Puerto Rico’s Next Big Crisis Is Water Quality, Water Shortages



Puerto Rico’s Next Big Crisis Is Water

Lax regulation, austerity and climate change are setting the stage for another catastrophe.

SALINAS, Puerto Rico ― It was a late August afternoon when the rain finally came, first as a drizzle that beaded on the plaza’s magnolia trees, then a downpour, darkening the dusty bricks and forming murky rivulets along the curbside.

Manases Vega was relieved by the prospect of daily showers and the ability to flush his toilet again.

This municipality of roughly 31,000 had been water rationing since June. Again. The first time came in 2015, following a prolonged drought. This summer, another parching dry spell drained the aquifer beneath this seaside enclave on Puerto Rico’s southeast coast to dangerously low levels.

Yet the industries whose pollution Vega, 65, blames for triggering the mysterious respiratory illness that causes him to visit the emergency room to have his chest drained three days a week, kept sucking up water with an unquenchable thirst. Vega, meanwhile, lost water access every Tuesday and Thursday.

“They give the water to those big companies and we have no water,” Vega said, wheezing slightly. “It makes you very angry.”

Manases Vega, 65, a retired high school art teacher, poses for a portrait in Salinas.

Manases Vega, 65, a retired high school art teacher, poses for a portrait in Salinas.

This is a disaster that predates the 2017 hurricanes that exposed both the island’s deteriorating living standards and the lethal fragility of its water systems. For decades, this farming region turned industrial hub has tapped the aquifer that stretches more than 50 miles along the southern coast here. But stresses on the once-mighty South Coast basin are mounting. Real estate developers are paving over land that once absorbed rain and recharged the groundwater below. Pollution is contaminating the dwindling supply of freshwater. Agribusiness giants operate with near impunity as austerity renders overextended regulators ineffective.

All the while the planet is getting hotter, propelling Puerto Rico toward more catastrophic droughts and rising seas that gush saltwater into coastal aquifers.

“Where there is rain deficit, there is saline intrusion, especially in a coastal aquifer,” said José M. Rodríguez, a retired U.S. Geological Survey hydrologist who studied the aquifer for 31 years. “The problem of climate change will worsen the situation.”

Lax regulation, decaying public infrastructure and an ongoing debt crisis have left the troubled U.S. possession incapable of reliably delivering water to all its 3.2 million residents. Less than half the water the public utility treats makes it to ratepayers, and nearly all of that which does is of dubious quality, compelling only the most desperate Puerto Ricans to drink what flows from the tap. The most obvious solution is a total overhaul. But the colonial government, hounded by Wall Street creditors and in a state of chaotic quasi-bankruptcy, can barely keep the lights on, stoking fears that profiteers looking to buy up the indebted public power company may target water services next.

“This is an extremely serious issue,” Judith Enck, Puerto Rico’s former regional administrator at the Environmental Protection Agency for eight years under President Barack Obama. “Drinking water quality and drinking water quantity are at risk throughout the island.”

Thirst For Profits

The South Coast aquifer, stretching more than 50 miles from Ponce in the west to Patillas in the east, has been something of a quandary for as long as anyone can remember. Fed by streams that ran southward from the misty limestone mountain range that covers most of the island’s interior, the basin forms a fan delta. Alluvial soil, sediment rich with nutrients, accumulated atop the south-sloping bedrock, creating fertile farmland.

Puerto Rico’s South Coast was always drier than other parts of the island, with semi-arid conditions and roughly half the rainfall of its humid zones. But Puerto Rico’s landholders were committed to farming here. As the region became a hub of the island’s sugarcane industry, plantation workers started diverting mountain streams to irrigate fields as far back as the early 1800s. The systems grew more complex as demand for Puerto Rico’s cash crop soared and the United States invaded the former Spanish colony. By 1947, the sugarcane fields pulled an average 95 million gallons of water from the aquifer every day.

While the daily withdrawals eventually decreased, the extracting industries changed. As the United States sought to juxtapose its crown-jewel Caribbean colony with communist Cuba as an example of capitalist progress, the federal government lured mainland manufacturers here with lavish tax breaks and an American-educated workforce, sans the protections of U.S. labor laws. With accessible harbors a straight shot north from oil-rich Venezuela, the South Coast aquifer was reborn as a petrochemical and oil refining hub. But the oil embargo of the 1970s hit Puerto Rico hard, and that industrial development never yielded the riches it originally promised.


By the 1980s, the region still produced one-fourth of the island’s sugarcane. Today farms grow papayas, mangos and plantains. Yet between the neatly plowed fields that line Highway 3 sit fenced-off industrial facilities of agribusiness companies.

If farmers’ irrigation needs were fairly predictable after centuries of trial and error, environmentalists say it’s anyone’s guess how much water the companies use. At a Senate hearing this spring, Puerto Rican Department of Agriculture officials testified that at least half a dozen wells that serve industrial plants don’t even have meters, according to Victor Alvarado, a former Senate aide who now runs the environmental group Comité Diálogo Ambiental.

It’s unclear which sites to which regulators were referring. The Department of Agriculture did not respond to repeated requests by phone and email for comment.

The area around Salinas, however, is a who’s who of agrochemical behemoths, including Syngenta, DowDuPont spinoff Corteva, and Bayer-owned Monsanto. Just two of the companies named in this story responded to detailed questions sent over email. In a statement, Syngenta said its facility “draws water from a reservoir, supplied by a lake in Guayama, not from wells.”

“We voluntarily keep records of our water use from the reservoir, though it is not required,” spokesperson Ann Bryan said by email, adding that Syngenta’s facilities in nearby Juana Díaz draw from three wells.

Corteva said it faced shortages of well water during the rationing period, but continued to draw water from irrigation canals designated exclusively for agricultural uses.

“These were not included in the Government restrictions and we, along with our neighboring farmers, were able to use them,” Luis Colón, a spokesman for the company, said by email. “We report use, which is validated by personnel from the Department of Natural Resources of the Government of Puerto Rico.”

Fortunately, in Puerto Rico there are irrigation channels that are used exclusively for agricultural purposes. These were not included in the Government restrictions and we, along with our neighboring farmers, were able to use them.

The industry received more than $526 million in subsidies and tax breaks between 2006 and 2015, according to a 2017 analysis of government records by the nonprofit watchdog Centro de Periodismo Investigativo, or CPI. During that same period, those multinationals took control of 14% of Puerto Rico’s public lands, including many of its most fertile farmlands at a moment when the island produces only a small fraction of its own food. That year, Monsanto owned 1,711 acres, while Dow AgroSciences and Mycogen Seeds controlled a combined 1,698 acres, the report found.

