Thursday, April 26th, 2018
More than seven months after Hurricane Maria devastated the U.S. territory of Puerto Rico, damaging or destroying homes and demolishing much of the island’s infrastructure, more than a hundred thousand Americans are still without power, as part of the worst blackout in U.S. history.
On Tuesday, May 1, in Blackout in Puerto Rico, FRONTLINE and NPR investigate how the federal response in Puerto Rico left millions of Americans in the dark for months — and the storm before the storm: how Wall Street, Puerto Rico’s government, and Washington fueled a debt crisis that left the island’s economy in ruins and its infrastructure crippled even before Maria hit.
“What happened in Puerto Rico in the wake of Hurricane Maria was actually the result of two disasters — one natural, and one man-made,” says NPR’s Laura Sullivan, who spent seven months investigating the recovery effort with FRONTLINE producer Rick Young and his team. “We went in search of the people who could tell us what really happened.”
The investigation includes the May 1 FRONTLINE documentary on PBS, and a two-part series on All Things Considered beginning April 30. It uncovers a trove of insider documents and emails that show a government relief effort in chaos, struggling with key contracts, basic supplies and its own workforce.
“All of a sudden, about the eighth day in, the administration asked us to be able to step up and to be able to take on this mission of grid repair,” Lt. Gen. Todd Semonite, Chief Engineer of the Army Corps of Engineers, tells FRONTLINE and NPR about his agency’s effort to restore power. “But it is not something that we even planned on doing in any kind of a disaster. We don't do grid repair, usually, normally, doctrinally ...”
The film, produced with the Investigative Reporting Workshop at American University, also uncovers a series of other shortcomings after Maria: how half of FEMA’s staff on the island were trainees or unqualified, and how the Army Corps’ temporary roof repair program was glaringly slow compared to other storms — putting up just 439 roofs in the first 30 days after the storm compared to more than 4,500 in the first month after Irma in Florida.
As the reporting team dug deeper into the recovery, they found particular problems with FEMA’s contracts for tarps, a staple of emergency supplies. Two contractors FEMA turned to failed to deliver hundreds of thousands of tarps, leaving the devastated homes of many Puerto Ricans exposed to the elements for months. FRONTLINE and NPR also found that a third contractor imported tarps from China, despite federal contracting regulations prohibiting such imports. The agency has since suspended the contractor.
In an interview with FRONTLINE and NPR, FEMA’s Michael Byrne defends the federal response, saying the real villain is the storm: “We've done nothing but try to remedy that. You've found a number of places where we weren't perfect, I'll accept that, bring it on, okay. I'm gonna keep working to get better.” Underpinning it all, Blackout in Puerto Rico delves into Wall Street’s role in the island’s economic demise — a crisis that left it dangerously vulnerable to a storm like Maria. For more than a decade, the Puerto Rican government turned to Wall Street to cover deficits, piling up more and more debt. The film shows that even though Puerto Rico was spiraling into economic collapse and its bond rating had been downgraded to junk status, Wall Street managed to raise money for a bond worth $3.5 billion dollars – the biggest of its kind in U.S. history. And while the banks had said they were trying to help Puerto Rico manage its finances, about a quarter of the deal went to pay loans, pay fees and eliminate risk for banks directly involved.
“They wanted to try to get as much as they could of their exposure, out of their books,” says Axel Rivera, who was at Morgan Stanley when the record 2014 deal was done and who is speaking out publicly for the first time. “The banks get out, and everybody else gets stuck with the bill.”
“In Puerto Rico, the crisis is, ‘Look at what the Puerto Ricans did.’ Wall Street – nobody talks about Wall Street, or very few people talk about what Wall Street did. And I suppose I’m part of Wall Street,” says Carlos Capacete, who for years worked at UBS, another major bank, and is also speaking out publicly for the first time. “But the bonds that were sold that created the huge seventy-four-billion-dollar loan debt in Puerto Rico… was sold using all the investment bankers in Wall Street. They would come down and pitch the deals and they knew they were doing deficit financing and they knew that the economy was shrinking. And if the banks would have been responsible, and would have said ‘Hey, listen, you can’t borrow this amount so we’re just going to limit this to that,’ we wouldn’t be in this place right now.”
And finally, the investigation examines the American government’s inconsistent policies towards the territory of Puerto Rico, which it took over in 1898. Under tax law, Puerto Rico is a foreign entity, but under maritime law, it’s part of the U.S. And its citizens don’t have full constitutional rights: For example, they can serve in the military, but can’t vote for the president. Blackout in Puerto Rico traces the relationship between Puerto Rico and the U.S. — including how Congress’s withdrawal of a special tax break helped spur the Puerto Rican government’s cycle of debt and borrowing.
FRONTLINE and NPR previously collaborated on an investigation of the Hurricane Sandy relief effort, Business of Disaster, and an investigation of America’s affordable housing crisis, Poverty, Politics and Profit. Gripping and riveting, this latest investigation is a must-watch look inside the ongoing recovery effort in Puerto Rico — and the economic crisis that left the island’s infrastructure crippled even before the storm hit.
Blackout in Puerto Rico premieres Tuesday, May 1, at 10/9c on PBS (check local listings) and online at pbs.org/frontline. In addition to the documentary, a two-part series will air on NPR’s All Things Considered beginning April 30 (see stations and local broadcast times at NPR.org/stations).
Blackout in Puerto Rico is a FRONTLINE production with American University School of Communication’s Investigative Reporting Workshop in collaboration with NPR. The producer and writer is Rick Young. The correspondent is Laura Sullivan. The co-producers are Fritz Kramer and Emma Schwartz. The reporters are Laura Sullivan, Emma Schwartz and Kate McCormick, a FRONTLINE-IRW post-graduate fellow. The executive producer for FRONTLINE is Raney Aronson-Rath.