Puerto Rico’s state-owned utility has asked FEMA for $10 million to pay for energy grid repairs made in part by a Montana firm under a contract being investigated by the FBI and Congress, CNN reports.
Puerto Rico Electric Power Authority (Prepa) awarded a $300 million contract to Whitefish Energy, a small, young energy company with personal connections to Secretary of the Interior Ryan Zinke. Widespread skepticism over the contract’s legality led FEMA director Brock Long to assert that federal funds would not be used to pay Whitefish. However, FEMA may not have as much discretion over the use of federal funds as Long claims.
“As I understand, not one dollar has gone towards that contract from FEMA,” Long said during a Tuesday Congressional hearing. “And what we’re doing is rectifying to make sure that PREPA has not requested any funding for that reimbursement effort.”
A CNN source said that while FEMA funds probably were not directly paid to Whitefish, federal funds could still end up paying the firm’s fees.
“FEMA makes payments to Prepa. Prepa pays Whitefish,” a source with knowledge of the payments told CNN. “When FEMA says they’re not approving of Whitefish, that is where the money is going.”
Prepa terminated the contract with Whitefish Sunday, but not before the Montana firm had hundreds of workers and more than 2,500 tons of heavy equipment in Puerto Rico repairing the damaged electrical grid.
According to the contract, Prepa is responsible for covering all “actual, reasonable, and necessary expenses, including reasonable demobilization costs” for canceling the contract early, NPR reports.
While Long claims that federal aid will not be directed toward those costs, Prepa and the Puerto Rican government remain bankrupt with limited options to pay for the bills associated with the island’s recovery. President Donald Trump ordered FEMA to cover almost all the costs of recovery for six months after Hurricane Maria hit, according to CNN.
Prepa and Whitefish deny allegations of misconduct in making the contract. Whitefish and Zinke deny that the interior secretary influenced the process of awarding the contract in any way.
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