That sheer size, Alvarado said, makes it hard to keep track of these companies. In actuality, officials, he said, “have no idea how much water companies use.”

Splash Of Coal Water

Overall, industrial use has trended downward since former President Bill Clinton started phasing out federal tax breaks to manufacturers in 1996. In 1985, industrial plants sucked up 12% of water pulled daily from the South Coast aquifer, according to U.S. Geological Survey data. That figure fell to 9% by 2002.

But not all industries here were attracted by tax breaks. That same year, Virginia-based utility giant AES opened the island’s first (and only) coal-fired power plant in Guayama, a town just 15 minutes from Salinas. From the start, the plant’s cooling towers required 225,000 gallons of water per minute to circulate, according to EPA documents. Water usage totaled 5 million gallons per day, one study showed.

The water came, and still comes, from a variety of sources. Both the AES plant and the publicly-owned Aguirre Power Plant Complex that neighbors it used a mix that included seawater, stormwater and freshwater drawn from wells that tapped the aquifer. AES did not respond to a request for comment.

But the problem isn’t just consumption. Unlike the Aguirre plant, which burns heavily-polluting fuel oil, AES actually offered ― ironically ― comparatively cleaner, cheaper electricity from coal. But the plant also generated millions of tons of coal ash, waste that grew from a grayish-brown mound into a five-story mountain as disposal became challenging on a 3,515-square-mile island.

The AES coal-fired power plant in Guayama. 

The AES coal-fired power plant in Guayama. 

And with that growing mound of ash came concern about its contamination of the island’s groundwater.

A groundwater analysis released in January found contaminants such as selenium, lithium and molybdenum exceeded the EPA’s maximum threshold by four to 14 times. A report AES commissioned from the Boston-based engineering consultancy Haley Aldrich found the coal ash had “no impact on drinking water” and there was “no evidence of impact on human health or the environment.” The contamination, the report found, didn’t penetrate the deep part of the aquifer from which public wells draw water.

But coal ash contains dangerous heavy metals such as arsenic, hexavalent chromium, cadmium and mercury, and the link between coal ash and water contamination is only starting to emerge. The North Carolina Institute of Medicine concluded last year that more research is needed to determine the cumulative impacts of long-term exposure. Early signs are alarming. The Agency for Toxic Substances and Disease Registry said some heavy metals and chemicals found in coal ash “can cause cancer after continued long-term ingestion and inhalation.” In March, the first national study to examine groundwater near coal-fired plants found that 242 of the 265 plants with monitoring data contained unsafe levels of one or more pollutants found in coal ash.

Between 2004 and 2014, Guayama ranked seventh out of Puerto Rico’s 78 municipalities with the highest incidence of cancer, according to Puerto Rico Cancer Registry data CPI cited in another report last year. Salinas placed sixth on the list.

Some here say windborne particles from the coal ash pile seem so ubiquitous they must be to blame, even if the contamination hasn’t spread deep into the drinking water.

Another form of pollution, meanwhile, had been seeping into the groundwater for decades. Nitrogen from poultry farms, pesticides and some leaking septic tanks in housing developments increased from a range of 0.9 to 5.9 milligrams per liter in 1967 to a range of 1.3 to 23.6 milligrams per liter in 2008, according to a U.S. Geological Survey study. Nitrate pollution is linked to various kinds of cancer, thyroid disease and respiratory problems in children.

“It’s a dire situation,” said Erik Olson, a water systems expert and senior director at the Natural Resources Defense Council.

Residents of Guayama are fighting against the AES Energy Plant, a coal-burning facility that is contaminating the aquifers an

Residents of Guayama are fighting against the AES Energy Plant, a coal-burning facility that is contaminating the aquifers and putting its neighbors at risk.

Yet real estate developers are burying even more septic tanks and paving over dirt that once absorbed much-needed water. Urbanizaciones, self-contained developments with retail and luxury housing, are on the rise, particularly in scenic areas like the South Coast, with its azure bays and views of the Caribbean Sea. Developers have long been accused of sidelining environmental impact concerns in a push to build.

In July, that looked poised to change. Former Gov. Ricardo Rosselló’s government was preparing to enact a new islandwide zoning policy that would have set uniform standards for considering the effects of pavement and developments on critical hydrological structures. But following Rosselló’s ouster in August after weeks of protests over his alleged corruption, talks have stalled.

“In the ’90s, you had almost unmitigated construction that not only destroyed many of the natural landscape characteristics but covered many of the sinkholes that are the main pathway for water to recharge aquifers,” said Raul Santiago, a researcher on environmental engineering at the Center for the New Economy, a San Juan-based think tank. “Today that problem is not as severe, mostly because of the economic downturn, so you don’t have as much construction; a silver lining from that crisis.”

‘Stretched Thin’

What flows from faucets in Puerto Rico is drinking water in name only.

The state-run Puerto Rico Aqueducts and Sewers Authority, or PRASA, has racked up fines for decades for failing to test the tap water for bacteria, chemicals and other contaminants, NPR reported last year. Between January 2016 and March 2018, 97% of Puerto Rico’s nearly 3.2 million residents were served by a drinking water system with at least one recent violation of the Safe Drinking Water Act’s lead and copper testing requirements. That’s nearly triple New Jersey, the second-place offender. PRASA did not respond to repeated requests by phone and email for comment.

The water-testing issue became particularly acute in the months after Hurricane María decimated the island’s infrastructure and caused the second-longest blackout in world history. Without access to running water and facing shortages of bottled water, Puerto Ricans drank from mountain springs and other natural sources contaminated with bacteria and other hazardous waste from Superfund sites. Nearly 75 people died of leptospirosis, waterborne bacteria spread by rats, in the first month after the storm. In December 2017, the Natural Resources Defense Council released leaked documents showing more than 2.3 million Puerto Rican residents “were served by water systems which drew at least one sample testing positive for total coliforms or E. coli.”

Graffiti reads "AES assassins" at an abandoned house in Guayama.

Graffiti reads “AES assassins” at an abandoned house in Guayama.

It’s partly a personnel problem. Between 2012 and 2017, the island’s Department of Health employed just one full-time chemist in the tap and bottled water testing laboratory, according to a source with direct knowledge of the staffing who requested anonymity for fear of reprisal. Since the hurricane, federal officials from the EPA and the Centers for Disease Control and Prevention increased the number of scientists testing water on the island. But the Department of Health lacks the equipment and authority to test aquifers for the kinds of chemicals and pollutants agribusiness plants commonly discharge, the source said.

