A billion-dollar emergency loan approved by Congress to help Puerto Rico’s ongoing recovery efforts is being withheld by U.S. officials who say Puerto Rico is not strapped for cash. (Puerto Rico is still strapped for cash.)

In a letter first published on Wednesday by El Nuevo Dia, FEMA and U.S. Treasury officials told the director of Puerto Rico’s fiscal agency that the U.S. territory has a cash balance over $1.5 billion and that, essentially, the island has no need for a $1 billion emergency loan that’s already been approved by Congress. Only when the central cash balance goes down to a level decided upon by the federal government will they release the funds, they said.

“Because the Commonwealth’s central cash balance, as publicly reported, has consistently exceeded $1.5 billion in the months following [Hurricane Maria]…the Federal Government will institute, as a matter of policy, a Cash Balance Policy,” officials wrote. “Funds will be provided through the CDL Program when the Commonwealth’s central cash balance decreases to a certain level.”

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As Bloomberg noted, Puerto Rico did have billions in its accounts as of late 2017, but most of the money was set aside “for specific uses,” keeping officials from tapping into it. So, in the opinion U.S. officials at least, storm-ravaged Puerto Rico has too much cash to get a loan.



According to the letter, Puerto Rico's 78 municipalities can still apply for loans separately, but just weeks ago the federal control board overseeing the island's finances rejected legislation that would have produced $100 million in emergency funds for municipalities.

Puerto Rican officials have warned in recent weeks that the country’s water and power companies will run out of money at the end of this month. And at this point, 40 percent of the island is still without power.

Gerardo Portela, director of the island's Fiscal Agency and Financial Advisory Authority, said in a statement Wednesday that he is urging federal officials to finalize the terms and conditions necessary to distribute the federal funds. He added that the delay forces local officials to loan money to Puerto Rico's power, water, sewer, and companies.

"These public corporations are facing severe liquidity problems that threaten essential services to the people of Puerto Rico if their operations are interrupted for lack of immediate action," he said.

Puerto Rico Rep. Luis Vega Ramos called the decision to withhold funds unacceptable. "The administration of President Donald Trump, through FEMA, is extorting the people of Puerto Rico and our government so that it submits itself even further to the federal control board and new austerity measures," he told the Associated Press.

Nick Pachelli Nick Pachelli is a writer and editor in New York.

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