U.S. charges FEMA official, contractor in Puerto Rico corruption case (updated)

Mammoth Energy Services

10/09/2019 21:18

(Adds comments from U.S. attorney, Ellison's lawyer,
background, previous dateline WASHINGTON)
    SAN JUAN, Sept 10 (Reuters) - The U.S. Justice Department on
Tuesday announced corruption charges against a senior government
official and a contractor who worked to rebuild Puerto Rico's
electrical grid after Hurricane Maria devastated the island in
2017.
    In a 15-count indictment, U.S. prosecutors allege that Ahsha
Tribble, who oversaw the Federal Emergency Management Agency's
efforts to restore electrical power after the hurricane,
accepted helicopter rides, hotel rooms and other bribes from
Donald Ellison, who was then president of Cobra Acquisitions
LLC, which was contracted to do the work.
    In return, Tribble pressured FEMA and the Puerto Rico
Electric Power Authority (PREPA) to steer work to Ellison's
firm, prosecutors said. Cobra was awarded two contracts worth
$1.8 billion, according to federal prosecutors in Puerto Rico.
    Prosecutors also charged Jovanda Patterson, a former FEMA
deputy chief of staff who they say evaluated Cobra's work even
as she was trying to get a job with the company. All three
defendants have been arrested, officials said.
    "Defendants arrived in Puerto Rico to allegedly help in the
recovery of the devastation left from Hurricane Maria," U.S.
Attorney Rosa Emilia Rodríguez-Vélez said at a press conference.
"However, they decided to take advantage of the precarious
conditions of our power grid and became involved in a bribery
and electronic fraud scheme to illegally enrich themselves with
our suffering."
    Ellison, who left Cobra in June, denies wrongdoing and will
plead not guilty, his attorney William Leone said in a telephone
interview. "This indictment is filled with allegations of
innocuous events that somehow the government has cobbled into a
theory of bribery," he said. "It's not a crime to be friends
with people you work with."
    Tribble and Patterson were not immediately reachable for
comment.
    U.S. officials have put tighter spending controls on federal
money earmarked for Puerto Rico's recovery efforts, which have
been slow.  urn:newsml:reuters.com:*:nFWN24Q1MW
    The indictment follows a recent tweet by President Donald
Trump calling Puerto Rico "one of the most corrupt places on
earth," while his White House accused the island of misusing
federal money.  urn:newsml:reuters.com:*:nL2N25O061
    Nearly $42.7 billion of federal funds have been allocated to
Puerto Rico, which has received $13.8 billion so far.
    FEMA and Cobra's parent company, Mammoth Energy Services
Inc, both said they were cooperating with the investigation.
    Charges filed against Tribble and Ellison include conspiracy
to commit bribery, honest-services wire fraud and disaster
fraud.
    Prosecutors said they seized $4.7 million from accounts held
by Ellison, as well as a sailboat, a truck and construction
equipment. Ellison has sued to try to get that property back. 
    After the hurricane, PREPA, which filed for bankruptcy in
2017, was faced with a decimated electric grid already
struggling due to poor rate collection, heavy management
turnover and lack of maintenance.  urn:newsml:reuters.com:*:nL2N26019V
    Trump has had disputes with Puerto Rico's leaders after
coming under heavy criticism for a tepid response to the
hurricane, which resulted in almost 3,000 deaths.


 (Reporting by Luis Valentin Ortiz in San Juan and Andy Sullivan
in Washington. Additional reporting by Karen Pierog and Brendan
O'Brien in Chicago; Editing by Bernadette Baum and Richard
Chang)
 ((andy.sullivan@thomsonreuters.com; +1 202 354 5864; Reuters
Messaging: andy.sullivan.thomsonreuters.com@reuters.net))