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Person of the Year

Private Sector: Alfredo Volckers, Executive Vice President, Pavia Health; Public Sector: Manuel Diaz Saldaña, Puerto Rico Comptroller


December 23, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

Person of the Year Private Sector

Alfredo Volckers, Santurce native, strives for equality under Medicare and makes Pavia synonymous with quality healthcare in Puerto Rico


Alfredo Volckers, the 2004 CARIBBEAN BUSINESS person of the year in the private sector, has been one of the most outspoken voices and leaders when it comes to fighting for equal treatment for Puerto Rico regarding federal Medicare funding, and constantly strives to achieve justice for patients of Puerto Rico’s health system.

Volckers is one of the people responsible for turning what was once a single Pavia Hospital in Santurce into Pavia Health, a health care system comprising four hospitals in Santurce, Hato Rey, Mayaguez, and Fajardo. Pavia Health hospitals have a total of 700 beds.

Volckers also has been active on other fronts in the medical industry during the past years. He was a fierce advocate for the prompt-payment law that required health insurers to pay claims within an acceptable time frame. He also called on the Puerto Rico government to offer incentives to local hospitals, arguing that they are key components of the local economy.

As executive vice president of Pavia Health and president-elect of the Puerto Rico Hospitals Association (PRHA), Volckers is highly respected inside and outside the health industry.

Fighting for equality in Medicare reimbursements

Volckers’ name seems to pop up in everything and anything regarding Medicare in Puerto Rico. Medicare covers more than 600,000 beneficiaries on the island, most of them elderly, over 65 years of age, or people with disabilities.

Among the issues Volckers has promoted for this sector are increasing federal Medicare reimbursements for hospitals to 100%, and urging the federal government to make Puerto Rico a separate region for Medicare Advantage purposes.

Workers in Puerto Rico and their employers pay the same federal Medicare payroll tax as people living on the U.S. mainland, and senior citizens in Puerto Rico pay the same deductibles and co-payments. The problem for hospitals in Puerto Rico is that they are paid substantially less than hospitals on the U.S. mainland because the Medicare law requires that payments to hospitals in Puerto Rico be made according to a different formula.

"[Local hospitals in Puerto Rico] are losing $74 on every one of the elderly Medicare patients in Puerto Rico," said Volckers. "That translates into a net loss annually by member hospitals of $10 million. This means it will be difficult to improve patient services, raise salaries, and improve equipment," Volckers pointed out (CB Oct. 16, 2003).

"We feel very strongly that we should receive a 100% reimbursement from Medicare as citizens do in the States because, basically, it is a question of civil rights and equality. Puerto Rico residents shouldn’t be treated differently from other Americans, in part because Puerto Ricans pay the same Medicare tax as do residents of the rest of the nation. Medicare recipients in Puerto Rico aren’t receiving the same benefits as their counterparts in the U.S. They aren’t receiving equal treatment," continued Volckers.

Shortly afterward, in December 2003, Congress finally decided to increase reimbursements to local hospitals, but not to the desired 100%. Reimbursements to local hospitals were increased to 75% in October 2004, but the health industry has continued to push for 100% reimbursement.

Volckers pointed out that if the 100% formula were being applied to Puerto Rico, PRHA-member institutions "would be receiving approximately $316 for every Medicare patient [given the current 137,000 patients discharged every year], which would translate into approximately $43 million more annually for the hospitals to improve their financial situation."

The payments for Medicare benefits are made by the Center for Medicaid & Medicare Services (CMS) of the U.S. Department of Health & Human Services (HHS).

Volckers modestly attributed the increase in reimbursements to the hard work of his peers at the PRHA and in Congress, but emphasized the battle won’t have been completely won until 100% reimbursements are obtained.

Medicare Advantage regions come into play

Volckers was also among the first to sound the alarm when the federal government evaluated integrating Puerto Rico into the Florida region for purposes of Medicare Advantage, and stressed the importance of making Puerto Rico a stand-alone region. This move would have allowed stateside health insurers not familiar with the local market to compete with local participating insurers.

Thanks to the hard work of Volckers and others, CMS and HHS decided to make Puerto Rico a stand-alone region.

