Puerto Rico gov seeks to cancel $300M Whitefish contract

Puerto Rico gov seeks to cancel $300M Whitefish contract

Kerry Wise
October 30, 2017

Ricardo Rossello wants the $300 million contract that Puerto Rico Electric Power Authority signed with Whitefish Energy to be canceled "immediately", CBS News' David Begnaud reports.

Rossello said that at least $8 million has been paid to Whitefish so far, but "there can not be any kind of distraction that alters the commitment to restore electrical power as soon as possible in Puerto Rico".

The competing visions show how hard it has been to restore electricity to three-quarters of the residents of Puerto Rico, who remain in the dark more than a month after Hurricane Maria tore through the US territory. In a statement, FEMA said it was not involved in the decision, and warned that it might not reimburse the authority, known as PREPA, if the contract does not abide by federal requirements.

Whitefish and the island's public utility, the Puerto Rico Electric Power Authority, struck an agreement on September 26, six days after Maria swept through, without a formal bidding process. The mayor of San Juan, Carmen Yulín Cruz, then weighed in on Whitefish, sparking a Twitter feud with the firm, which offered to take its workers home after she criticized the company and how the contract was awarded. Some critics of the deal with the for-profit company say the island should have opted to use a mutual-aid network of public utilities that usually are called on for massive fix work after natural disasters.

The specific terms of the contract also raised eyebrows, from the exorbitant hourly rates charged by Whitefish to its barring of a government audit. He said in a statement Friday, "I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico".

And that the Puerto Rican government "waives any claim against contractor related to delayed completion of work". Zinke met with President Donald Trump on Friday morning, and White House press secretary Sarah Huckabee Sanders said Trump did ask Zinke about the contract, to which Zinke denied involvement.

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Zinke's office said the secretary knows Techmanski but only because both are from a small town where "everybody knows everybody", Politico reported, adding that one of Zinke's sons "joined a friend who worked a summer job' at one of Techmanski's construction sites".

The contract states that "Prepa hereby represents and warrants that Fema has reviewed and approved of this Contract".

Fema also said it had "significant concerns" with how Prepa procured this contract and had "not confirmed whether the contract prices are reasonable".

Rep. Rob Bishop, R-Utah, chairman of the House Committee on Natural Resources, and Rep. Bruce Westerman, R-Ark., chair of the subcommittee on Oversight and Investigations, wrote a letter directing the head of Puerto Rico's public utility system to retain all records surrounding the hiring of Whitefish Energy and to turn documents over to Congress.

Democratic Congressman Raul Grijalva of Arizona said, "Congress needs to understand why the Whitefish contract was awarded and whether other, more cost-effective options were available".

During a news conference Thursday, Rosselló said he was expecting an audit into Whitefish's $300 million contract.