Multiple investigations opened into Puerto Rico energy contract

October 27, 2017, 4:43pm

The controversial $300 million contract awarded to a two-man, Montana-based firm to rebuild Puerto Rico’s electric grid was made public Thursday night, and it’s now under investigation by the Federal Emergency Management Agency and Congress.

The 42-page document, first uploaded to DocumentCloud by Puerto Rican journalist Rafelli Gonzalez of Caribbean Business and circulated by Daily Beast reporter Ken Klippenstein, shows that the agreement between the Puerto Rico Electrical Power Authority and Whitefish Energy is a generous one, including stipulations that government bodies don’t “have the right to audit or review the cost and profit elements” of the recovery effort.

And there’s no time limit on the company to complete its work.

And though the contract was widely reported as “leaked,” anyone could have asked for a copy of it and received one — the Puerto Rican comptroller’s office told VICE News that the contract was public information. The comptroller’s office also confirmed that they’re auditing the contract.

The Federal Emergency Management Agency said Friday that it has “significant concerns” with the contract that PREPA drew up with Whitefish, and that it would be reviewing it — but that it had not done so prior to the contract’s approval, as the contract itself states.


“By executing this contract, PREPA hereby represents and warrants that FEMA has reviewed and approved of this contract, and confirmed that this contract is in an acceptable form to qualify for funding from FEMA or other U.S. governmental agencies,” it reads.

The lucrative contract has also come under scrutiny for being awarded to a tiny company that had only two employees when Hurricane Maria pummeled Puerto Rico. Whitefish Energy is based in Whitefish, Montana, the hometown of Interior Secretary Ryan Zinke.

On Wednesday, after a scuffle on Twitter with San Juan Mayor Carmen Yulin Cruz, the company also threatened to walk off the job. Cruz says that the contract “should be voided right away” and a transparent process should take place to find a new agreement.

Puerto Rico Gov. Ricardo Rossello, for his part, said during a press conference Thursday that there would be “hell to pay” if any wrongdoing was uncovered in the awarding of the contract.

The White House, too, disavowed the contract, saying that neither the federal government nor Zinke had any involvement in it.

“He reiterated once again that we have no role — the federal government — and specifically he had no role in that contract,” White House press secretary Sarah Huckabee Sanders said during a White House press briefing. She also said that President Donald Trump specifically asked Zinke whether he was at all involved with the contract on Friday, “just for clarification purposes.”


Zinke took to Twitter himself to say he was not involved in the contract negotiations.

Whitefish Energy, Thursday night, was posting slickly-produced drone-shot videos to its Twitter page.

Whitefish did not immediately respond to a request for comment.

Only 28 percent of Puerto Ricans currently have power, more than five weeks after the storm hit.