Medicare Advantage, known until recently as Medicare Plus Choice, includes more preventive services, prescription benefits, and waivers on deductibles than traditional Medicare coverage.

The idea of integrating Puerto Rico into a region composed of one or more mainland states, said Volckers, wouldn’t have achieved more cost-efficient operations, as was the objective. Volckers had cited linguistic abilities as only 15.6% of Puerto Rico’s elderly population can speak English. He stresses that Medicare beneficiaries in Puerto Rico need to be served through plans that are culturally and linguistically competent, which isn’t likely with plans accustomed to operating in the 50 states and Washington, D.C. Secretary of Health Johnny Rullan and former resident commissioner and gubernatorial candidate Anibal Acevedo Vila also voiced their concerns to the CMS.

SSI: The next battle for Medicare funds

Now, Volckers is getting ready for another Medicare battle. He said there is a provision within the Medicare Modernization Act of 2003 called Supplemental Security Income (SSI) that will greatly benefit hospitals that treat low-income patients. According to estimates, local hospitals could obtain from $100 million to $400 million per year if they were included in the provision.

"I would say that about 90% of PRHA’s member hospitals qualify for SSI," said Volckers. The big problem, he added, is that Puerto Rico has been left out. Because of this, about 30 hospitals belonging to the PRHA have filed lawsuits against the CMS. In the meantime, the organization is also redoubling efforts in Congress to amend the law, and make Puerto Rico eligible for SSI payments.

Medicare pays hospitals what it calls Disproportionate Share Hospital Payments (DSH) to cover treatment given to low-income patients eligible for Medicaid. These DSH payments are based on each hospital’s SSI-eligible patients. However, since Puerto Rico is not eligible for SSI, its DSH payments are but a very small fraction of what they would be if people in Puerto Rico were eligible for SSI.

Currently, Puerto Rico hospitals do receive DSH payments, but payments are based on the number of patients whose main residence is in the U.S., thus making them eligible for SSI payments.

Volckers makes Pavia a household name synonymous with health

Volckers could very well be considered one of the people who made Pavia Health what it is today. He was born in Pavia’s Santurce hospital and, when he was 39 years old, he came back to the hospital as administrator and executive director.

"When I joined Pavia, its owners wanted to sell the hospital in Santurce (the only Pavia hospital at the time), and employee morale was low because of the uncertainty this created. Also, the physical facilities were deteriorating," remembered Volckers. That hospital had begun operations in 1926.

The first thing Volckers did to turn things around was "to win the trust of our staff and medical faculty to raise their morale," he explained. Back then, he said, he used to work from 14 to 16 hours a day to set an example for his team. "That’s how I spent my first two years at Pavia, working long hours and getting to know everyone at every level in the hospital."

Then, he made some changes at the executive level to make sure everyone was in synch with his objectives. This is when he hired three of his most talented colleagues, all of whom are working with him to this day. "I hired three excellent colleagues who had previously worked with me in other hospitals. They are Catina Santos, now Pavia Santurce’s administrator; Rafael Ortiz, director of Pavia Health; and Ivelisse Torres, director of the Cancer Center and long-term, acute-care divisions.

Simultaneously, Volckers was implementing strategies that would help the hospital achieve cost-efficiency and boost profits. "I changed the whole hospital around. The departments that didn’t produce revenues, such as administrative offices, I moved outside of the hospital’s building, into adjacent houses we had purchased. The spaces left vacant were then converted into profitable areas. For instance, the administrative offices became an emergency room and the conference room became a catheter lab."

Not long afterward, Pavia began purchasing other hospitals and expanding aggressively. "In 1989, we purchased San Jorge’s [Children’s Hospital], right here in Santurce," Volckers explained. "We had a small pediatrics department in Pavia, but we eliminated it and turned San Jorge, a small hospital at the time, into a full-fledged pediatrics hospital." San Jorge now has more than 125 beds and is Puerto Rico’s 35th-largest hospital.

Volckers also brought in former Gov. Pedro Rossello who, prior to entering politics, was a renowned pediatric surgeon, as San Jorge’s medical director. "Rossello helped me recruit the best pediatricians and developed San Jorge’s medical staff," said Volckers. He admitted he likes to pamper his medical staff and bring in the best physicians, since the best doctors bring in more patients.

