Causes.com
| 10.30.17

Whitefish Energy Contract in Puerto Rico Canceled Amid Investigations

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What’s the story?

On Sunday, Puerto Rican Governor Ricardo Rosselló (R) announced that he was voiding the $300 million contract awarded to a small Montana power company, Whitefish Energy, to rebuild the island's devastated power grid. News of the contract raised many questions about the company’s ability to fulfill the contract, as well as the contract’s terms and the company’s ties to GOP figures.

Since news of the contract exploded in the media, multiple investigations have been initiated into the deal. An emergency supervisor has been put in place by the federal control board that is monitoring the island’s finances, and prominent local officials have called for the resignation of the head of Puerto Rico’s power company.

Why does it matter?

As reported previously by Countable, Whitefish Energy, a company that specializes in power grid repairs in extremely hazardous conditions, was in contact with the Puerto Rico Electric Power Authority (PREPA) after Hurricane Irma damaged the island. When the severity of Hurricane Maria’s impending impact was realized, PREPA reached out to a variety of companies about the repairs that were likely to be needed. Whitefish was the only company that would agree to do the work without requiring a hefty down payment. PREPA, which is currently $9 billion in debt, did not have millions on hand for a down payment.

However, on the day the storm hit the company only had two full-time employees. The company historically relies on temporary contract labor to do the vast majority of their work, though they had never embarked on a project of the scale of what they'd face in Puerto Rico. Also, CEO Andrew Techmanski has personal ties to Interior Secretary Ryan Zinke, and Texas GOP heavy-hitter and Trump campaign donor Joe Colonetta is a primary financier for the company.

Finally, the contract involves very high reimbursement rates for labor and equipment and contained a clause that limited the government’s right to audit Whitefish’s work.

It is "allowable under [Federal Emergency Management Agency] FEMA regulations in emergencies" for the usual bid process for federal contracts to be circumvented, reports The Hill, and both PREPA representatives as well as Whitefish have defended the contract and the work being done. But with 70% of the island still without power over a month after Hurricane Maria hit, and the other details emerging about the company and the contract, many concerns have been raised.

Investigations are being launched into the deal by the FBI, both the House Energy and Commerce and Natural Resources Committees, as well as the Inspector General for the Department of Homeland Security, which oversees FEMA. According to the Associated Press, the "federal control board that oversees Puerto Rico’s finances announced this week that retired Air Force Col. Noel Zamot will be in charge of power reconstruction efforts" as opposed to the heads of PREPA. Governor Rosselló, however, has rejected that appointment, swearing that if any officials engaged in inappropriate dealing that he would “take administrative actions.”

San Juan Mayor Carmen Yulin Cruz, in an interview with Joy Reid of MSNBC’s AM Joy, called for PREPA head Ricardo Ramos to resign over the deal.

What do you think?

Were Puerto Rican officials right to void the contract? Should the investigations continue?

Tell us in the comments what you think, then use the Take Action button to tell your reps!

— Asha Sanaker

(Photo Credit: Department of Defense / Creative Commons)

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