Scandal embroils Puerto Rico as whistleblower, top aide trade corruption claims

The most serious political crisis to hit Puerto Rico Gov. Jenniffer González’s young administration escalated this week, with two senior officials trading allegations of corruption and undue influence.

The turmoil dates back to last month, when Puerto Rico’s head of economic development resigned and accused the governor’s top aide of interfering with an investigation tied to allegations of bid rigging in a federally funded procurement process.

On Thursday, González’s chief of staff, Francisco Domenech, fired back, submitting sworn statements to Puerto Rico’s Justice Department and Office of Government Ethics accusing Sebastián Negrón Reichard, the former secretary of the Department of Economic Development and Commerce, of corruption and conflicts of interest.

Both men have denied the allegations against them.

“The most troubling aspect of what happened today is not the attack against me personally, but the message it sends to every public servant who witnesses irregularities and decides to report them,” Negrón said in a statement released Thursday.

Domenech defended his allegations against Negrón during a televised appearance, saying he “examined all the documentation” and “conducted all the interviews [he] needed to conduct.”

The fallout of the widening rift has reached Washington, where Republican Sen. Mike Lee of Utah questioned González on Capitol Hill earlier in the week.

“How can Congress be assured that federal funds sent to Puerto Rico aren’t being misused or misplaced?” Lee asked.

González defended the oversight system and said the allegations against Domenech are false. Asked why Negrón would accuse Domenech, she said: “I don’t know what political motivations he may have.”

The controversy

At the center of Negrón’s complaint is a competitive bid for advertising services funded with federal money and administered by Puerto Rico’s Office of Permit Management.

Submitted to an independent state watchdog, Negrón’s complaint alleged that two of his agency’s employees reported that members of an evaluation committee were pressured in the name of the governor or officials in La Fortaleza to favor one bidder over another.

After receiving those reports, Negrón says he notified the governor and her chief of staff, ordered his agency’s general counsel to begin an internal evaluation and took administrative steps to halt the bid process.

The complaint says the internal evaluation later led to referrals to the Justice Department, Office of Government Ethics and comptroller’s office. On June 10, the head of the Department of Justice in Puerto Rico referred two senior officials with the Office of Permit Management to the special independent prosecutor’s office with a recommendation that a prosecutor be appointed to investigate possible criminal conduct.

Negrón’s complaint goes further. He alleges Domenech repeatedly opposed removing the two employees from their positions and acted in coordination with one of them to “neutralize” the Department of Economic Development and Commerce internal evaluation.

One of Negrón’s most politically sensitive claims involves a legal opinion issued by Puerto Rico’s Justice Department. According to the complaint, as the Economic Development agency was carrying out its investigation, the opinion questioned its authority over the permitting office where the corruption was alleged to have occurred. Negrón alleges Domenech later admitted he had authorized the Justice secretary to issue the opinion and acknowledged it was a mistake, saying: “mala mía.”

In another allegation, Negrón says Domenech instructed his undersecretary to stop summary suspensions Negrón had signed based on the internal evaluation’s recommendations. Negrón also alleges Domenech made direct requests involving contracts locking in preferential tax rates, including one tied to Opus Miramar, a project he says was represented by Politank, Domenech’s former lobbying firm.

Domenech testified before the Puerto Rico Senate that he stopped owning Politank on Dec. 31, 2024, after the firm bought back his shares in a $4 million transaction.

Negrón’s complaint also accuses Domenech of using partisan criteria when discussing fiduciary roles at the economic development agency. In one written communication, according to the complaint, Domenech allegedly said he would not tolerate people outside the pro-statehood New Progressive Party in trust positions.

Domenech’s counterclaim accuses Negrón of conflicts of interest tied to incentive and tax-decree procedures that allegedly benefited clients linked to the law firm of Negrón’s 88-year-old grandfather.

Domenech alleges Negrón was instructed to remove himself from any negotiations involving his grandfather’s firm or his clients.

Fallout

The crisis has exposed divisions within González’s own party as her administration works to lure new investors to the island and remedy chronic power outages.

Puerto Rico Senate President Thomas Rivera Schatz called this week for Domenech’s resignation. On Thursday, he offered legislative immunity to Domenech and others if they confess crimes and help eradicate corruption.

The Department of Economic Development and Commerce is responsible for attracting companies, managing incentives and positioning Puerto Rico for new investment. Any perception that contracts, tax incentives or agency appointments are being influenced by political pressure could create a broader problem for an island competing for manufacturing or pharmaceutical projects.

No investigative body has made final findings against either official.

Gonzalez entered office in January 2025. She is a member of the pro-statehood New Progressive Party.