The administration of former President Donald Trump obstructed an investigation looking into why officials withheld about $20 billion in hurricane relief for Puerto Rico following the devastating aftermath of Hurricane Maria in 2017, one of the deadliest U.S. natural disasters in over 100 years, a new report says.
A Department of Housing and Urban Development Office of Inspector General report made public Thursday also found that tensions between the department and the Office of Management and Budget resulted in unprecedented procedural hurdles that produced delays in the disbursement of the congressionally approved funds.
It all started after 2018 when OMB began requiring HUD to send grant notices for disaster funds through an interagency review process for approval, making it hard for HUD to publish the notices needed to unlock funding in a timely manner. Investigators found that OMB had never before required such a review process for a notice allocating recovery funds.
Former HUD Deputy Secretary Brian Montgomery told investigators about a phone call he had with then-OMB Director Russell Vought in which Montgomery told Vought the actions from his office were equivalent to holding disaster-relief funds “hostage,” according to the report.
Investigators said they were unable to obtain testimonies from officials who ordered the interagency review process. Former HUD Secretary Ben Carson and another former HUD official also declined to be interviewed by investigators.
Access to HUD information was delayed or denied multiple times throughout the course of the investigation, the report said, and several former senior administration officials at the OMB refused to provide requested information about their decision-making process in regard to the Puerto Rico relief funds.
However, investigators were able to interview 20 current and former HUD officials and two Puerto Rico housing officials.
The Office of Inspector General said its oversight authorities do not allow for a review or official opinion of actions taken by Trump administration officials.
The Trump administration's OMB also insisted on overhauls to Puerto Rico’s property management records, suspension of its minimum wage on federal contracts and other prerequisites to access relief funds, according to the report. Some HUD officials worried such requirements were potentially beyond HUD’s authority to impose on grantees.
The Office of Inspector General began the review in March 2019 after Congress asked it to look into hurricane aid delays as the island sought to recover from a storm that resulted in the deaths of 2,975 people and triggered the world's second-longest blackout.
Seven months after the probe was launched, two top HUD officials admitted to knowingly missing the congressionally mandated deadline to issue a notice that would have unlocked billions in federal recovery funds to Puerto Rico. Carson later defended his agency's actions by echoing Trump talking points — citing concerns about corruption, fiscal irregularities and "Puerto Rico's capacity to manage these funds."
Throughout his term, Trump repeatedly opposed disaster funding for Puerto Rico while disputing and failing to acknowledge Maria's death toll. Trump had also told top White House officials "that he did not want a single dollar going to Puerto Rico," the Washington Post reported in 2019. "Instead, he wanted more of the money to go to Texas and Florida."
Under Trump, Congress had approved a total of $20 billion in HUD funds for Puerto Rico's post-hurricane reconstruction, a historic amount. But the agency stalled the release of the aid in 2019 and imposed additional restrictions and requirements last year on how Puerto Rico could gain access to the funds, citing corruption and financial mismanagement concerns.
Office of Inspector General audits published last year found that Puerto Rico needs to have a better system for requesting and monitoring federal grants to rebuild after Hurricane Maria — but Texas and Florida had similar issues and their funds were not held up after natural disasters.
The latest probe comes two days after President Joe Biden's administration removed Trump-era restrictions unique to Puerto Rico limiting its ability to access recovery funds through HUD. The agency also unlocked access to $8.2 billion in Community Development Block Grant Mitigation funds to help the island build resiliency against future disasters. The aid was approved by Congress in 2018.
Biden eliminated restrictions requiring incremental grant obligations, a federal financial monitor to supervise the aid and additional oversight from the island’s federally imposed financial oversight board, according new HUD Secretary Marcia Fudge.
The federal government has allocated nearly $69 billion to help the island recover from Maria as well as other disasters that have hit the island over the past few years. But most of the money, specifically funds for housing and infrastructure relief, hasn't made its way to communities on the island. Puerto Rico has received $19 billion, according to the Office of Recovery, Reconstruction and Resiliency.