Puerto Rico Gov. Ricardo Rossello pulled the plug on the $300 million deal Sunday. Governor Rossello was already concerned over any wrongdoing when he said on Friday, there will be “hell to pay” if any wrongdoing is discovered in the contract being awarded to Whitefish.
In a statement, Whitefish said that it was “very disappointed” and that the utility’s decision “will only delay what the people of Puerto Rico want and deserve — to have the power restored quickly.” It said that it would “finish any work that PREPA” — the Puerto Rico Electric Power Authority — “wants us to complete and stand by our commitments.”
Whitefish Energy Holdings, a small Montana firm which reportedly had only two employees when they were awarded the contract, is at the heart of the controversy, not so much because of the number of employees, but because of the way PREPA handled the whole contract mess.
PREPA declined assistance from energy companies
In the first place, PREPA officials declined help from utilities on the mainland, something that is always done in any disaster of this kind. But this was because, according to Caribbean Business, Whitefish had already been selected by PREPA before the hurricane hit the island.
And because PREPA is going through a bankruptcy proceeding, the Federal Emergency Management Agency (FEMA) is paying the costs to rebuild the grid, and apparently, FEMA may end up being stuck paying Whitefish, according to the contract.
The contract itself appears to have only one-sided commitments, as well as stipulations that government agencies cannot review the project’s finances. The contract went largely unnoticed until Thursday when journalist Ken Klippenstein spotlighted the document on Twitter.
According to Politico, questions have also been raised over PREPA’s choice of the tiny company because it is located in the hometown of Interior Secretary Ryan Zinke. One of his sons worked for Whitefish Energy last summer.
Zinke and the Trump White House are adamant there was no involvement in the hiring of Whitefish Energy. “This is a contract that was determined by the local authorities in Puerto Rico, not something that the federal government played a role in,” White House press secretary Sarah Huckabee Sanders said at Friday’s briefing.
The Senate Homeland Security and Governmental Affairs Committee became the latest panels to probe the business deal. The Department of Homeland Security has been asked to review the contract to see whether FEMA will be responsible for reimbursing PREPA the cost of Whitefish Energy’s work.
