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Cantwell, others in Congress call for investigation into Whitefish Energy contract in Puerto Rico

October 28, 2017 GMT

The small company from Whitefish, Montana, contracted to help restore power in Puerto Rico has come under fire from multiple members of Congress, including Democratic Sen. Maria Cantwell of Washington.

In September, Whitefish Energy Holdings LLC signed a $300 million contract with the Puerto Rico Electric Power Authority to repair and rebuild 100 miles of electrical transmission infrastructure on the hurricane-ravaged island. Since then, the company has contracted about 300 journeymen electricians to work in Puerto Rico.

Following reports by the Washington Post and the New York Times that raised questions about the contract, multiple congressional committees are planning to investigate the agreement.

On Thursday, Cantwell, along with fellow Democrat Sen. Ron Wyden, Oregon, sent a letter to the U.S. Government Accountability Office asking it to look into Whitefish’s contract with PREPA.

“Among the principal concerns raised in reports is the opaque and limited nature of PREPA’s bidding process that led to this Whitefish contract,” Cantwell wrote on Twitter Thursday.

While the PREPA is not part of the federal government, it has received at least two grants worth $171 million from the Federal Emergency Management Fund since Sept. 26.

Ricardo Ramos, Puerto Rico Electric Power Authority director, has praised the work performed by Whitefish so far, saying the company was the only offer the utility received that did not require a down payment. The power company is $9 billion in debt and was already struggling to provide service amid ongoing power outages before hurricanes Irma and Maria hit last month.

“There is nothing illegal going on here,” Ramos told the Associated Press on Thursday.

Sen. Lisa Murkowski, R-Alaska, who chairs the Senate Energy and Natural Resources Committee, said she will hold a hearing on the issue.

Sen. Claire McCaskill of Missouri, senior Democrat on the Senate Homeland Security and Governmental Affairs Committee, said the Whitefish contract “raises every red flag in the book.”

The homeland security panel will hold a hearing on the issue next week and said officials should be ready to answer tough questions, the senator said. She said she also wants the inspector general of the Department of Homeland Security, which includes FEMA, to investigate, adding to the list of possible investigations.

Whitefish Energy is open to having the inquires into its company, spokesman Ken Luce said Thursday.

“Whitefish welcomes the questions from elected officials,” he said. “It is a good thing they are asking questions and we are pleased for the requests for information.”

But a the same time, Luce said, it is important for members of Congress to ask why Whitefish is one of the few companies in Puerto Rico right now.

“We are glad to give this information, but we see this as an opportunity for Whitefish to call on the other arms of the government to help out in Puerto Rico.”

According to Luce, Whitefish Energy employees and contracted employees are seeing people that need more help than power restoration will provide.

Cantwell and Wyden also said they are concerned about “contemporaneous communications” between Whitefish Energy officials and senior members of the Trump administration, including Interior Secretary Ryan Zinke, who is from Whitefish, Montana.

The Interior Department has denied that Zinke, a former Montana congressman, played a role in the contract award.

Zinke knows Whitefish CEO Andy Techmanski “because they both live in a small town where everyone knows everyone,” a department spokeswoman said. Zinke’s son had a summer job at a Whitefish construction site in Washington’s Chelan County.

“I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico,” Zinke said in a statement Friday linked to a tweet. “Any attempts by the dishonest media or political operatives to tie me to awarding or influencing any contract involving Whitefish are completely baseless …”

“I welcome any and all investigations into these allegations.”

House members of both parties are raising questions about Whitefish’s involvement in recovery efforts. The House Energy and Commerce panel and the House Natural Resources committee are asking for documents related to the Whitefish contract.

In July, PREPA filed for bankruptcy. Chris Chiames, a spokesman for Whitefish said while many companies were worried about working with PREPA, Whitefish was not. The company got in contact with PREPA in September after Hurricane Irma rolled through the Caribbean, but before Hurricane Maria struck, and discussed working on Puerto Rico’s transmission grid, Chiames said.

A federal control board that oversees Puerto Rico’s finances said this week it had appointed a former military officer to oversee the work. Retired Air Force Col. Noel Zamot will be responsible for speeding up reconstruction efforts and overseeing coordination with the board, Puerto Rico’s government and the federal government.

It was not immediately clear whether Zamot would have the authority to void Whitefish’s contract, although under the contract the utility can suspend or terminate the contract “for any or no reason” after providing written notice to Whitefish and compensating the company for actual expenses.

Federal control board spokesman Jose Luis Cedeno did not return calls or messages Friday from the Associated Press seeking comment. Power company spokesman Carlos Monroig also did not respond to requests for comment.

About 75 percent of the U.S. territory remains without power more than a month after the Category 4 storm made landfall.

The Associated Press contributed to this report.