Marine Diver. The San Juan Daily Star. September 4-6, 2015. Self-winding movement. Water-resistant to 300m.

2 September 4-6, 2015 Marine Diver Self-winding movement. Water-resistant to 300m. 18 ct rose gold case. Also available in stainless steel. U LY S S E - N A R D I N. C O M The San Juan Daily Star

GOOD MORNING The San Juan Daily Star, the only paper with 3 September 4-6, 2015 News Service in English in Puerto Rico, publishes 7 days a week, with a Monday, Tuesday, Wednesday and Thursday edi on, along with a Weekend Edi on to cover Friday, Saturday and Sunday. EDITOR S NOTE: So that our employees can enjoy the Labor Day holiday, the STAR will not publish on Monday, Sept. 7. Hillary Clinton to Meet With Governor During Campaign Stop Local Mainland Business Interna onal Viewpoint Entertainment INDEX 3 11 16 20 24 26 No cias en Español Legal No ces Sports Games Horoscope Cartoons 28 33 41 45 46 47 By EVA LLORENS VELEZ La Fortaleza Public Affairs Secretary Jesús Manuel Ortiz said Thursday that Gov. Alejandro García Padilla will be meeting with Democratic presidential hopeful Hillary Rodham Clinton during her visit to Puerto Rico today. The official said the meeting will occur at some point during her visit, but gave no further details. The governor is a member of the Democratic Party and he has been approached by Clinton, Ortiz said. It is possible he may participate in an event with her. Ortiz said La Fortaleza has not been informed as to whether Vice President Joe Biden will visit in November. Biden may also run for president. Clinton will be in Puerto Rico today for a health care roundtable to hear directly from Puerto Ricans about the health care challenges they are facing. Republican hopeful Marco Rubio is also slated to be in Puerto Rico today. According to NBC News, Rubio s campaign advisory said he would rally with supporters at Aire Libre Restaurant in San Juan and share his New American Century vision during his visit. Clinton said in a statement that she wants to see firsthand the impact of the unequal treatment that Puerto Rico patients, doctors and hospitals suffer in federal health care reimbursement policies, and to highlight the need for the United States to provide real support and tools to help Puerto Rico reverse its economic decline and overcome the health care crisis. During the event, to be held at 3:30 p.m. in the Caribbean Cardiovascular Center, Clinton will hear from health care industry and patient representatives from Puerto Rico. Clinton is not the first 2016 candidate to travel to Puerto Rico, as both Republican Jeb Bush and Democrat Martin O Malley have already visited.

4 September 4-6, 2015 The San Juan Daily Star Lawsuit Says Firm s Proposal for Electronic Voting System Was Timely, Could Have Saved Gov t $20 Million By MARIA MIRANDA SIERRA mirandasanjuanstar@gmail.com The State Elections Commission (SEC) has awarded a contract that will allegedly cause the Puerto Rico government to overpay by some $20 million, Smartmatic International Holding officials alleged Thursday. With that assertion, Smartmatic officials are challenging the validity of the contract awarded by the SEC to Dominion Voting Systems for the electronic voting system to be implemented in the 2016 island elections, a contract that was awarded and announced Monday by the SEC. The lawsuit was filed in San Juan Superior Court. Their state-of-the-art elections technology and excellent track record as a reliable and professional vendor will help enhance the voting experience and the overall electoral process in the Commonwealth of Puerto Rico, SEC President Liza García said during Monday s announcement of the awarding of the contract to Dominion. The government insists that Dominion was the only company that submitted a proposal to design and implement the electronic voting system. But Smartmatic Latin America President Luis Vecchi insisted that the government is lying, that his company in fact presented a proposal before the deadline established by the SEC. But the Smartmatic Latin America President Luis Vecchi SEC allegedly did not allow Smartmatic to turn in their its, saying the firm had not met the deadline established by SEC regulations. We arrived on time. They said we had to be there at 1:30, we go there at 12:30. They [the SEC] didn t comply with their own regulations, Vecchi said. The country will be paying for an electronic voting system that costs $20 million more than it should cost. He added that there is no justification for Dominion to be overpricing the system