Former HUD Deputy Secretary Works at Firm Commissioned for Puerto Rico’s Recovery Efforts

By:
Feb 18, 2020
10:43 AM
Originally published at Centro de Periodismo Investigativo

By Vanessa Colón Almenas and Brenda León

Versión en español aquí.

SAN JUAN, Puerto Rico — When Pamela H. Patenaude announced her departure as undersecretary of the U.S. Department of Housing and Urban Development (HUD) on December 17, 2018, former Secretary of Puerto Rico’s Housing Department, Fernando Gil-Enseñat, and several local officials publicly lamented it.

Patenaude, who was second in command after Secretary Ben Carson, was an important ally of the island after Hurricanes Irma and María in September 2017. Under her tenure, the funding allocation increased from $11 billion to $20 billion through the Community Development Block Grant Disaster Recovery Program (CDBG-DR).

According to The Washington Post, the former federal official advocated for Puerto Rico in accessing the first $1.5 billion allocation of these funds, whose availability was announced in December 2018.

Three months after leaving HUD, in March 2019, Patenaude was named Senior Community Liaison at Innovative Emergency Management (IEM), a company that signed a $22.2 million contract with Puerto Rico’s Housing Department on July 15, 2019, using funds from the first CDBG-DR allocation.

“I look forward to serving in this important advisory capacity role and to help facilitate long-term recovery efforts across the nation (the United States), including communities still recovering from recent disasters in Puerto Rico, North Carolina, and Texas,” Patenaude said in a press release published in IEM’s webpage, referring to Puerto Rico issues.

IEM: Petenaude Not Associated With Puerto Rico

The Center for Investigative Journalism (CPI, in Spanish) asked IEM about a possible conflict of interest and how that appointment had been handled.

Stephanie Tennyson, Chief Communications Director at IEM, told the CPI that, other than what the former official had announced, Patenaude is not involved in day-to-day work or contract management in Puerto Rico and elsewhere.

“She was also not part of the contract procurement effort nor was she associated with any disbursement of Puerto Rico recovery funds,” she added.

The press release on IEM’s website says Patenaude will work as senior advisor in housing policy and disaster recovery. Tennyson, meanwhile, acknowledged that the former federal official is an IEM consultant and advises the firm’s senior executives on best practices, but did not provide further details.

Tennyson emphasized that “Patenaude consulted —and will continue to consult— with both private counsel and HUD ethics counsel to ensure that she goes above and beyond what is required by law, regulation, and Executive Order,” related to the restrictions that apply to her after she ended her role as undersecretary of HUD.

Patenaude will work with client stakeholders, elected representatives, state agency officials, and disaster survivors to seek housing solutions, according to the IEM website.

The U.S. Office of Government Ethics generally bans former high-level employees from having contact with employees of their former job on behalf of another person or entity, in relation to any official matter. It could, likewise, prohibit them from having contact with certain officers of other agencies.

Tennyson added that IEM “ensures compliance with all applicable ethics rules for hiring and contracting, to include Mrs. Patenaude’s employment.”

IEM noted that Patenaude has more than 37 years of experience in public service and management of nonprofit organizations. In the United States, she is recognized as an expert in the field of housing and disaster recovery.

Gil-Enseñat Says He Didn’t Know

In Puerto Rico, CDBG-DR funds —which are earmarked to assist in the event of a disaster, long-term recovery, in the areas of housing, infrastructure restoration and economic revitalization— are managed by Housing. Gil-Enseñat was the Secretary of Housing and key spokesman in the management of these funds until January 19.

Gil-Enseñat assured the CPI that he was not aware that Patenaude now works with IEM. The former official acknowledged that he maintained a friendly relationship with her.

“I have talked to her, but her contact with me hasn’t been work-related. It’s more personal,” Gil-Enseñat told the CPI at the end of last November.

Patenaude had not responded to request for comments at the time of publication.

When the former HUD deputy secretary announced her resignation, Gil-Enseñat praised her “as a friend, mother, wife and public servant” in a tweet. He said that Puerto Ricans will always “be in her debt” for her sincere effort to help rebuild the island.

“If it’s a contract she has with a private entity, she must obviously know her ethical laws,” Gil-Enseñat told the CPI.

