Life at DDEC After Top Officials Resign En Masse

Concerns raised about investor reaction after major project put on hold

^{By Philipe Schoene Roura}

Although the uproar over the sudden resignations of key personnel at the Economic Development & Commerce Department (DDEC) has largely died down, the dust has yet to settle, with the private sector expressing concerns about the impact that the abrupt departures may have on Puerto Rico’s efforts to improve the economy.

The future outlook on key economic development initiatives, such as reshoring—attracting manufacturing operations back to the Island—remains uncertain.

The government projected a “business as usual” image after the en masse resignations at DDEC, led by its then-Secretary Sebastián Negrón Reichard, along with at least 10 other top officials. In his resignation letter, Negrón Reichard cited the loss of mutual trust and said that there had been excessive interference in the agency’s procurement processes and the reversal of two summary suspensions that he issued after an internal investigation on a Request for Proposal (RFP) process.

In a document obtained by Caribbean Business, an Executive Summary refers to the issues involved as a procurement dispute and explained that the controversy should be treated as a “federally funded procurement-integrity matter, not merely a Puerto Rico personnel dispute.” 

The analysis included in the Executive Summary stresses that publicly available facts support characterizing the matter as a “credible corruption risk and federal grant-compliant case.” 

The document also lists several key judgments: 

(1) “The funding source [FEMA] materially increases the seriousness of the matter.” 

(2) “The case presents credible indicators of attempted procurement steering… Public reporting states that evaluation committee members reported pressure to favor a particular bidder and later alter scores already submitted. Those facts, if substantiated by the internal report and procurement file, are consistent with bid steering or procurement manipulation.”

(3) “The most strategically significant issue is not only the alleged RFP pressure, but the later reported reversal of suspensions.”

(4) “No public evidence currently proves criminal corruption by the governor, La Fortaleza, or any named official.”

(5) “The strongest public posture is oversight-focused: show the files, identify the bidder, protect whistleblowers, and explain the reversals.”

As of press time, Gov. Jenniffer González Colón had yet to nominate a new DDEC secretary.

Reshoring Effort on Hold

The top resignations at DDEC may already have impacted a reshoring effort in Puerto Rico.

“The DDEC secretary played a key role on multiple fronts. He understood the stakes in research and development and had earned the trust of top corporate executives,” a source familiar with several major deals in the pipeline told Caribbean Business on condition of anonymity. 

The source added that Hewlett Packard Enterprise was planning to establish a major research center on the Island. The project has already hired 150 engineers and was expected to expand to 450, but has stalled as this newspaper went to press.

The project is an important part of HPE’s pivot to artificial intelligence (AI). According to HPE’s website, the company has made significant investments in AI, particularly through its collaboration with NVIDIA. In the second quarter of fiscal year 2026, HPE reported revenue of $10.7 billion, up 40% from the prior-year period.

Impact of Top-Level Resignations

En masse resignations at an organization sends a strong, usually negative signal to investors and the business community, as the departures suggest instability, uncertainty and potential internal problems. 

When making their decisions, investors depend on stable and predictable leadership. Mass resignations often signal internal conflict and/or disagreements, which could lead to a loss of investor confidence. As a result, investors may adopt a “wait and see” attitude, delaying important decisions on their investment until a clearer picture emerges. Investors want to see a quick return to normalization and stability, while replacements need to be capable and competent. 

A mass resignation of top officials usually conveys instability and heightens investor caution. However, the ultimate impact depends on why the leaders left and what investors expect from the successors. 

“Without a shared vision, it’s nearly impossible to maintain momentum and deliver meaningful results,” said Igor Ryabenkiy, the founder & CEO of AltaIR Capital in a Forbes column. He added that public conflicts can also damage an organization’s reputation and create a sense of instability.

“Ultimately, leadership conflicts are never truly beneficial—even if teams go through them and perform well afterward. However, while these situations may seem like crises, they don’t always spell disaster. With the right approach, they can be managed and even become opportunities for growth or course correction,” he added.

What happens next at DDEC will determine whether investors will respond with confidence. 

Impact on Capitol Hill

A Washington, D.C. source said the Island remains in the sights of federal officials. “I am surprised that some government officials in Puerto Rico believe that what happens in Spanish will not get around. The domestic policy sector, the OMB [Office of Management & Budget] and senior congressional staffers are all aware of the transparency issues that allegedly prompted Negrón Reichard’s resignation. 

“People do not realize the damage that is done to investor confidence, and really, confidence in Puerto Rico’s government when a public official with Negrón Reichard’s reputation suddenly resigns,” said a source on the Hill. 

Business Community Expresses Concerns

For his part, the president of the United Retailers Association (CUD by its Spanish acronym) Ramón Barquín III acknowledged that “there is undoubtedly a disruption and there is a crisis,” despite interim DDEC Secretary (formerly DDEC Undersecretary) Roberto Lefranc Fortuño stating that the agency continues its “normal operations.” 

After an emergency meeting at La Fortaleza, Barquín said: “I am worried, without a doubt, I am worried. The thing is that the meeting, naturally, is to appease and give confidence to the most important sector, which is the productive sector of society. Am I concerned about? Of course I am.”

He mentioned that it is a challenge to find a strong candidate for the top position at DDEC, someone who has the qualifications, abilities and experience to run the agency. “Because the other challenge we have is that there is still no coherent economic development plan that can be articulated,” Barquín said.