by $20 million and for the SEC to have signed the contract. We do elections all over the world and we are known for our transparency, Vecchi added. In taking the matter to the courts, Smartmatic is requesting that the contract with Dominion be nullified and for a new public auction to take place, since there never was one to begin with. They claim that Dominion was the only company participating in the auction, while over a dozen companies were interested in participating. However, Smartmatic officials said, they are the only ones taking the matter to the courts. We understand that the amount of money the company [Dominion] is charging and which is in the contract is an overpriced amount; that is what we call a one-sided contract, Smartmatic Puerto Rico adviser Jorge Tirado told the STAR. Smartmatic had already exhausted all administrative remedies to challenge the process, and did not prevail in any of them, so they took the matter to the courts, Tirado added. The legal remedy requests a review of the resolution issued by the SEC president, in which she confirms the contract is awarded to Dominion Voting Systems for a total of $38.3 million. The pact was signed Monday with all three political party electoral commissioners and other SEC officials present. Tirado and Vecchi argue that the quote submitted by Dominion is excessive and exceeds the market value of the same equipment and services acquired by the SEC by more than $20 million. They noted that they were never able to formally present their offer for the sale of electronic voting machines for $18 million, with a financing alternative of $21.3 million. In addition, they stressed that Dominion was the only company at the auction, and that under such circumstances the auction should not be declared deserted. Tirado and Vecchi also criticized the SEC president for signing the contract with Dominion without waiting for the 10-day period for Smartmatic to challenge the adjudication in the courts to expire. That period expires today. We understand that, legally, she has the authority to do so, that is the reality, but under normal circumstances, one never does that, Vecchi said. If you grant 10 days, in any country in the world, I have never seen this happen, that someone so recklessly -- for me that is reckless -- signs a $38 million contract, and she has been presented with the proof from all corners that the contract is overpriced, by more than double. He added that information on equipment costs is easy to corroborate. Smartmatic officials said each voting machine system costs between $2,200 and $3,500, and the local government is going to pay close to $6,000 per unit, according to the contractual agreement with Dominion. Meanwhile, SEC president García dismissed the idea of any irregularity in the process and avoided commenting on the lawsuit s allegations, which are being analyzed by the SEC s legal department.

The San Juan Daily Star September 4-6, 2015 5 She insisted that the SEC conducted a rigorous auction process that fully complied with the legislative resolution that authorized the implementation of the electronic ballot, with the requests for proposals process and with the SEC s regulations. She acknowledged, however, that Dominion was the only bidder. The SEC s auction board evaluated the complete process, but so did the technical advisers board, with a representative of each electoral commissioner and one person representing the president, according to the Electoral Law, García said in a TV interview. They evaluated the technical aspects of the proposals, and the financial and economic aspects. On Monday, García announced that Dominion Voting had been selected as the voting system vendor for Puerto Rico, declraring that [e]lection modernization is an important and complex task. Dominion Voting and the SEC entered into a contractual agreement for the provision, delivery, installation, support and maintenance of Dominion s Democracy Suite voting system. According to Dominion, the comprehensive Democracy Suite system [to be used in the local elections] offers several unique features to enhance the voting experience and process in Puerto Rico. Transparency will be improved through the use of AuditMark, an exclusive patented Dominion technology that provides a clear ballot-level audit trail, without compromising the confidentiality of the voter s ballot. This feature not only ensures that voter intent is accurately captured, the company said in a statement Monday, but also provides a platform for ballot