The austerity federal authorities imposed on Puerto Rico in 2016 when the island collapsed under its $74 billion debt load also forced the territorial government to merge the Department of Natural and Environmental Resources with the Environmental Quality Board, the Solid Waste Management Authority and the National Parks Program. The Rosselló administration estimated the new super agency would save more than $5 million in the first year and over $50 million by 2023, the trade publication Caribbean Business reported. But it forced an agency whose traditional responsibilities, such as coastal management and flood protection, had grown more daunting to now also consider public health issues with a budget that was already “severely underfunded,” Santiago said.

“DNER has always been stretched thin,” he said. “Now it’s forced to reorganize itself in an even less proactive way.”

The savings from merging the agencies are set to be passed on in the form of repayments to the so-called Wall Street vulture funds that bought up Puerto Rico’s bond market debt on the cheap over the past decade. But the most obvious place to reinvest the money would be in overhauling PRASA’s water delivery system. The water utility last year reported losing nearly 50% of the potable water it produces to leaks and spills.

“That means water is extracted at an even quicker pace than it should be,” Santiago said, calling it “the most urgent issue in water management on the island going forward.”

‘Shock’ To The System

Post-hurricane Puerto Rico has become, in many ways, a poster child for what writer Naomi Klein dubbed “shock doctrine,” when so-called disaster capitalists swoop in to buy up parts of the distressed public sector in hopes of profiting off services the government once provided to taxpayers.

Even before the storm shredded the island’s aging power lines, the federally required spending cuts were propelling an effort to sell off the electrical utility. Some now fear PRASA could be next.

Private water systems serve just 12% of the United States, a study from the University of North Carolina found. But large privately owned water systems charged 59% more than their publicly owned counterparts, according to a 2016 Food & Water Watch survey of the 500 largest community water systems in the country. 

In debt-strapped municipalities, the threat of privatization looms large. Detroit started taking bids to sell off its water utility in 2014, a year after the city declared bankruptcy. Motor City residents have felt the pinch. Last year, officials threatened to shut off water to nearly 17,500 households that were behind on bills as part of what left-wing think tank Centre for Research on Globalization described as an effort to prime the utility for sale to profiteers.

Baltimore, racked by its own budget problems, voted in a referendum last November to become the first U.S. city to ban water privatization. Pittsburgh’s city council was considering a similar measure, Reuters reported.

It’s been tried before in Puerto Rico. PRASA contracted out the management of its water services during a wave of privatization in the mid-1990s under then-Gov. Pedro Rosselló. But the effects, as detailed in a 2007 report from the Puerto Rico comptroller’s office, were disastrous, with rapidly deteriorating service and soaring rates. The government declined to renew the contract with French utility giant Veolia in 2001. Another attempt to privatize PRASA in the early 2000s ended in contract disputes.

Enck called PRASA “one of the worst-run public water authorities in the country,” but said a better way to fix it would be to devolve control to communities and stack the utility’s board with scientists and local residents “who have a stake in wanting clean water.” There are examples of this working. In Guayabota, a town northeast of Guayama, a large non-PRASA system installed solar panels to provide renewable energy and has dramatically improved access and quality, according to an 85-page report out this month from the nonprofit U.S. Water Alliance.

“It can’t be business as usual,” she said. “PRASA needs to be completely reworked and democratically controlled at the local level.”

But in Puerto Rico, drinking water has functionally been a private service for decades as anyone with enough money bought bottled water from the supermarket anyway, Vega said.

“When I was young in Salinas, I was very poor, and I had to drink whatever we had,” he said. “But I started drinking bottled water when I got married about 30 years ago, and I always bottled water now. I don’t trust the water.”

That alone is setting the stage for another looming crisis as single-use plastic water bottles pile up in landfills, said Enck, who recently launched a nonprofit called Beyond Plastics at Bennington College in Vermont.

“More and more people are spending their limited money buying single use plastic water bottles,” she said. “People are probably spending more on bottled water than their PRASA bill in some instances. Of course, there’s no comprehensive recycling program for all of those plastic bottles.”

Manases Vega is considering leaving his hometown of Salinas due to health concerns.

Manases Vega is considering leaving his hometown of Salinas due to health concerns.

Last February, on the opposite side of the island from Vega, PRASA instituted water rationing in seven municipalities served by the Guajataca reservoir, a manmade lake nestled in Karst Country foothills of northwestern Puerto Rico.

The rationing in Salinas ended by September. But nowhere seems immune to the threat. Earlier this month, a private contractor hired to repair water lines cut off water service to some of the most populous parts of the San Juan metropolitan area.

As Vega’s illness worsens ― he suspects the windborne coal ash dust that blows over from neighboring Guayama inflames it ― the retired high school art teacher is considering abandoning his hometown. His wife has liver problems as well, and his brothers, one in Maryland, the other in Texas, are encouraging him to come to the mainland.

Despite everything, it’s not an easy decision. He grew up here. He taught generations of kids here. He was the renaissance man of Salinas, renowned as a great painter of landscapes and vibrant still lifes and a self-described “master pole vaulter” who once exercised daily on the beach.

“I have always lived here,” he said. “But it’s not easy to live here in Salinas anymore.”

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CESCO Digital app allows you to get your driving record from your cell phone

What a pleasant surprise to see PR finally do something better!  Now If only they could fix the unnecessary bureaucracy when you go in person, so you don’t have to waste an entire day waiting in line, going to several different places to complete the task!

Ahora podrás sacar tu récord choferil desde el celular con CESCO Digital

CESCO Digital app allows you to get your driving record from your cell phone.

Nov 3 2019

DTOP and PRITS reveal the new update of the application, which adds more services and benefits for vehicle owners and drivers.

San Juan, Puerto Rico – The CESCO Digital application, which allows citizens to make various arrangements from their mobile phone, thus avoiding having to visit a Driver Services Center (CESCO) or a Department of the Treasury Department, has been updated, adding more services and benefits for motor vehicle owners and drivers in Puerto Rico.

This was reported by the Secretary of Transportation and Public Works, Eng. Carlos M. Contreras Aponte, and the chief executive of Innovation and Information of the Government of Puerto Rico (PRITS), Glorimar Ripoll Balet.

The new version of CESCO Digital, available for free both in the Apple AppStore, for iPhone devices, and in Google Play for devices with Android operating system, will allow users to report errors in the application, access the list of Centers of Driver Services (CESCO) with their schedules and location, receive important notifications and download your driver record from your smartphone.

