rodríguez, who received a $5,000 voucher for repairs, told the Times. "Let's say they did $2,000 worth of work, because prices are high now, and you have to pay for labor. But $5,000?"

    In reviewing hundreds of contracts and invoices tied to the FEMA program, the Times discovered that more than 60 percent of allocated funds are actually going toward "overhead, profit and steep markups."

    ​"There's been significant overhead costs that have been added on to repair costs, and there's a variety of factors going into that, but I think the one big one is that we see the majority of the contracts being given to stateside companies," Garriga-Lopez told Radio Sputnik's Loud & Clear on Friday.

    "That means they have to transport not only the people who are going to do the labor… but also supplies, equipement and in some cases even trucks and cars that they will need to carry out those repairs."

    "We have this extremely expensive approach that favors US-based companies… but at the same time, those companies in the US themselves don't really have the capacity or the capability to carry out those repairs," she explained, noting that those companies are then forced to subcontract smaller firms to pick up the load and bear the high costs of labor.

    But the focus shouldn't only be about the price tags, Garriga-Lopez told hosts Brian Becker and John Kiriakou. "The majority of the issue is the ongoing preferencing of US mainland companies by FEMA, which has resulted over and over and over since Hurricane Maria and Hurricane Irma… in inefficient, highly problematic, highly suspect contracts," she stressed.

    "The people that are suffering the effects… are the people in Puerto Rico who are still living under blue FEMA tarps."

    At the end of the day, Garriga-Lopez predicts that Puerto Rico will be stuck in a "vulture economy," where corruption is evident as long as the FEMA-funded program is available.

    Tags:
    Federal Emergency Management Agency (FEMA), Puerto Rico
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