The contractual relationship that the Department of the Treasury set with OPG Technology to establish and operate a system of stamps and vouchers included a compensation system that, for years, would have been contrary to the provisions of law and contained other clauses that would render that agreement "null and unenforceable".
The analysis of these contractual terms is included in a legal opinion of the Department of Justice issued in 2014, which examines the provisions of the agreement that were in force between 2010 and 2015.
According to an opinion signed by the Acting Secretary of Justice, Rafael Ortiz Carrión, given that the contract would be null, the Treasury should revoke it, stop payments to OPG and even recover what would have already been paid without a legal framework.
Despite this opinion, in March 2017, the Secretary of the Treasury Raúl Maldonado Gautier - who was now reappointed to the same role - signed a new contract with OPG that had a similar compensation structure to that questioned by the Department of Justice, granted the contractor better financial terms and even facilitated the use of internal technology that the Treasury developed with public funds by 2015.
In addition, the new contract with OPG comes at a time when collections for the sale of stamps and vouchers have dropped by almost 73 percent between fiscal years 2007 and 2018.
El Nuevo Día requested information from the Department of Treasury regarding the reasons for the drop in stamps and vouchers, but, by press time, there was no answer nor did they say if Secretary Maldonado Gautier knew about the 2014 legal opinion.
According to the opinion issued by the department of Justice on January 10, 2014, multiple amendments made to the OPG Technology contract after 2008, resulted in an agreement contrary to the provisions of at least three statutes.
According to the Department of Justice, the OPG contract would be contrary to Law 331-1999 - which states that the hiring and payment of stamps and vouchers will be carried out by an authorized agent - Law 233-2003 - which establishes what the Secretary of the Treasury may charge in certain transactions - and Law 237-2004 - which governs the processes of contracting services by the government.
The opinion signed by Ortiz Carrión states that since the contract evaluated was contrary to legal provisions, they concluded that it was illegal and, therefore, null and unenforceable.
The document adds that consequently, not only it should not proceed to make any payment under that contract since that would imply making an illegal disbursement of public funds, but in addition, the document states, if money was incorrectly paid under the null agreement, the Department of the Treasury has the right to recover it.
Last week, El Nuevo Día revealed the content of the legal opinion signed by Ortiz Carrión when this newspaper reported that difficulties to examine and oversee the agreement with Orlin Goble's company, among other situations, was one of the reasons leading certified public accountant Teresita Fuentes Marimón to abruptly resign her position at the Department of Treasury a week ago.
Although the legal opinion dates from January 2014, its content seems to be still valid.
On one hand, before and after the opinion issued by the Department of Justice on the subject, the Treasury maintained a contractual relationship that Justice ruled as "null".
On the other hand, the contract signed in March 2017 and examined by El Nuevo Día includes certain terms that, although with changes, maintain the compensation structure that, for the Department of Justice, is contrary to the provisions of law.
The legal opinion was the answer to a request made former secretary of the Treasury Melba Acosta Febo.
“Partners” for a decade
According to information reviewed by El Nuevo Día, the contractual relationship between the Treasury and OPG began in November 2007, when lawyer and public accountant Juan Carlos Méndez chaired the Puerto Rican Treasury.
Between fiscal years 2008 and 2012, according to the documents examined by this newspaper and the Contracts Registry of the Office of the Comptroller, the agreement between the Treasury and OPG, which is identified as "a Sales Agency Agreement", was amended at least six times. The contract was extended until June 2015.
The agreement signed in March 2017 by then –Treasury Secretary Maldonado Gautier and OPG runs through 2027.
According to sources, between 2014 and 2015, the contractual relationship between the Treasury and OPG suffered setbacks after multiple attempts to audit the company's operations proved unsuccessful.
In short, sources say Acosta Febo and later also former secretary Juan Zaragoza, were concerned that the Treasury could not independently oversee the volume of sales of internal-revenue stamps and vouchers. Fuentes Marimón shared that concern before leaving office.
The Treasury must oversee agreements with agents for the sale of stamps and vouchers via the Internet under regulation 59 of that agency. Among other aspects, this regulation states that the authorized agent must submit financial statements to the Treasury, keep records of all transactions, custody these records in a vault and in Section 6 it indicates that the agent will be subject to periodic audits by the secretary (of the Treasury) without prior notice.
However, according to sources, OPG did not provide the information required by the Treasury, a fact that Goble's company has denied in media interviews.
By 2015, when the agreement with OPG was coming to an end, the Treasury saw it feasible to internally operate the system of stamps and vouchers. According to what this newspaper reported during the weekend, RSM company was awarded the bid and this required an investment of over $ 500,000.
Also according to sources, although the owner of OPG has allegedly been a donor of the New Progressive Party (PNP), between 2013 and 2016, when Acosta Febo and Zaragoza chaired the Treasury, both officials received requests from legislators of the Popular Democratic Party (PPD) to advocate for OPG.
Similarly, sources said that although Justice urged the Treasury to cancel the contract, it was not possible. This, because once the Treasury hired OPG for the sale of stamps and vouchers, the agency dismantled of all its internal processes to handle such transactions.
The Treasury implemented and internal solution that lasted barely 10 months, because with the new administration when Maldonado Gautier was appointed the Treasury, OPG signed a new contract.
Against the law
The most critical issues in the 2014 opinion of the Department of Justice regarding the OPG contract point to collections management and compensation.
According to Justice, the contract established that the company would send the collections of stamps and vouchers to the Treasury on daily basis, but this was changed to weekly transfers, so that these collections remained outside the oversight of the Secretary of the Treasury.
In addition, according to the document, when the contract was amended in 2011, instead of the company charging citizens and companies a service charge, they agreed that the Treasury would pay OPG a commission according to the volume of sales on stamps and vouchers.
The language of the contract detailed in the legal opinion stated that OPG would start charging a 9 percent commission and it would be reduced to 3 percent when the sales exceeded $ 104 million. Besides, the agreement established that in addition to what OPG would charge, banks, cooperatives and any other sales point, except for collection offices, would keep another 2.5 percent of the sale of stamps and vouchers. Both charges - OPG and banks or points of sale - would total a minimum of 5.5 percent.
Through this scheme, instead of the Treasury receiving the full amount of the sale of stamps and vouchers, the agency began to pay OPG and banks and cooperatives for their services, reducing revenues to the Treasury. This, according to Justice, despite the fact that part of the collections of stamps and vouchers have established uses. That would be the case of the mechanization fund of the Land Registry.
The opinion stresses that amendments introduced to the contract result in a payment method that Law 11 does not recognize or authorize.
Likewise, Law 233 that rules the Treasury charges for certain transactions establishes that the agency can not impose a service charge over 5 percent.
The contract signed between OPG and the Treasury in March 2017, establishes that OPG and banks or cooperatives charges should not exceed 5 percent of the sales of stamps and vouchers, but the structure of staged compensation prevails. The new commission for OPG is 3.6 percent.