In 1994, a family member of the owner of the Perea Hospital in Mayaguez offered to sell the medical facility to Pavia. After the sale closed, Volckers immediately began improving the hospital’s facilities and getting to know the staff, just as he had done when he joined Pavia in Santurce. "I became very fond of this hospital. The staff was very cooperative from the start. They are a great team," he said.

Shortly afterward, Volckers was offered another deal. This time, the owners of Fajardo’s Gubern Hospital wanted to sell and Pavia gladly bought the institution. "We knew this hospital had great potential," said Volckers.

In the late 1990s, Pavia purchased Hato Rey Community Hospital and Volckers immediately began working with his team to transform it into a quality healthcare facility.

In an effort to continue growing, Pavia Health, the hospitals’ holding company, was created. Meanwhile, Volckers had his sights set on purchasing Ponce’s Damas Hospital, as well as expanding Pavia Health’s reach outside the island. "We even considered buying hospitals in Central America," he said.

Unfortunately, Volckers’ need for complex surgery put a damper on the big plans he had for the company. In 1998, he underwent open-heart quadruple bypass surgery.

Volckers’ operation was successful and it didn’t take long before he was back to work. Although plans to turn Pavia into a household name in other countries have been temporarily put on hold, he has continued helping Pavia Health grow in Puerto Rico. In fact, the company is currently in expansion mode, investing $65 million in new, state-of-the-art medical facilities.

Perea Hospital is getting 20 more beds in the acute-care division and another 20 beds in the psychiatry unit. It will also open four new operating rooms. San Jorge Children’s Hospital is adding an emergency room, a pediatric acute-care center with 17 beds, and a multilevel parking lot with 500 spaces.

Pavia Hospital in Santurce also will get a new emergency room and a 500-car parking facility. Finally, Pavia in Hato Rey is developing a cancer treatment center, adding 40 beds to the psychiatry unit, and building a new emergency room and a multilevel parking lot with 250 spaces.

Volckers’ lesson in life: Success comes to those who enjoy the journey

The first big challenge of Alfredo Volckers’ life was waiting for him when he was born on July 1, 1945 at Pavia Hospital in Santurce. "My father passed away the day before my mother gave birth to me," explained Volckers. "While my mother was being taken to Pavia to give birth, my father was being taken to another hospital.

"However, I have always believed everything in life happens for a reason," Volckers continued. "Life blessed me with a great family. My mother and grandparents brought me up in Cataño. So, instead of having one dad, I ended up having many father figures, among them my grandfather and my uncles. My biggest problem then was that my family spoiled me too much," he joked.

Volckers lived in Cataño until he was 13 and was studying at San Vicente de Ferrer School, where his grandmother was a teacher. "I had a great time in school and enjoyed life to the fullest," he said. He also remembered his house was one of the first in the area to have a television set, so the neighbors converted the house into a meeting place where everyone would watch the "El Indio" (The Indian) series on television and chat.

Besides going to school, Volckers also worked with this grandfather. "I have been working ever since I was four or five years old. My grandfather, besides being the treasurer for the ‘La Popular’ ferries, also had an office at the old Euclides Hotel, where I would help carry bags. I learned from my grandparents the value of hard work and honesty," he recalled.

"The other thing I learned from them was to focus on the details," explained Volckers. "When I worked with my grandfather, by the time it was four or five in the afternoon, I would tell him I finished everything and had nothing else to do. He would get mad and start pointing out all the things that needed to be done, like dusting and cleaning. This taught me to be critical of my own job and to always keep busy."

When Volckers was 13 years old, his grandfather passed away and he moved with his grandmother to Dos Pinos, near the University of Puerto Rico (UPR). He attended San Jose, an all-boys private school in Rio Piedras. After graduation, he enrolled at the UPR’s business school and completed a bachelor’s degree in commercial administration with a major in management.

By the time he was 21, Volckers was a banker at Ponce Savings & Credit Bank, which later was absorbed by Banco Popular. "I was in charge of opening their branch in El Monte Mall," he said. "That job taught me to think out of the box to get things done."