adjudication and review should it be necessary. The Democracy Suite system, used widely across the U.S. and Canada, will also allow the SEC to rapidly report unofficial results at the end of Election Day, thanks to the use of secure, encrypted results transmission from the polls to the central SEC office, the company said. The Democracy Suite system purchased by the SEC includes 6,075 ImageCast Precinct tabulators, the world s most widely deployed and reliable optical scan tabulator. The ImageCast Precinct tabulator has been used in harsh environments including high-humidity tropical areas and mountainous deserts. It is a lightweight, compact and robust optical scan tabulator. Smartmatic planned to implement in Puerto Rico -- if it won the public auction process -- an e-tallying system, a technology that has been used in elections in the mainland U.S., Canada, the Philippines and Mongolia and uses optical scanners that capture the vote marked on paper ballots. Smartmatic s idea was to automate the local elections gradually in different stages beginning with a public awareness campaign to educate citizens. Last month, García dismissed Smartmatic s administrative petition to review an appeal in which the company challenged the determination of the SEC s auctioning board. Smartmatic cannot request the [revocation] of a competitive and transparent process which commission officials followed in strict compliance with legal and regulatory standards, reads García s resolution, dated Aug. 14. Doing so without having participated in the bidding process would destabilize the process, order and good faith, which are so indispensable in these processes. Smartmatic stated in its administrative appeal that the SEC should annul its decision to award the bid to Dominion and that a new competitive bidding process, which would garner a better price and comply with other SEC technical requirements, be conducted. García explained at the time that the only proposal received by the auction board was studied, evaluated and awarded with the participation of technical, legal and financial advisers. Proof of this is the $3 million savings obtained in the final stage of the awarding process, García said last month. The auction regulations contain the legal tools to negotiate the request for proposals and correctly award the proposal submitted and under current regulations, García added. That is how the auction board unanimously did it.

6 September 4-6, 2015 The San Juan Daily Star Eight More Drought-Stricken Towns Declared Disaster Areas By MARIA MIRANDA SIERRA mirandasanjuanstar@gmail.com Resident Commissioner Pedro Pierluisi announced Thursday that U.S. Agriculture Secretary Thomas Vilsack has declared an additional eight municipalities in Puerto Rico as natural disaster areas due to ongoing drought conditions. The additional municipalities are Bayamón, Cataño, Dorado, Guaynabo, Juana Díaz, Toa Baja, Vega Baja and Villalba. The new drought declarations follow similar drought disaster declarations for Puerto Rico municipalities made by Vilsack on July 15, Aug. 5, Aug. 12 and Aug. 19. In total, 44 of the island s 78 municipalities have now been declared disaster areas because of drought. Each of the five declarations issued to date were made based on official data indicating eight or more Thomas Vilsack consecutive weeks of prolonged drought conditions taking place in the 44 municipalities. The data is collected and analyzed by the U.S. Department of Agriculture (USDA) using the official U.S. Drought Monitor. As a result of the declarations, farm operators in the 44 municipalities have gained access to specific support from the federal Farm Service Agency (FSA), including access to low-interest emergency loans to help them recover from losses in crops and livestock resulting from the CARPET By drought. The drought continues to remain a challenge in Puerto Rico, despite the recent rainfall we received from tropical storms Danny and Erika, Pierluisi said. Overall, the rainfall we have received to date in 2015 is about 10 inches lower than the annual average, according to National Weather Service (NWS) records. My office is working with the FSA in Puerto Rico to ensure that all authorized assistance is made available to farmers and ranchers affected by the drought, the resident commissioner added We are also working with the FSA to open assistance programs that could help farmers who lost plantains and banana crops last week as a result of Tropical Storm Erika winds. Earlier this year, at the onset of