Government spends more than the Board on Title III lawyers

On August 16, 2018, CPI reported that in the first 14 months of the Title III cases under PROMESA, the contractor side of Ricardo Rosselló Nevares’s Government billed almost $90 million — about $25 million more than the Oversight Board’s lawyers and consultants. Work duplication (fiscal plans, budgets, infrastructure, P3 and debt restructuring) already exceeded $220 million in a little more than a year; at least $150 million attributable to that double layer, per CPI. That happens while schools close and social workers are lacking at the Department of the Family, the report notes.

For PREPA, the Government mainly uses Filsinger Energy, Ankura, Greenberg Traurig and O’Melveny (operations, privatization, post-María reconstruction and Whitefish/Cobra review). The Board, in parallel, works with Citigroup, Proskauer Rose and McKinsey & Co. More than a dozen firms advise the same public corporation. O’Melveny’s John Rapisardi bills $1,147.50 an hour; his contract had already yielded more than $2.6 million. Ankura — with ex-Fortuño officials — billed more than $17 million in a little more than a year. The Board expressed concern over Filsinger’s scope and cost at PREPA, but in the same letter approved the contract.

In a year, Government contractors billed more than $2.2 million in travel/lodging, ~$220,000 in meals and ~$260,000 in photocopying/research; the Board’s, ~$260,000, ~$200,000 and ~$850,000 respectively. O’Melveny billed more than $175,000 in “nonworking travel time”; Board contractors, more than $320,000 in that line. Judge Laura Taylor Swain, examiner Brady Williamson and Rep. Rob Bishop had already flagged duplicative and reimbursable excesses. Board protocol: contracts over $10 million subject to review.

Approved billing or a multimillion contract is not adjudicated theft. Judicial or Board concern is not a judgment. This note does not impute a crime.