The desire to go back to school helped him obtain a federal scholarship, with which he obtained a master’s degree in hospital administration at the UPR medical school. "I had been interested in a career in hospitals ever since I used to play sports in Auxilio Mutuo Hospital’s lawn during my college years," Volckers recalled. By the time graduation came along, he already had married a fellow student.

Upon graduation, Volckers went to work at the medical school, evaluating ways to develop a health plan for the students and professors of the entire UPR system. He also developed a small ambulatory center where students and professors could get check-ups and where medical residents could practice their craft.

Then, he became Auxilio Mutuo’s associate administrator, where he was in charge of personnel. "I had no idea about how to do this, so I went back to school again to take courses," said Volckers. He passed the test, negotiating with workers’ unions and obtaining positive results.

Later on, he worked at the Teacher’s Association, where he dealt directly with the organization’s health plan. "I would visit physicians all over the island to try and integrate them into the health plan’s provider network. I also counseled teachers on how the plan worked and what it offered them.

"Columbia University in New York then admitted me into its public health doctoral program. I almost finished, but I just couldn’t stand living in New York anymore and came back to Puerto Rico," Volckers explained, adding that he did complete his board exams and fulfilled credit requirements. "All that was left for me to do was to finish my final thesis."

Once back in Puerto Rico, Volckers became deputy vice president of health plans at Cooperativa de Seguros de Vida (Cosvi), where he continued developing provider networks.

Volckers’ last post before arriving at Pavia was at San Pablo in Bayamon, where he also dealt with health plan development. He even went to Chicago to take extra courses on the subject. Although he couldn’t reach an agreement with hospital physicians to implement the health plan, he was able to develop a family medical center there.

Volckers is optimistic about the trials and tribulations that life may bring. "I have been successful because I have always had excellent bosses supporting me. I have learned that if you stay positive and visualize what you want out of life, you will get it," he said.

Person of the Year Public Sector

Manuel Diaz Saldaña, his work ethic, leadership, and organizational skills add value to the Comptroller’s Office as the main promoter of sound use of public funds in all areas of government


The image of the Comptroller’s Office—the government entity that supervises the transactions and use of public funds and property—as an efficient, organized, professional, high-tech, and service-oriented government agency didn’t just happen.

Since becoming Comptroller of Puerto Rico seven years ago, Manuel Diaz Saldaña—a firm believer in the Total Quality Management (TQM) philosophy, and that one should set the example—set out to make the Comptroller’s Office a model of efficiency, professionalism, and dedication to public service, one other government agencies could follow.

The strategic development plan that Diaz Saldaña implemented in both the Puerto Rico Treasury Department, and the Comptroller’s Office are used today as models for local public administration.

His impeccable work ethic, moral values, and organizational and leadership skills have added value to the Comptroller’s Office, taking it to a whole new level as the main promoter of sound use of public funds in all areas of government. His impartial, nonpolitical style and honesty has also been highly regarded by all.

Throughout his professional career, in both private and public sectors, Diaz Saldaña has received numerous recognitions from government and civic and professional organizations for his distinguished public service.

At the core of Diaz Saldaña’s success in government, first as Treasury secretary and later as comptroller, is a dynamic team of dedicated professionals in public service, led by the man himself.

Diaz Saldaña’s successful past experience in the private sector as a certified public accountant (CPA) and certified fraud examiner (CFE), as well as his organizational and leadership skills, helped him excel in public service as well, first as secretary of the Puerto Rico Treasury Department, from 1993 to 1997, and as comptroller immediately thereafter. His 10-year term as comptroller expires Oct. 2, 2007.

His current and past achievements have earned him the distinction of being voted CARIBBEAN BUSINESS Public Sector Person of the Year for 2004.

From CPA to Treasury secretary

After obtaining his license as a certified public accountant (CPA) in 1974, Diaz Saldaña worked in the private sector, as an auditor for several public accounting companies, such as Arthur Anderson, and Peat Marwick, Mitchell & Co. In 1978, in collaboration with fellow CPA Alfredo Rivera Marrero, he established the CPA firm of Diaz Saldaña, Rivera Marrero & Co.