“The new function to download the driver record from the application, will give our users the power to acquire this document, necessary to be able to change the driver’s license in some states, work in land freight transport companies, as well as in taxi operating companies, among others, without having to physically visit a CESCO, ”explained Contreras Aponte.

Ripoll Balet, meanwhile, indicated that “for the creation and incorporation of each of the new features of CESCO Digital, we took the extra mile. For example, the list of CESCOs with their schedule and location, not only offers that basic information, but also provides the address with geo coordinates and an updated list of the services offered by each, including the issuance of Real ID. ”

“In the case of notifications, they will alert users with reminders about expiration dates of their license or tag, which will arrive 45, 30 and 15 days before, as well as the same day. In addition, it will notify you when your license and / or tag has been renewed, which will give more control and safety to drivers and vehicle owners, ”he added.

In addition to these new services and features in the CESCO Digital update, the application continues to be the easiest, most personal and safest platform to access the details of your vehicles and driver’s license, check your record of fines and pay them without having to go to a Department of the Treasury Department, and download the notification of renewal of the license of your vehicles, as well as the certificate of fines to your license or vehicles.

Currently, CESCO Digital presents a profile screen, from which the user can access their personal information, as well as review the history of their transactions. Similarly, it gives you the option to enter the application using your fingerprint or facial recognition, instead of having to enter your user information and password every time you want to use it. As an additional security measure, it provides for the user to establish a four-digit personal identification number (PIN).

“The success of CESCO Digital every day is greater. There are already more than 200,000 active users and more than $3.8 million has been raised in fines payments through the application. Similarly, more than 450,000 vehicle licenses have been downloaded, and more than 225,000 notifications have been sent, thanks to this innovative tool, ”said the Secretary of Transportation and Public Works.

Finally, both officials highlighted the commitment of the governor, Hon. Wanda Vázquez Garced, to continue this type of innovation that is making applications and technological platforms available to the public, aimed at improving their quality of life.



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Ban on cockfighting takes effect on December 20, 2019

The argument that cockfighting should be allowed to preserve jobs is weak.  Should the illegal drug trade, human trafficking, illegal trash dumping be allowed, to preserve the jobs of people working in those industries?  Get a better argument to defend cockfighting if you want to preserve it.


Ban on cockfighting takes effect on December 20

The industry reaches a defining moment as Congress returns from Thanksgiving recess Monday and language lawmakers are expected to discuss some measure to stop the ban

Saturday, November 30, 2019 – 9:28 AM

By José A. Delgado Robles

The government and the private sector estimate that the cockfighting business generates between $ 18 and $ 65 million annually. (GFR Media)

Washington – Efforts for Congress to approve a moratorium on the law extending the ban on cockfighting to Puerto Rico are reaching a decisive moment, as there only have 20 days left until an economic activity that represents up to $65 million annually for the island is declared illegal.

As Congress returns to session Monday and Tuesday after a 10-day Thanksgiving recess, the cockfighting industry and Puerto Rico’s government are racing against time to convince the leaders of the Senate and House Agriculture Committees to postpone the implementation of the ban passed in December 2018.

The destiny of some language seeking to stop the ban on cockfighting in Puerto Rico will go hand in hand with attempts to pass the federal budget for fiscal year 2020, which is scheduled for December 20, the same day the ban on cockfighting – an activity regulated as a sport in Puerto Rico – would take effect.

According to several sources, the decision whether or not to move forward with at least a year´s moratorium is largely in the hands of the chairs of the Agriculture Committees, Republican Senator Pat Roberts (Kansas) and Democratic Representative Collin Peterson (Minnesota), and minority ranking members , Michigan Democratic Senator Debbie Stabenow and Texas Republican Michael Conaway.

“We need the of the four leaders of the Committees (Agriculture), so that it can be incorporated (the measure) in the Appropriations Committee,” said lobbyist Paul Weiss, of Prime Policy Group, who is pushing in Congress on behalf of the Asociación Cultural y Recreativa del Gallo Fino de Pelea.

Amid pressure from groups fighting animal abuse, such as Humane Society, the biggest stumbling block seems to be convincing Democratic Senator Stabenow, said the president of the Asociación Cultural y Recreativa del Gallo Fino de Pelea Jeohvanni Nieves.

Although Republicans control the Senate -53-47- they need the minority approval to take most of the bills to a final vote.

“This is an uphill process,” said Resident Commissioner in Washington Jenniffer González. González said that seeking to include some language to support the moratorium, she will also examine the possibility of including the proposal in some agricultural measure that may need to be approved in December.

However, Weiss noted that there does not seem to be any agricultural bill in the agenda by December 20 that could be used as a legislative vehicle.

Therefore, in this scenario, the proposal to approve a moratorium on the ban on cockfights in Puerto Rico and other territories will rest on the also complicated possibilities that Congress leadership reaches a final agreement on the 2020 federal budget before December 20, which would open the door to include a multiplicity of issues to that bill.

If the federal government agrees again on another short-term budget resolution – such as the one in effect until December 20 – the limited chances of achieving a moratorium will reduce even further, as the next temporary fiscal measure is likely to be a limited bill with very few additional issues to the extension of the current spending level.

“We are looking for an extension for Congress to study the economic impact of the ban on cockfighting,” said Nieves, who believes that without a moratorium “it will be a sad Christmas for the “galleros” (rooster breeders), their families , farming areas and businesses” that benefit from the events organized in the island’s authorized cockfighting arenas.

Both the Asociación and Commissioner González focus their hopes in the bill the Puerto Rican Legislature approved a few days day seeking to declare cockfights as purely intra-state activities and that the federal law focuses on describing the industry as an interstate business.

That bill –Governor Vázquez has to sign into law – seeks to the federal restrictions imposed by law. The bill, originally drafted by New Progressive Party (PNP) Representative Urayoán Hernández, proposes a study on the restrictions included in the federal agricultural law that banned cockfighting in Puerto Rico and other territories, as of December 20.

Rooster breeders have also challenged the constitutionality of the federal ban. At the end of October, Federal District Judge Gustavo Gelpí rejected the lawsuit filed by the Club Gallístico de Puerto Rico and by the Asociación Cultural y Recreativa del Gallo Fino de Pelea, seeking to declare unconstitutional the law that extended the ban on the cockfighting industry to Puerto Rico and the other U.S. territories.

Currently, industry representatives are waiting for the review they have asked the First Circuit of Federal Appeals, in Boston, where they are also trying to stop the implementation of the ban.

If attempts to prevent the ban on cockfighting events fail, Weiss asked whether the U.S. government will have the necessary resources in Puerto Rico to arrest and prosecute those participating in such clandestine activities and fight crime too.

