Interior secretary: False allegations raised about $300 million Puerto Rico power contract

Joy Montgomery
October 30, 2017

The governor of Puerto Rico called for the cancellation of a controversial $300 million contract the island's utility signed with a small Montana-based company tasked with a central role in repairing the territory's hurricane-ravaged electric power grid.

Rossello also said he has asked the Office of the Comptroller for a detailed and thorough investigation about the contracting process that the Puerto Rico Electric Power Authority used to select Whitefish.

"There can not be any distraction that alters the commitment of raising electric system as soon as possible", Rossello said of the contract, which came under scrutiny last week.

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"Following the information that has emerged, and with the goal of protecting public interest, as governor I am asking government and energy authorities to immediately activate the clause to cancel the contract to Whitefish Energy", Rossello said in a statement.

In a statement on Thursday, Fema said: "Any language in any contract between Prepa and Whitefish that states Fema approved that contract is inaccurate".

Ramos said he had not talked with Whitefish executives about his announcement. That person would coordinate the federal government, PREPA and contractors - and perhaps get all the relevant entities rowing in the same direction and at the same speed. Almost six weeks after Hurricane Maria devastated the island, only about a quarter of homes and businesses have power, and the utility has set a goal of having 95 percent of power back by the middle of December.

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The contract drew scrutiny because the company had only two employees when it was awarded and is headquartered in the hometown of Secretary of the Interior Ryan Zinke.

Separately, a bipartisan group of House lawmakers, including Majority Leader Kevin McCarthy, R-Calif., and Democratic Whip Steny Hoyer, D-Md., said they would travel to the island on Saturday to observe recovery efforts.

FEMA said it has not approved any reimbursement requests from the power company for money to cover repairs to the island's electrical system. He went on to become CEO of Whitefish two years ago.

On Friday, White House Press Secretary Sarah Huckabee Sanders said President Trump asked Zinke about the contract and the cabinet secretary said he was not involved.

Whitefish has said that its expertise working in mountainous terrain qualifies it for the job and that its business model calls for rapidly expanding using subcontractors.

This week, Rep. Rob Bishop, the Utah Republican who heads the House Natural Resources Committee, sent the power company director a letter demanding documents, including those related to the contract with Whitefish and others that show what authority the agency has to deviate from normal contracting processes.

A 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. There will be a separate audit by the Department of Homeland Security's Inspector General's Office.

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