In 1993, Diaz Saldaña embarked on what became a fruitful career in government, when then-Gov. Pedro Rossello appointed him secretary of the Treasury Department (Hacienda). There, Diaz Saldaña led the 1994 Tax Reform, approved unanimously by the legislative assembly, reducing income tax rates across the board. The measure reduced individual income taxes by 19%, and increased tax collections by 39%. It also reduced individual tax evasion from 26% to 18%.

During his tenure as Treasury secretary, Diaz Saldaña developed a Strategic Plan for Puerto Rico, a detailed vision for the island’s future. The plan included modernizing the agency’s technological infrastructure; a far-reaching restructuring of Hacienda’s tax processes and systems and development of a Taxpayer’s Bill of Rights, to ensure that the tax process would be efficient and fair to taxpayers.

Diaz Saldaña’s Strategic Plan for Puerto Rico also included implementing in Hacienda the Total Quality Management philosophy, which focuses on excellence in service and enforcing anticorruption initiatives; expanding Hacienda’s facilities through construction of a much-needed new parking structure and remodeling of the main structure, the Intendente Ramirez Building. The plan called for implementing mechanisms that would provide taxpayers with information, such as the information hotline dubbed Telehacienda, and an agency website.

In the five-year span between 1993 and 1997, Diaz Saldaña served as chairman of several government agency boards, including the Government Development Bank for Puerto Rico. In addition to all his responsibilities, in 1996, Diaz Saldaña took on the task of supervising and coordinating the privatization of government services and companies, aimed at improving the quality of service provided to the people of Puerto Rico.

In October 1997, Diaz Saldaña was asked by Gov. Rossello to take on a much bigger and more challenging task, appointing him comptroller of Puerto Rico.

Out of the frying pan and into the fire

"At my swearing in as comptroller of Puerto Rico on Oct. 2, 1997, my brother, who read my profile, said I had jumped out of the frying pan [Puerto Rico Treasury Department] into the fire [Puerto Rico Comptroller’s Office], and he said it very well," Diaz Saldaña conceded. "The comptroller’s seat is definitely much hotter and controversial than that of the Treasury secretary."

Undaunted by the challenge, Diaz Saldaña rolled up his sleeves and got to work.

Since Diaz Saldaña’s arrival at the Comptroller’s Office, municipal government compliance with annual financial reports requirements have increased substantially, jumping from only one municipality complying as required in fiscal 1997 to all 78 municipalities doing the same in fiscal 2004. This was achieved through an annual awards recognition program established by Diaz Saldaña. This full compliance, in turn, helped to improve the financial state of the municipalities.

In fiscal 1997, 43 out of the 78 municipalities had budget deficits, while 35 showed a surplus. That has since improved in FY 2004, with 26 municipalities in the red, and 52 with a surplus. This represents a deficit reduction of $49.4 million, and a surplus of $65 million between fiscal years 1997 and 2003.

Meanwhile, the number of audit reports issued by the Comptroller’s Office more than doubled, from 93 in FY 1997 to 200 in FY 2004.

Diaz Saldaña’s Zero Tolerance for Corruption Plan of 2000 is 53.8% implemented, mostly in the legislative branch. This plan basically gives politicians a recipe to prevent corruption, Diaz Saldaña said.

A strong supporter of using technology in government, Diaz Saldaña established a policy in the Comptroller’s Office aimed at digitalizing all documents and reducing paper use by 90%. All work done by the agency, as well as a registry and a file of every government contract, is posted on the Comptroller’s Office website:

As an added value from the Comptroller’s Office, Diaz Saldaña and his staff began a series of special reports to further improve government services.

The reports cover subjects such as the use of public funds and properties for political purposes, based on findings in audit reports issued by his office between FY 1989 and 1998; as well as an evaluation of the effectiveness of the sections that make up the Property Registry of Puerto Rico; and a study of layoffs, transfers, other duties, and disciplinary actions taken against officials and employees of municipalities, public corporations, and the central government.

Other topics covered include operations of the Puerto Rico Aqueduct & Sewer Authority and the water filtration and wastewater plants; the handling of public documents in central agencies and municipalities; and many more.