Nieves thinks that declaring cockfighting illegal while the activity is a regulated business is a contradiction.

Although the ban in the United States dates back several years, Nieves noted that there are still clandestine cockfights virtually in every state. Nieves also questioned the ability of the federal government, specifically the U.S. Department of Agriculture, to put a stop on a tradition strongly rooted in Puerto Rico.

The government and the private sector estimate that the cockfighting business generates between $18 and $65 million annually, as well as about 27,000 direct and indirect jobs.

According to the Executive Director at Puerto Rico Federal Affairs Administration (PRFAA), Jennifer Storipan, her office has supported the Commissioner’s efforts to gain the support of the Congressional Agriculture committees leaderships and stressed on “the possible impact” that the ban would have on the Puerto Rican economy, which is still in crisis.

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P.R. Public Housing Authority signs 3-yr, $4.27M contract for gunshot detection tech from ShotSpotter


The bad is that there is so much crime, so much illegal gun usage that PR needs to spend over $4 million on ShotSpotter technology for 3 years of monitoring.  That’s $1.42 million PER YEAR!  The good will be IF this makes gunshots, crime go down.

P.R. Public Housing Authority signs 3-yr, $4.27M contract for gunshot detection tech

P.R. Public Housing Authority signs 3-yr, $4.27M contract for gunshot detection tech

The Puerto Rico Public Housing Authority has entered into a a three-year, $4.27 million contract with ShotSpotter Inc., a technology that helps law enforcement officials identify, locate and deter gun violence.

The technology will be deployed in portions of the capital San Juan, Bayamón and Trujillo Alto, the company said.

ShotSpotter expects to complete the deployment and go live in all of the coverage areas by the end of the first calendar quarter of 2020.

When Puerto Rico is fully deployed, it will become the fifth-largest ShotSpotter customer, following significant U.S. deployments in Chicago, New York, Las Vegas and Miami-Dade County. One hundred U.S. cities currently rely on ShotSpotter gunshot detection technology, the company said.

“This administration is strongly committed to making our communities safer to guarantee a better quality of life for them,” said William Rodríguez, Puerto Rico Public Housing administrator.

“ShotSpotter has a strong track record of success and we know it will be a valuable tool for us to pinpoint the location of gunfire and thus enable a quicker response. This is one initiative that, in hand with community leaders and the government, will empower law enforcement agencies and PRPHA to take appropriate actions against gun violence,” he said.

ShotSpotter President Ralph A. Clark said “Having successfully collaborated with Puerto Rico and local law enforcement in previous deployments, we are confident ShotSpotter can help combat gun violence on the island to make it a safer place for residents, businesses and tourists.”



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FBI agent carjacked in Ocean Park section of Puerto Rico. If he isn’t safe, how can the average citizen feel safe?

If a trained FBI agent with a gun isn’t safe from carjacking, how can the average citizen feel safe?  The crime situation is out of  control!


The FBI offers reward in case of assault and attempted carjacking against one of its agents.  The three men stripped the agent of his wallet, his identification and his regulation weapon.

Monday, November 25, 2019 – 9:28 PM


Douglas Leff (left) said the three men gunned the special agent and stripped him of his weapon from his wallet, his FBI ID and his regulation weapon. (Gerald López Cepero)

The head of the Federal Bureau of Investigation (FBI) in Puerto Rico, Douglas Leff, informed by written communication that the agency will offer a reward of $ 25,000 for the person or persons offering information that leads to the identification, arrest and conviction of the individuals responsible of assaulting and trying to steal a special agent’s vehicle.

According to the information provided by Leff, three individuals driving a black Mercedes Benz car last Saturday arrested the agent, whose name was not disclosed, at the intersection of Cacique Street and Las Americas Avenue in Ocean Park.

The three men gunned the special agent and stripped him of his weapon from his wallet, his FBI ID and his regulation weapon.

Anyone who has information to help clarify the case can contact the San Juan FBI Office at 787-754-6000 or submit the information through the tips.fbi.gov portal.

El FBI ofrece recompensa en caso de asalto e intento de carjacking contra uno de sus agentes

Los tres hombres despojaron al agente de su cartera, su identificación y su arma de reglamento

lunes, 25 de noviembre de 2019 – 9:28 PM


Douglas Leff (izq.) dijo que los tres hombres encañonaron al agente especial y lo despojaron de su arma de su cartera, su identificación del FBI y su arma de reglamento. (Gerald López Cepero)

El jefe del Negociado Federal de Investigaciones (FBI) en Puerto Rico, Douglas Leff, informó mediante comunicación escrita que la agencia ofrecerá una recompensa de $25,000 para la persona o personas que ofrezcan información que conduzca a la identificación, arresto y condena de los individuos responsables de asaltar e intentar hurtar el vehículo de un agente especial.

De acuerdo a la información provista por Leff, tres individuos que conducían un automóvil Mercedes Benz negro el pasado sábado detuvieron al agente, cuyo nombre no fue revelado, en la intersección de la calle Cacique con la avenida Las Américas en Ocean Park.

Los tres hombres encañonaron al agente especial y lo despojaron de su arma de su cartera, su identificación del FBI y su arma de reglamento.

Cualquier persona que tenga información que ayude a esclarecer el caso puede comunicarse a la Oficina de San Juan del FBI al 787-754-6000 o someter la información mediante el portal tips.fbi.gov.

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Legal group predicts avalanche of foreclosures in P.R. in 2019

While it must be tragic to lose a home to foreclosure, people must honor their commitments to repay when they receive a loan.

Legal group predicts avalanche of foreclosures in P.R. this year

Legal group predicts avalanche of foreclosures in P.R. this year

Mortgage foreclosures in Puerto Rico are at critical levels, with great repercussions for Puerto Rican society, contrary to the panorama official figures paint, accordig to an analysis from nonprofit organization Legal Help Puerto Rico.

Ariadna Godreau-Aubert, executive director of the non-profit organization, explained that “the crisis does not affect all people alike. People suffer as well as entities, but there are more vulnerable and they tend to face this painful process alone, and it doesn’t have to be like this. They have rights and options and must receive help.”

“Hurricane María left 300,000 houses affected, in an island already suffering from an economic crisis, with a poverty level between 42% and 53% of its population,” said Godreau-Aubert.

“In 2017, the year of Hurricanes Irma and María, there were 16 foreclosures registered per day. This year, January and February alone, 459 homes were executed by the banks, which is alarming, and motivated us to create this protocol to help both individuals and institutions to face the situation,” she said.

