The FBI is looking into a $300 million deal that Puerto Rico’s government power company signed with a small Montana-based firm to repair the island’s electrical grid after it was decimated by Hurricane Maria, sources told The Wall Street Journal.
The Puerto Rico Electric Power Authority (PREPA) board moved to terminate the contract with Whitefish Energy Sunday. Puerto Rico Gov. Ricardo Rosselló, who appoints the board, urged the action Sunday morning because controversies about the firm’s experience and contract were distracting from the real problem of restoring Puerto Rico’s power grid, according to The New York Times.
The FBI’s San Juan field office is digging into the circumstances surrounding the contract between PREPA and Whitefish after the deal faced widespread criticism, according to TheWSJ.
The Montana firm had been operating for two years and paid two full-time employees before landing the contract with PREPA. The company is based in the hometown of Interior Secretary Ryan Zinke, an acquaintance of Whitefish CEO Andy Techmanski.
Both Zinke and Techmanski have denied allegations that the Department of the Interior secretary had anything to do with the contract being awarded. PREPA Executive Director Ricardo Ramos also holds that the contract was awarded according to regulations governing emergency situations.
High level U.S. officials, including in the Federal Emergency Management Agency and multiple congressional committees, have raised concerns about the contract.
According to the contract, Prepa may terminate it for “for any or no reason, when in PREPA’s judgment such action responds to its best interest,” according to NPR.
The state-owned utility is liable, however, for all “actual, reasonable, and necessary expenses, including reasonable demobilization costs” associated with canceling the contract before completion.
Whitefish currently has more than 350 workers and 2,500 tons worth of equipment in Puerto Rico reconstructing the badly damaged grid. About 30 percent of Puerto Rico has power, TheWSJ reports.
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