The Comptroller’s Office

Created by the Puerto Rico Constitution to operate independently under the legislative branch, the Comptroller’s Office is the government entity that supervises public funds and property transactions in an independent and objective manner to determine whether they comply with the law. Its job is to conduct periodic audits of all revenue, accounts, and disbursements by every sector of the Puerto Rico government: agencies, public corporations, judicial and legislative branches, and municipalities.

Through its audits, the Comptroller’s Office determines whether the audited government bodies followed the laws and regulations, issues reports on audit findings, points out errors, irregularities, or violations of the laws and regulations.

The Comptroller’s Office also recommends corrective measures. Violations are referred to the Government Ethics Office, and state or federal justice departments. If the violation involves the head of an agency, a mayor, or a high-ranking government official, the case is referred to a Special Independent Counsel, designated by the secretary of Justice.

The comptroller is appointed for a 10-year period.

It’s all about teamwork

For Diaz Saldaña, the main reason he has stood out as comptroller has a lot to do with having a competent group of employees working as a team.

"In this office, in this organization, I represent a team of people who I work with every day, who are responsible for getting things done here," Saldaña said, adding that "everyone has learned to be part of the team, and to strive to make sure our organization meets its institutional mission and all the objectives we have been implementing throughout these years."

Comptroller’s Office employees are very hardworking, responsible, and dedicated, and are very aware that they are in a position that allows them to look into the workings of other government entities, and they must be an example to others, Diaz Saldaña said. He added that the Comptroller’s Office must also serve as an agent of change, along with the private sector, to promote the honest and efficient use of government resources for the benefit of all.

"Part of our mission of excellence is to achieve our model of world-class public administration, which is based on four key elements: highly trained personnel; dedication to continuous improvement; a sophisticated infrastructure; and high-quality service," Diaz Saldaña said.

The Comptroller’s Office has 649 employees, of which 440 are auditors and 209 support staff, such as lawyers, engineers, and computer experts.

Job full of challenges

During fiscal year 2004, ended June 30th, the Comptroller’s Office published 200 compliance audit reports, 8% more than in 2003.

The Comptroller’s Office’s operational budget of $40.1 million was largely used for payroll and related expenses.

Diaz Saldaña is very grateful to the previous legislative assemblies, as well as to Govs. Pedro Rossello and Sila Calderon for their support, displayed through consistent increases in the budget of the Comptroller’s Office.

However, he pointed out that his office never gets everything it requests or really needs.

"We audit all branches of government, its agencies, public corporations, municipalities, community schools, and the comptroller has to examine all government transactions through samples," Diaz Saldaña said. "It’s very important that the Comptroller’s Office is well-equipped and its staff well-prepared."

The comptroller has to request budget funds from members of the legislative assembly who are, ironically, the very same individuals who constantly criticize the reports and findings made by the office, Diaz Saldaña stated.

All audit reports are posted on the Comptroller’s Office website.

The fact that government officials criticize the work done by the Comptroller’s Office sometimes forces the comptroller to publicly speak out regarding audit-related matters, which tends to rile politicians, legislators, and mayors even more, Diaz Saldaña noted.

"There’s no question that due to the nature of my job, the comptroller may be viewed as an unpleasant person by many sectors, because we must inquire into things we understand may not have been done correctly," Diaz Saldaña said, adding that "we do our job with professionalism and objectively, with due respect and deference, and always based on objective and independent findings, which are always well-documented."

Secret weapon

Diaz Saldaña said the Comptroller’s Office’s secret recipe for success is the training and continuing education of its employees. The auditing staff is required to receive no less than 80 hours of training and continuing education every two years.

The Comptroller’s Office invests much of its budget in training its staff. "We have people permanently assigned to our professional development center, whose job it is to continuously train our staff as well as other government agency employees," Diaz Saldaña said. "It has been extremely productive and we use it to provide training as required by law."

These days, the agency has been involved in training the newly elected government officials who will be sworn in on Jan. 2, 2005. Law 222 of Aug. 6 of 1999 requires elected officials receive training from the Comptroller’s Office on such matters as the principles of sound public administration, the comptroller’s audit reports, the legal obligations of all government officials, and more.

These seminars are given in conjunction with the Government Ethics Office, the Justice Department, the Commissioner of Municipal Affairs, the Government Development Bank of Puerto Rico, and the Treasury Department.