Godreau-Aubert, along with attorneys Ricardo Ramos, director of the Mortgage Foreclosures Clinic at the University of Puerto Rico Law School, and Tania Morales-Cruz, LHPR’s public policy owner analyst, revealed that the real figures transcend those published by the Office of the Commissioner of Financial Institutions, known as OCIF, which do not include cases filed at the federal bankruptcy court.

LHPR analyzed all figures for: mortgages more than 90 days overdue; bankruptcies, accounts sold to other financial institutions, properties on auction, under execution, submitted to the Federal Court, and in default. All cases total more than 250,260 homes at risk.

“Official data doesn’t say it all,” Ramos said. “According to OCIF, the number of homes executed by the banks, between 2016 and 2018, has dropped, but that’s an artificial depletion as OCIF does not include sold loans or bankruptcy court cases, neither auctions or reverse mortgages.”

Ramos explained that an increase was expected in 2017, but moratoriums on mortgage payments and temporary closure of courts postponed cases, creating an artificial decline.

Problems of access to justice further exacerbate the situation for the population, the group said.

“So, as the information is very technical; often in English, the orientation by banks is inadequate, lack of education and legal representation, and the situation causes great emotional weight, a lot of people face this process alone and it doesn’t have to be like this,” said Godreau-Aubert.

The organization declared this crisis a “national emergency” for it estimates that more than 25% of the population, more than 750,000 people, are affected. They stressed that there are more than 250,260 homes at risk of execution.

Consumers have options.  
The organization’s “first aid protocol” recommends several steps for service provider institutions to properly identify and channel foreclosure cases, and for mortgage owners to know what options they have.

“We want people to know their rights and receive the legal accompaniment they need. We are concerned that vulnerable groups, such as seniors, people with functional diversity, women, receive the necessary assistance,” according to the protocol document.

In most cases it is possible to detect when a person is at risk of having their home foreclosed. If the person has not failed to comply with a payment but is contemplated that they will eventually have difficulty meeting it, the bank may be asked to negotiate to improve the conditions of the mortgage and save the property. No one can be removed from their home by the bank. A court process is required to start and be completed, the document says.

LHPR’s protocol covers topics such as: telephone calls, guidance, judicial process, alternatives before foreclosure, responding to lawsuits, compulsory mediation, sentencing, auctioning, loss mitigation, judicial sale, chronology of events, vulnerable people, and a directory of free legal services, among others.

Call to banks, government
.  The group has made a call to the banking sector to make information more accessible to its clientele and to adopt social responsibility criteria, as well as a call to the government to “declare a state of emergency in view of the avalanche of foreclosures.”

The government, they added, must take steps to paralyze all processes, including auctions, and convene a special commission to address Puerto Rico’s mortgage crisis.

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Act 20, Act 22 bring talented people from the states who hire thousands of Puerto Ricans, invest billions of dollars in PR

This is a great program to help revive Puerto Rico by injecting capital, buying property, cars, household goods, and hiring thousands of Puerto Ricans.  Without these incentives, these talented people would not have been attracted to move to Puerto Rico.


Report: Since 2015, fiscal impact of Act 20 incentives is $210 million

By María Miranda on November 12, 2019

DDEC Secretary Manuel Laboy and Estudios Técnicos CEO José “Joaquín” Villamil (María Miranda/CB)

Stresses that ‘Act 22 grantees are no billionaires’

SAN JUAN — A study commissioned by the Puerto Rico Economic Development & Commerce Department (DDEC by its Spanish initials) on the laws approved in 2012 to attract investors was presented Tuesday at a roundtable with business reporters at the Puerto Rico Industrial Development Co. (Pridco) building in Hato Rey.

DDEC Secretary Manuel Laboy and  José “Joaquín” Villamil, the chief executive officer of consulting firm Estudios Técnicos, which was commissioned to conduct the research for the “Performance of Incentive Programs Act 20-2012 and Act 22-2012” report, as well as some former economic development heads, explained the results.

From 2015 to June 2019, some 1,680 companies were conferred the incentive benefits of Act 20, the Export Services Act. Before that, 211 decrees had been granted between 2012 and 2014. Thirty five percent of the decrees have been awarded to local firms, according to the report.

Act 22, known as the Act to Promote the Relocation of Individual Investors to Puerto Rico. It entices potential investors to move to Puerto Rico with a 100 percent tax exemption on all interest, dividends and long-term capital gains.

After the 410 decrees awarded under Act 22 by 2014, an additional 2,202 more were granted from 2015 to mid-2019.

Act 20 aims to promote the island as an international export business hub. The law provides incentives to companies that export services such as a 4 percent corporate tax rate and 100 percent tax exemption on dividends from business earnings derived from export services. Some 8,257 jobs directly “linked to export-related activities” were created from 2015 to 2019, the report says.

The fiscal impact of Act 20 businesses, from 2015 to June 2019, is estimated at $210 million.

The results of the new report, the Economic Development secretary said, “reveal that under the Export Services Act, some 36,222 jobs were created from 2012 to mid-2019. The previous study, presented in 2016, revealed that, at that time, some 7,400 jobs had been created, and the 10-year projection was to create 56,601 jobs. Meanwhile, in 2015, the investment totaled some $500 million. The new report found that this line increased to $1.2 billion. These are very positive results, as they show that the law is fulfilling its mission of boosting Puerto Rico’s economic development by exporting the services and/or products that we generate on the island.”

Nevertheless, the report says that estimating the impacts of Act 22 is more complex than those of Act 20, but among the findings are that 35 percent of individual investors started a businesses in Puerto Rico, including some that operate under Act 20. Between 2015 and mid-2019, the total real estate investment by decree-holder is estimated a $1.3 billion.

Between 2015 and mid-2019 some 4,400 direct jobs were created by Act 22 investors, whose “planned capital investments are estimated at $678 million,” the report reads. Some 68 percent  of these beneficiaries have purchased real estate in Puerto Rico “and 32 percent currently rent a property on the island,” Villamil noted. “The value of the real estate purchased was more than $1.3 billion. The total value of a year’s estimated rent equals $560 million.”

Villamil said that more than 81 percent of these individuals have a net worth of less than $10 million and 2.8 percent have a net worth of more than $50 million. A bulleted section of the report is titled: “Act 22 grantees are no billionaires.” 

“There is a strong misconception of Act 22 grantees as ‘super rich’ individuals,” the report reads, adding that the “above evidences that Puerto Ricans in the U.S. with a net worth of over $1 million could consider the benefits of Act 22 as an incentive to relocate, retire or contribute to the local economy.”