unusual drought conditions, Pierluisi wrote Vilsack to request his close attention to the drought situation in Puerto Rico. In his letter, Pierluisi urged Vilsack to promptly issue disaster declarations for the municipalities most affected by the drought so that additional federal support could be made available directly to farmers and ranchers in Puerto Rico. The 36 municipalities that the USDA had designated natural disaster in previous drought declarations are: Aguas Buenas, Aibonito, Arroyo, Barranquitas, Caguas, Canóvanas, Carolina, Cayey, Ceiba, Cidra, Coamo, Comerío, Corozal, Fajardo, Guayama, Gurabo, Humacao, Juncos, Las Piedras, Loíza, Luquillo, Maunabo, Morovis, Naguabo, Naranjito, Orocovis, Patillas, Río Grande, Salinas, San Juan, San Lorenzo, Santa Isabel, Toa Alta, Trujillo Alto, Vega Alta and Yabucoa. Document Shows Terms in Play in PREPA Debt Restructuring Talks WE ARE YOUR INDOOR ENVIRONMENTAL CLEANING SOLUTION RESIDENTIAL COMMERCIAL INDUSTRIES We Eliminate.. Bad Odors from Your Home (Like tabacco, cigarettes, smoke) Dust Mites is one of ASTHMA sufferers worst enemies!! We Steam Clean Your Matressess and Eliminate Dust Mites (AntiAllergen Treatment Available) We Steam Clean your Furniture and Draperys (Dry in 45 mins.) 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On Sept. 1, certain creditors of PRE- PA, including the Ad Hoc Group of Bondholders and other creditor parties to the Forbearance Agreements, agreed to extend the Forbearance Agreements through Sept. 18 that were initially signed in August 2014. According to the Aug. 5 plan, PREPA made an offer to the monolines to purchase new revenue bonds in an amount equal to refunds for each debt service payment to wrapped bonds. If PREPA obtains financing for major capital improvement plan expenditures previously budgeted to be paid in cash, PREPA would repurchase an agreed-upon amount of refunding bonds upon receipt of such financing, the document says. The Fuel Lines/GDB LOC have three options: A seven-year term out with escalating amortization (i.e., 10 percent per year in fiscal year 2018 to fiscal 2020, 30 percent in fiscal 2021, and 40 percent in fiscal 2022), or an amendment providing for a rollover facility with a 35 percent principal reduction; current interest and principal payments and extension of additional working capital credit to PREPA; or the same treatment as unwrapped bondholders. The proposal is subject to an agreement on the non-economic terms, including governance. The GDB line of credit is assumed to receive the same treatment as the Fuel Lines.

The San Juan Daily Star September 4-6, 2015 7

8 September 4-6, 2015 The San Juan Daily Star Senate Panel Chief May Lean Toward Repeal of Power Subsidies By EVA LLORENS VELEZ The chairman of the House Special Committee for a New Energy Policy, Jesús Santa Rodríguez, who is evaluating Senate legislation that seeks to end some electric-power subsidies, said Thursday that an increase in Puerto Rico Electric Power Authority (PREPA) rates is not being currently considered and appeared to support the repeal of subsidies. Santa Rodríguez has been receiving recommendations from various witnesses during public hearings on Senate Bill 1256. PREPA reached an agreement Wednesday with a group of its creditors, the Ad Hoc Group, to restructure its $9 billion debt through a 15 percent reduction of the capital, a five-year payment extension and savings of more than $700 million. It is necessary to know whether the percentage PRE- PA charges to the rest of its consumers to cover subsidies is enough, without having to continue bleeding the country s general fund, Santa Rodríguez said. Santa Rodríguez said the legislative process in the House is taking place in tandem with PREPA s debt restructuring. We are, more or less, on the same road, he said. We are looking for PREPA to be more efficient; in this case, in the granting of subsidies. That the authority, with the 11 Ángel Figueroa percent paid by each subscriber, can subsidize this expense, that it be more efficient and be better supervised. Currently, subscribers who do not receive subsidies, credits or special rates pay an 11 percent fee included in their bills to cover those costs. In the case of subsidies granted to hotels, these are conditional; they have to be current on their payments and credits granted to the industry in compliance with tax responsibilities, but PREPA has not established a process to audit the granting and use of other subsidies, nor does it make them conditional on complying