Recently elected legislators, senators, and mayors already have received guidance, with new city council members next in line, Diaz Saldaña said.

Unfulfilled dream

Not having its own physical structure, a facility where the Comptroller’s Office can operate in a more integrated manner, is one of its most limiting factors, Diaz Saldaña said. At present, the agency leases several buildings in Hato Rey. Ever since he was appointed comptroller, in October 1997, Diaz Saldaña has been requesting funds that would allow the Comptroller’s Office to have its own building, so far to no avail.

"Having several leased buildings limits our efficiency, and doesn’t allow us to capitalize, and our job being as sensitive as it is, it makes sense that we be integrated in one place," Diaz Saldaña said.

He is hopeful that before his term expires on Oct. 2, 2007, the agency will get its own building.

"Over the next three years, I will finish my task and commitment with the people of Puerto Rico, and I am hopeful that together with the new legislative assembly together with the governor who will be sworn in next month, we will try once again and succeed," the comptroller said.


Diaz Saldaña’s tenures, formerly as Treasury secretary, and now as comptroller of Puerto Rico, haven’t been without their share of controversy. He has been criticized for his involvement in the government’s privatization process under the Rossello administration, the increased number of audit reports issued by the Comptroller’s Office during election year, and in the creation of the Puerto Rico Industrial Investment Fund (PRIIF)—the most controversial of all.

PRIIF became a hot political issue just a few weeks prior to the November 2004 elections.

Established through Law 135 of Dec. 2, 1997, PRIIF creates a fund to provide, among other things, special incentives to attract industries of strategic importance to Puerto Rico. The law instructs the Treasury secretary to deposit into the fund 5% of the income tax paid by exempt businesses.

In February 2003, the Government’s Blue Ribbon Committee issued a report alleging PRIIF funds had been transferred illegally because they were not authorized by the legislature. Three days after the release of the Blue Ribbon Committee report, Diaz Saldaña stated in budget hearings that the allegations were serious, and requested public hearings on the PRIIF issue, and for the parties involved testify. The request was denied.

In August 2004, less than three months before the Nov. 2 elections, Diaz Saldaña was asked to testify on the matter during four days of public hearings, held by Reps. Jorge Colberg Toro and Francisco Zayas Seijo, who at the time was running for mayor of Ponce.

"I attended the public hearings, and during four days of testimony I answered the questions, over and over again. What’s more, I brought a written statement to read the first day of testimony that explained everything, and I was not allowed to read it, although Blue Ribbon Committee members were allowed to read theirs 18 months earlier," Diaz Saldaña recalled, describing the situation as a persecution, with the sole intention of damaging his image.

Diaz Saldaña said the legislative assembly showed no deference or respect toward him or the institution he represents, despite the fact that the comptroller responds to the legislature and has displayed the utmost respect and deference to its members. He acknowledged, however, that House minority leaders Anibal Vega Borges and Victor Garcia San Inocencio favored his reading the written statement during the hearings.

There are two important issues that need to be resolved regarding the Blue Ribbon and the House PRIIF investigations, Diaz Saldaña pointed out. The first—reported by the media—are the alleged "pressures" both Blue Ribbon Committee members, and investigator Nilsa Garcia received from Justice Department officials and from former Economic Development & Commerce Secretary Ramon Cantero Frau, husband of Gov. Sila Calderon.

Cantero Frau was never called to testify, even though the Blue Ribbon Committee had strongly criticized his PRIIF decisions. In the report, Blue Ribbon Committee members never mentioned the alleged pressures they received, which could constitute a cover up, Diaz Saldaña said.

The other unresolved issue involves four or five Blue Ribbon investigators who, after the committee was dissolved in December 2003, were hired by the House to work on their own PRIIF investigation, in spite of the fact that a Justice Department investigation found nothing wrong.

Diaz Saldaña said that during a radio program Blue Ribbon Committee Chairman David Noriega allegedly admitted that those Blue Ribbon investigators went to work for the House investigation because they were promised judicial and prosecutorial positions, in a quid pro quo.