It adds: “Debunking the above misconception could open the door for a bigger pool of successful diaspora members (5.2 million Puerto Ricans in the U.S.) that could invest in Puerto Rico.”

By 2029, it is estimated that some 6,392 decrees should be approved under Act 22. More than 14,600 jobs are expected to have been created by that year.  According to the report, the aggregate impact on the housing sector projected from 2015 to 2029 could reach $7.4 billion in purchased properties and nearly $450 million in rented properties. 

It should be noted that under the stipulations of the Incentives Code, incentive decree beneficiaries will have to purchase property on the island.

Laboy said that after going over the results of the study, the DDEC has identified several areas of “opportunity to maximize the performance” of both laws.

“The public policy of the administration of Gov. Wanda Vázquez is to continue to evaluate all the initiatives and laws we implement,” Laboy said. “Like everything else, there are always opportunities to maximize the results. For example, we have identified great potential to attract Puerto Rican entrepreneurs residing in the United States who are eligible to invest on the island through Act 22 of 2012. There is also an opportunity to continue promoting the export of products and services. In addition, cooperatives and commercial banking can benefit from the transfer of investors’ capital to the island. We will continue to evaluate these results to make the necessary adjustments that allow us to achieve or exceed the stipulated projections.”

Access the report here:Download


The Act 20/22 Study

The Act 20/22 Study

By on January 21, 2016

Tax incentives created by Acts 20 and 22 of 2012 to promote exports and attract investors should remain in place because they can boost Puerto Rico’s economic development, with several thousand new jobs created thus far and millions of dollars invested in local real estate, but the public and private sectors still need to capture their spillover effects, a study commissioned by the Economic Development & Commerce Department (DDEC by its Spanish acronym) has found.

By spillover effects, the study means economic events in one context that occur because of something else in a seemingly unrelated context. For instance, if an incentive helps create several information-system companies, it would yield a demand for trained people in that field that may not have been there previously. A spillover effect would be a local college or university deciding to create a program to train individuals in information systems to fill that void. Another example would be when an incentive creates the need for trained individuals in construction or engineering, and a university creates a training program to provide personnel for it. The study “recognizes the need for the government as well as the private sector and service providers to capture the spillover effects of the laws.”


The research, conducted by the firm Estudios Técnicos, measured the impact of the
law for the year 2014 and uses as a basis the annual reports submitted by the companies that use the laws and their application for decrees.

The study, whose preliminary results were obtained exclusively by Caribbean Business, encompasses 328 decrees approved under Act 20, and 574 decrees approved under Act 22 from 2012 to November 2015. However, to date, there are a total of 1,291 decrees that have been either signed or are pending approval.
To continue attracting investors, DDEC is promoting the 2016 Investment Summit that is slated to be held Feb.11 and 12 at the Puerto Rico Convention Center in San Juan. The summit is a forum in which guest speakers seek to promote Acts 20 and 22, as well as other incentives such as those provided by Act 73, the Industrial Incentives Law, and Acts 273 and 399, which provide incentives for financial and insurance centers.

Act 20 of 2012 promotes the export of services through incentives that include a 100% tax exemption on earnings and profit distributions on income generated from export services; a 4% flat income-tax rate on income generated from export services or a 3% tax when more than 90% of a service provider’s gross income is from export services; and a 100% property-tax ex-emption for the initial five years of operation for certain export services.

Along with Act 20, the government passed Act 22, the “Act to Promote the Relocation of Individual Investors,” which offers nonresident individuals 100% tax exemptions on all interest, dividends and long-term capital gains to entice them to move to Puerto Rico. An individual’s 183-day physical presence in Puerto Rico establishes a presumption of residency under the Puerto Rico Tax Code.

This new law has attracted much interest because U.S. citizens, even when they live abroad, have to file federal income-tax reports, with the sole exception of Puerto Rico, which is the only place in the world U.S. citizens don’t have to pay federal income taxes unless they report stateside income. Wealthy taxpayers who opt to re-establish overseas to a foreign country have to surrender their U.S. passports and pay an exit tax of 23.8% on unrealized capital gains, but not in Puerto Rico.


While the study acknowledges that any analysis on the laws’ impact is premature because it takes at least five years to observe their effects on the local economy, the study did conclude that Acts 20 and 22 have the capacity to yield investments, stimulate construction and help spur the service industry.

“The programs only have been around three years and we have to let them become ripe. I have noticed a [sense of] desperation in trying to move the process forward instead of letting it take its natural course,” DDEC Secretary Alberto Bacó said to Caribbean Business.

The secretary noted the need to attract new capital to Puerto Rico, which has lost about $150 billion in capital because of property devaluations and the downgrades in bank stocks and the island’s credit rating.

The study found that Act 20, or the Export Services Law, could represent an impact of 1% of Puerto Rico’s gross domestic product, which was around $103 billion in 2014. “This is high compared with similar programs such as the EB-5 (a program created in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors), which had an impact of 0.7% in the U.S. economy in a period of 20 years,” the study says.

In 2014 alone, Act 20 created 3,713 direct, full-time jobs in Puerto Rico with an average salary of $45,000 a year and a total annual payroll of $78 million. The study didn’t say if these numbers met DDEC’s goals, but it does say that those numbers are expected to go up in the coming years. The average salary in Puerto Rico is $27,500 a year, so Act 20 is having a positive impact in terms of increasing average salaries for local employees. The total income of companies that have decrees under Act 20 is $1.2 billion, while the amount in individual taxes paid by the jobs created by the program is estimated at $13.7 million a year. “The projection is that some 45,000 new jobs will be created in the service sector over the next 20 years,” the study says. Bacó said the growth of Act 20 has been spurred by the high number of local businesses that are now taking advantage of the law to export their products. Overall, Act 20 has shown growth in three categories. These are local businesses that want to export their products; new residents who have moved to Puerto Rico because of Act 22 and now want to export services through Act 20 incentives; and businesses that weren’t originally from the island, but have moved their operations to Puerto Rico, he said.

The projection is that some 45,000 jobs will be created in the service sector over the next 20 years, the study says. Besides Condado, investors have moved to Dorado, Rincón and Humacao.

Exporting their services and products has become important for many local businesses as the island’s population continues to shrink. Puerto Rico’s nearly 10-year economic malaise has resulted in more than 200,000 people leaving the island for the U.S. mainland between 2010 and 2014, a 10% drop, according to the U.S. Census Bureau.

The numbers reflect a 61% increase in Act 20 decrees from 2012 to 2013, a 138% increase from 2013 to 2014 and a 151% increase from 2014 to 2015. In 2013, some 53 decrees were signed under Act 20 compared with 129 in 2014.