with the requisites, such as being up-to-date with payments, Santa Rodríguez said. During the hearing it was revealed that subscribers who live in public housing and receive subsidies are not paying for electricity despite having a fixed, preferential rate. The president of the Irrigation & Electrical Workers Union (UTIER by its Spanish acronym), Ángel Figueroa, supported the bill, saying it is necessary due to the financial situation of the public corporation. The UTIER president said existing subsidies should be reduced only for those with a social purpose, and that additional subsidies should not be granted. It was also revealed in the hearing that the consumption of many customers with subsidies has increased, in contrast to residential customers who are not subsidized and who have reduced their power consumption by 7 percent. It was also said that 89 percent of customers who request payment options for their electricity bills do not pay on time. Meanwhile, Gustavo Marín, of the Puerto Rico Aqueduct and Sewer Authority (PRASA) supported the adoption of the measure, with amendments. He said in his testimony that there are 54,000 active PRASA clients, compared to 46,000 active PREPA accounts, which raised the question of whether the 8,000-user difference exists because it represents those connected to the power grid that do not pay for the service. La Fortaleza Keeps Mum on Rate Hike, Says PREPA Has Free Rein in Debt Talks By EVA LlORENS VELEZ Public Affairs Secretary Jesús Manuel Ortiz said the governor will continue to give the Puerto Rico Electric Power Authority (PREPA) free rein in its restructuring talks but did not say if it will support a hike in power rates needed to bring the public corporation to sustainability. US TREASURY DEPARTMENT VEHICLE AUCTION Bid Online 9/9 through 9/16 04 Mazda RX8, 97 BMW 328i, 04 Toyota 4 Runner 04 Toyota 4 Runner SRS Sport Preview: Mon 9/14 from 9-12 at Polluelo Auto Corp, Aibonito: Additional vehicles at other locations www.cwsmarketing.com 855-463-3183 We have given them all the space they need without intervening, Ortiz said. All we want is for them to negotiate a deal that is good for the public corporation and the infrastructure. Ortiz said a proposed rate hike was not part of the negotiations. However, it is part of PREPA s recovery plan to put the utility on a sustainable path. We have to wait, Ortiz said. We support that they continue the path they are taking. Unions Back Limiting PrepaNet as Telecom Provider Meanwhile, telecommunication workers descended on the Capitol to lobby in favor of bill that would put the brakes on PrepaNet s attempts to compete with private telecommunication providers. The bill s author, Sen. Ramón Luis Nieves, says the Law for Fair Competition in Telecommunications Services, Information and Paid TV in Puerto Rico will allow PrepaNet to sell its service wholesale but that because it is subsidized by a public corporation, PREPA, it should not compete with private providers. PrepaNet was founded in 2004 to commercialize the excess capacity of PREPA s fiber-optic network, which runs atop its power system. PrepaNet sends dividends to its parent company, but otherwise operates independently. Sources say that as part of the restructuring, PRE- PA may have to sell ownership of PrepaNet. The PREPA fiber-optic network is the most robust in Puerto Rico and is the only one with connections to Vieques and Culebra. The core network has sufficient capacity for the next 25 years and can reach hospitals, universities, medical facilities, government offices, office centers and other facilities demanding high-tech communication connections. This creates a boundary telling PrepaNet, you operate up to here, Nieves said. PrepaNet has spent the people s money that is paid through [electricity] bills. PREPA has invested $33 million in the construction of a building in Isla Verde and in the lease of office space in Hato Rey for PrepaNet executives, Nieves said. Telecommunication workers say an executive order signed by the governor will reorganize the structure and that includes having PrepaNet offer services to public corporations. In that sense, they believe that public agencies will receive Internet services from PrepaNet and cancel contracts from private companies. Meanwhile, the president of the Independent Union of Telephone Workers, Edward Sánchez, said the union will keep lobbying for Nieves measure. They are putting more than 2,000 jobs at risk, he said. They are hurting Claro, which is the only company hiring.