Blue Ribbon Executive Director Brenda Leon now works as a prosecutor for the Justice Department. "These are grave issues that have not yet been clarified, and why haven’t they?" Diaz Saldaña asked, adding that "there could have been additional violations of the law when Blue Ribbon Committee members received confidential tax information released by Hacienda personnel."

Law prohibits using public funds for political purposes, as in the case of the Blue Ribbon Committee and House investigations of PRIIF, Diaz Saldaña pointed out.

Manuel Diaz Saldaña: His life philosophy has led him through 12 years of public service


Manuel Diaz Saldaña, comptroller of Puerto Rico, always has believed work should be perceived as a service to others, and the tasks and challenges of working should help to achieve genuine growth.

Diaz Saldaña has followed this philosophy through his 12 years in public service, dedicated to building a better Puerto Rico. This same philosophy is part of the legacy he has imparted to so many throughout his life in public service.

Diaz Saldaña was born in 1949, in Barrio Obrero, in Santurce. He attended Central High School, in Santurce, and went on to graduate with honors from University of Puerto Rico, where he obtained a bachelor’s degree in business administration, with a concentration in accounting, in May 1970.

He is licensed as a certified public accountant, and a certified fraud examiner.

In 1974, he was one of the founders of the CPA Society of Puerto Rico, over which he presided 10 years later.

Before working for the government of Puerto Rico, Diaz Saldaña worked in the private sector as an auditor for several companies, among them the accounting & tax firms Arthur Anderson, and Peat Marwick, Mitchell & Co. In 1978, in collaboration with fellow CPA Alfredo Rivera Marrero, he founded the accounting and tax firm Diaz Saldaña, Rivera Marrero & Co.

In 1993, he entered what would become a successful career in public service. He was named secretary of the Treasury, leading the 1994 Tax Reform changes that were unanimously approved by the Puerto Rico Legislature, becoming law.

As secretary of the Treasury, he increased tax contributions by 39%, and also developed a Strategic Plan for Puerto Rico, a detailed vision of the island’s future, which included modernizing the island’s technological infrastructure, administrative reform, and creating a Taxpayer’s Bill of Rights, among other improvements and updates.

On Oct. 2, 1997, under Gov. Pedro Rossello’s administration, Diaz Saldaña was sworn in as comptroller of Puerto Rico, a position with a 10-year term.

As comptroller, he has worked to thwart corruption, an effort that has included visiting Puerto Rico’s 78 municipal governments to offer guidance on the correct use of public funds and properties. He also kicked off the Zero Tolerance of Corruption Campaign. Up to now, he has created three different Strategic Plans for Puerto Rico that extend to the year 2007.

In the two government agencies where he has served, Diaz Saldaña also took on the responsibility of designing and implementing Total Quality Management programs, which focus on excellence in service and enforcing anticorruption methods.

In the five-year span between 1993 and 1997, he served as member and chairman of several government agency boards, among them the Government Development Bank of Puerto Rico and the Puerto Rico Finance Board. In addition to these responsibilities, in 1996, he also supervised and coordinated the Rossello administration’s efforts to privatize government services and companies, aimed at improving the quality of these services for the people of Puerto Rico.

Diaz Saldaña has been honored by many government agencies, as well as civic and professional organizations. In May 2001, Pontifical Catholic University of Puerto Rico granted him an honorary doctorate in recognition of his dedicated public service.

In 1991, he received the Financial Reporting Achievement Award from the Government Finance Officers Association of the U.S. & Canada, the highest honor bestowed on a government agency for its unfailing compliance with financial reporting standards.

In September 2003, U.S. General Comptroller David M. Walker invited Diaz Saldaña to join the U.S. General Accounting Office’s Domestic Work Group, a federal commission that offers ideas and recommendations for improving government auditing, and administrative processes.

He also has been named Distinguished Public Servant of the Year by a number of associations.

Throughout his years in public service, Diaz Saldaña has kept his promise to serve others. The recognitions he has received reflect the gratitude of the people of Puerto Rico for his contributions, his vision, and his commitment to all of his endeavors.

The most important rewards he has been blessed with are his wife of 34 years, Elba, his three children, and two grandchildren.

This Caribbean Business article appears courtesy of Casiano Communications.
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