IEM and three other companies won the Housing Department’s bid for a three-year contract to oversee “Housing Advisory” and “Repair, Reconstruction or Relocation” (R3) programs, in addition to supporting the agency in administration and execution efforts. The R3 program will repair homes that were significantly affected by hurricanes. The maximum amount in repairs for each house is $60,000. Up to a maximum of $185,000 will be awarded for reconstruction or relocation, depending on the size of the home.

In November 2018, IEM submitted its proposal through which it obtained the contract to work in the Mayagüez region.

The other companies benefiting from this contract are Alliance for the Recovery of Puerto Rico ($22.6 million), ICF Incorporated, LLC ($25 million) and Aecom Technical Services ($22.2 million).

HUD’s Response

When HUD was asked if Patenaude obtained an ethical waiver given the circumstances, Public Affairs Officer, Jereon M. Brown, said in written statements that “all HUD employees are briefed on and subject to the Office of Government Ethics Post Employment Rules.” He evaded answering if the former official received the approval to be hired by IEM.

A former federal employee may be prohibited from “accepting compensation from a contractor if the former employee held a position in Government or made a government decision involving more than $10 million released to that contractor.”

Brown said HUD does not participate in the selection and award of contracts of its grantees. In this case, the grantee is the Government of Puerto Rico, that in turn has delegated the task of administering CDBG-DR funds to Housing, which contracted the services of IEM that had already hired Patenaude.

HUD reviews Housing’s procurement policies to determine if they are “proficient”, Brown said. Housing is the agency responsible for selecting and overseeing the contracts in which CDBG-DR funds are used. In addition, it must maintain a public website listing all contracts and procurements for which these funds are used.

Patenaude’s last financial report submitted to Government Ethics complied with the applicable regulations and laws, as determined by three officers in February 2019.

Her resignation was effective January 17, 2019.

A “Champion” for Puerto Rico

According to Resident Commissioner in Washington, Jenniffer González, Patenaude helped “break down administrative barriers” so that Puerto Rico could receive the first CDBG-DR funds. In several instances, González described her as the most important “champion” Puerto Rico had in HUD.

During her third visit to the island in February 2018, after Hurricanes Irma and María, Patenaude announced access to the first CDBG-DR funds at a press conference in La Fortaleza, along with former Governor Ricardo Rosselló and the Resident Commissioner.

Two months later, she visited the San Isidro neighborhood in Canóvanas. Surrounded by houses covered with blue tarps, and a bigger crew of officials, she announced a record $18.5 billion in recovery funds.

Then, on the first anniversary of Hurricane María, Secretary Carson and Rosselló signed the final grant agreement to access those funds. Patenaude was present at the signing, along with the Resident Commissioner and Gil-Enseñat.

González and Gil-Enseñat have said Patenaude visited the island more than 10 times. According to public information compiled by the CPI, it was at least seven times. She met with HUD employees in Puerto Rico, as well as mayors, nonprofit organizations, Banco Popular staff and, repeatedly, with housing industry representatives. She took photos at the Humacao pier and in a grocery store in Santurce with a plate of “alcapurrias,” the well-known fried Puerto Rican dish.

She was a speaker at the Mortgage Bankers Association and the Puerto Rico Builders Association conventions, and at an activity of the National Association of Hispanic Real Estate Professionals.

“I want to be remembered as being an advocate for Puerto Rico, as the person who fought for it,” she said in a conference she gave at Princeton University, in New Jersey, after her departure from HUD.

Slow Disbursement of CDBG-DR Money

More than two years have passed since Hurricane María made landfall on the island and more than 20,000 families still live under the shade of a blue tarp on their homes. The panorama has worsened after the tremors that have been rattling the Island since December 28, 2019.

February 1, 2020 marked two years since the $1.5 billion in CDBG-DR funds were announced for the first time. Just $11 million have been spent, according to HUD data as of December 2019, which represents almost 1%.

The “Repair, Reconstruction or Relocation” program was assigned $826 million, of which $6 million (7%) are under the “program fund drawn” line item, that is, they have already been transferred from the U.S. Treasury Department to the Government of Puerto Rico’s bank accounts.