Reps. Donovan, Sinema sponsor bill that supports audits of disaster relief contracts

Reps. Dan Donovan (R-NY) and Kyrsten Sinema (D-AZ) have co-sponsored legislation that says federal disaster relief contractors cannot shield expenses from audits.

The Taking Responsibility by Accounting for Corruption and Excess (TRACE) Act (H.R. 4462) prohibits the Federal Emergency Management Agency (FEMA) from reimbursing disaster relief contractors if the contracts prohibit government audits and reviews.

It stems, in part, from a $300 million contract awarded to Whitefish Energy to restore power on Puerto Rico after Hurricane Maria hit in September.

Whitefish Energy’s contract included a passage that said, “in no event shall [government entities] have the right to audit or review the cost and profit elements.”

The hiring faced harsh scrutiny and the contract was ultimately canceled. However, Whitefish continues to do work in Puerto Rico and seeks $83 million in payments from the Puerto Rico Electric Power Authority (PREPA).

Approximately half of Puerto Rico remains without power more than two months after the storm.

“It’s mind-boggling that a contract payable with taxpayer dollars could so brazenly stipulate ‘audits not allowed.’ Emergency spending after a disaster is chaotic and sometimes difficult to track, as New Yorkers know all too well after Sandy and 9/11,” Donovan said. “But whenever public funds are spent, auditors need to account for the money and defend against corruption. Our legislation rightfully prohibits ‘no-audit’ contracts.”

Sinema called it outrageous that contractors would try to shield themselves from government oversight.

“Hardworking Arizona families have a right to see how their tax dollars are being spent,” Sinema said. “The TRACE Act is a commonsense fix that brings much needed transparency and accountability to disaster relief contracts, ensuring that funds are spent appropriately to help American families and small businesses recover from natural disasters.”