Animal control workers seized dozens of dogs and cats from housing projects in the town of Barceloneta and hurled them from a bridge to their deaths, authorities and witnesses said.
Mayor Sol Luis Fontanez blamed a contractor hired to take the animals to a shelter.
"This is an irresponsible, inhumane and shameful act," he said on Friday.
Fontanez said the city hired Animal Control Solution to clear three housing projects of pets after warning residents about a no-pet policy. He said the city paid US$60 for every animal recovered and another US$100 for each trip to a shelter in the San Juan suburb of Carolina.
Raids were conducted on Monday and Wednesday, and residents told TV reporters they saw the animal control workers inject the animals. When they asked what they were giving them, they said they were told it was a sedative for the drive to the shelter.
"They came as if it were a drug raid," said Alma Febus, an animal welfare activist. "They took away dogs, cats and whatever animal they could find. Some pets were taken away in front of children."
But instead of being taken to a shelter, the pets and strays were thrown 15 meters from a bridge in the neighboring town of Vega Baja, according to Fontanez, witnesses and activists, apparently before dawn on Tuesday.
"Many were already dead when they threw them, but others were alive," said Jose Manuel Rivera, who lives next to the bridge. "Some of the animals managed to climb to the highway even though they were all battered, but about 50 animals remained there, dead."
Rivera said he alerted officials, who spread lime over the animals' corpses to control the stench.
Animal Control Solution owner Julio Diaz said he went to the bridge when he heard of the allegations, but remains unconvinced that the dead animals are the same ones his company collected.
"We have never thrown animals off any place. We always take them to our local shelter and euthanize them," he said. "They can't prove that they are the same dogs that we picked up."
Fontanez said he would cancel the city's contract with Animal Control Solution and said city lawyers were considering a lawsuit.
The US Department of Housing and Urban Development (HUD) has a rule allowing locally owned and operated housing authorities to set pet rules, but it does not grant authority for a blanket ban or mass confiscation, said Brian Sullivan, an HUD spokesman in Washington.
Asked to comment on the reported pet massacre, Sullivan said: "This sickens me if true."
Animal rights activists have long criticized the treatment of pets in Puerto Rico, where there is no pet registration law and little spaying or neutering. Animal shelters are overwhelmed and must kill many of the dogs they receive, according to Victor Collazo, president of the island's Association of Medical Veterinarians.
One organization recruits volunteers to take dogs home with them on commercial flights, and sends between 1,500 and 2,000 dogs a year from Puerto Rico to American shelters.
At least 175 dogs have been rescued in the last couple of years. Similar rescue efforts have been undertaken in the Bahamas and elsewhere in the Caribbean.
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