PaseoCaribeAct 22, or the Individual Investors’ Law, on the other hand, resulted in $260 million in real-estate investments in Puerto Rico during 2014, something particularly relevant due to the excess inventory of homes (both apartments and houses) that have to be sold. The act also yielded $50 million in property mortgages and $73 million in consumption expenditures for that year.

“The projection is that the law could have an impact of $1.7 billion over the next 10 years,” the study says. Act 22 shows a 617% increase in decrees from 2012 to 2013, a 104% increase in decrees from 2013 to 2014 and a 34% increase from 2014 to 2014.


Still, the study acknowledges that the true impact of Acts 20 and 22 can’t be measured only by the number of jobs created, but by their long-term effects over the “internationalization” of local services—designing products in such a way that they can meet the needs of users in many countries—as well as the development of technical knowledge that can stimulate local innovation.

“This requires the private sector to broaden its business horizons and seek a market beyond internal demand,” Bacó said.

Another important finding from the study is that Acts 20 and 22 must work in tandem to be successful. Bacó said that in the past, there was a law in Puerto Rico that promoted exports but it wasn’t successful.

“The programs have been successful, but they are just one of the 15 to 20 initiatives that we have. These alone aren’t going to take us out of [the commonwealth’s] economic problems,” he said.

In that regard, Bacó said Puerto Rico still needs an economic alternative similar to Section 936 that gave tax credits to U.S. subsidiaries operating in Puerto Rico and was gradually phased out by 2006. “The time is good to do it now. The matter has been on the table in the U.S. House & Ways Committee and we should all be together to get this because it is best for these businesses to stay in the U.S. than to move to a foreign jurisdiction like Ireland,” he said.


Bacó as well as DDEC’s Assistant Secretary Juan Carlos Suárez disputed claims that the local government is benefiting U.S. investors in favor of the local residents who are carrying the brunt of paying taxes.

Bacó said Act 185, the Private Equity Funds Act, gives local investors “the same benefits that millionaire investors get under Act 22. “Anyone who has money to invest can benefit,” he said.

Still, he noted changes have been made to make Acts 20 and 22 more efficient and prevent abuse. Act 22 already requires millionaire participants to make investments and buy housing as it is focused upon enhancing foreign investment.Convention

“More importantly, they have to open up local bank accounts. We have to continue the evaluation,” Suárez said.

While DDEC does background checks on millionaire investors to take out any “undesirable people,” the investors are required to open up bank accounts because banks also do background checks.

“We have denied decrees to about 2% or 3% of the applicants. We believe this is a right, not a privilege,” Bacó said, adding that individuals have been rejected for failing criminal background checks. Regarding Act 20, officials want to increase the number of jobs that each business creates. The law doesn’t specify a minimum number of jobs that each decree must establish. To date, though, the average number of fulltime jobs per decree is 11.

Bacó said he is also making eff orts for the decrees to be more transparent. For example, Act 20 applicants must agree to appear with the government in press conferences and provide information about their decrees because it helps promote the positive aspects of the law.

The government tries not to reveal information on Act 22 applicants because they are families that expect a certain degree of privacy, he noted.


While the study says more needs to be done for the island to benefit from the spillover effects of the incentives, Acts 20 and 22 have helped create a new industry that helps cater to the needs of beneficiaries of the laws. Besides new investments, the acts have spurred new types of services in the areas of human resources, law, banking, insurance and real estate. They have also brought more companies from the defense industry, which must operate in a U.S. jurisdiction.

AlbertoBacoIndividuals who have benefited from the laws are spread all over the island in places such as Dorado, Humacao, Rincón and San Juan.

Among the well-known individuals and companies are Richard Melero, the principal of a commercial and real-estate firm; the St. Claire Group, which is taking control of Empress Hotel in the Isla Verde neighborhood of Carolina; and Elliott Group and Interlink, which have taken over Ambassador Hotel in the Condado neighborhood of San Juan.

The select list also includes the Morgan Reed group, which is buying properties in Santurce and other areas in San Juan, as well as Putnam Investments, which is headed by another Act 22 businessman, Nicholas Prouty.

Orlando Bustos, the head of OHorizons Networks, a management consulting firm, is also a beneficiary of the programs and recently purchased real estate around Meliá Hotel in Rio Grande.

Other people who have moved to Puerto Rico and have been featured by Caribbean Business include Frank L. Holder, chairman of the Latin American region of FTI Consulting, which includes offices in Buenos Aires, Bogotá, Madrid, Mexico City, Panama City, São Paulo and Rio de Janeiro. Holder, who was previously based in Miami, is a specialist in forensic and litigation consulting, with expertise in risk management, national security,  operational risk and uncovering money-laundering operations.

The list also includes important hedge funds such as Randy Swan’s Swan Wealth Advisors, Mark Graham’s Blue Alternative Asset Management, John Helmers’ Long Focus Capital, Damon Vickers’ Nine Points Capital Management, Peter Schiff ’s Euro Pacifi c Management, Steven Stuart’s Garrison Investment Group and Thomas McOsker’s and Nick Paidas’ BloxTrade.

By Eva Llorens Vélez


Nearly 1,400 companies have settled in Puerto Rico since Act 20 was enacted

Nearly 1,400 companies have settled in Puerto Rico since Act 20 was enacted

By on March 6, 2019

SAN JUAN– A total of 1,387 companies have moved to Puerto Rico since Act 20, known as the Export Services Act, was enacted in 2012, according to a release issued by tax and accounting consulting firm BDO Puerto Rico.

The latest data, BDO said, shows that in 2018 some 610 established themselves on the island, the largest number for a year yet. Last year’s data contrasts with 2017, when Hurricane Maria struck the island and the number of companies that settled in Puerto Rico numbered 161.

Act 20 aims to promote the island as an international export business hub to spur its development. It grants a tax exemption decree to local service companies that export services abroad. Benefits include a 4% corporate tax rate and a 100% tax exemption on dividends from business earnings derived from export services.

Act 20 covers such sectors as consultancy, legal services, call centers, health services, advertising, construction, engineering, architecture and electronic data processing services.

“Puerto Rico tax exemption laws work in conjunction with Section 933 of the U.S. Internal Revenue Code. The code establishes that the income that a Puerto Rico bona fide resident receives from sources within the island throughout the taxable year is not subject to U.S. federal tax,” the release explained, with BDO Puerto Rico partner and head of its Tax Advisory Services division, Gabriel Hernández, CPA, saying the island now has more  opportunities “following the approval of federal funds for the reconstruction of Puerto Rico.”

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