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How Did A Tiny Montana Power Company Land A Huge Contract To Fix Puerto Rico's Power Grid?

A man descends a makeshift ladder reaching to the top of a broken bridge spanning the Vivi River on October 20, 2017 in Utuado, Puerto Rico.
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A man descends a makeshift ladder reaching to the top of a broken bridge spanning the Vivi River on October 20, 2017 in Utuado, Puerto Rico. Getty Images

The Department of Homeland Security, the House Natural Resources Committee, and the House Energy and Commerce Committee are investigating a $300 million contract signed between a small Montana utility firm and Puerto Rico's state-owned power authority, voicing concern over both the size and for-profit nature of the company as well as its connection to Interior Secretary Ryan Zinke.

The Washington Post reported earlier this week that Whitefish Energy, which only had two full-time employees when Hurricane Maria made landfall in September, signed the contract with the Puerto Rico Electric Power Authority (PREPA) earlier this month. The company has been tasked with repairing and reconstructing Puerto Rico's power grid, which was so decimated in the storm that as of this week only 20 percent of the island's residents have power.

Maria made landfall on September 20th.

But as the Hill pointed out yesterday, Whitefish is very small and doesn't have much experience repairing electricity infrastructure. Though PREPA claims the company was chosen for the job because it did not require PREPA to put down a hefty advance payment, it appears elected officials are concerned the company's connection to Zinke—Whitefish CEO Andrew Techmanski and Zinke are from the same town and know each other—helped get Whifefish the gig.

Zinke and Techmanski have denied the former had any influence over the contract, but the House Natural Resources Committee and the House Energy and Commerce Committee opened an investigation into the deal yesterday, as did the Department of Homeland Security’s inspector general, which will "conduct vetting to look for the presence of any inappropriate relationships," per a statement.

The Federal Emergency Management Agency says it was not involved in Whitefish's selection, and issued the following statement:

The decision to award a contract to Whitefish Energy was made exclusively by the Puerto Rico Electric Power Authority (PREPA). FEMA was not involved in the selection. Questions regarding the awarding of the contract should be directed to PREPA.

Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate.

FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.

Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.

It is important for all applicants for FEMA Public Assistance to understand and abide by Federal requirements for grantee procurement. Applicants who fail to abide by these requirements risk not being reimbursed by FEMA for their disaster costs.

FEMA continues to focus on the expedited restoration of essential services in support of the Governor’s recovery goals.

Though some lawmakers, like Senator Marco Rubio, have defended Whitefish, others are not so sure. "There is something very fishy about the Whitefish deal,” Illinois Democratic Rep. Luis Gutierrez told ABC News. "I have been here 25 years and this doesn’t pass the smell test."

Meanwhile, Governor Andrew Cuomo was in Puerto Rico again yesterday. He addressed reporters when he returned to John F. Kennedy Airport, criticizing the federal government for its response.

"This has been now 36 days without power. You have to wonder, if you had a state in the United States that went 36 days without power, what kind of reaction you would have?" he said. "It would be on the TV news every night. People would be outraged and people tend to forget that Puerto Ricans are Americans, and they really do deserve a better response than they're getting."

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