FEMA: We Have 'Significant Concerns' Over Whitefish Contract In Puerto Rico

The Federal Emergency Management Agency on Friday became the latest party to question Puerto Rico Power Authority’s decision to award Whitefish Energy a $300 million contract to restore the island’s hurricane-ravaged electrical grid.

“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,” according to a FEMA statement issued Friday.

Whitefish Energy, a small Montana-based energy firm that is based in the hometown of Interior Secretary Ryan Zinke and financially backed in part by a major donor to President Donald Trump ’s 2016 presidential campaign, was hired by Puerto Rico’s government-owned power company earlier this month.

Its contract bars several government bodies from auditing or reviewing the “cost and profit elements” of Whitefish’s labor rates, according to documents first obtained Monday by several media outlets, including Caribbean Business  and The Washington Post.

Workers hired by Whitefish are allocated nearly $80 per day for food expenses and over $330 per day for accommodations, the documents showed.

FEMA, which denied having any involvement in PREPA’s decision to award Whitefish the contract, said it was looking into the power company’s process for determining whether the contract prices were reasonable.

“Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate,” according to FEMA’s statement.

FEMA’s statement Friday follows Puerto Rico Gov. Ricardo Rossello’s request to the Department of Homeland Security on Wednesday to conduct a review of the business deal.

White House press secretary Sarah Huckabee Sanders also denied any federal involvement in PREPA’s selection of Whitefish.

“This is a contract that was determined by local authorities in Puerto Rico,” Sanders said during a press briefing Friday. “As we understand there’s an ongoing audit, and we’ll look forward to seeing the results of that.”

Late Friday afternoon, Zinke denied any involvement in the contract allocation. He said in a statement that he was contacted by Whitefish after the contract was awarded, and that he welcomed “any and all investigations” into the matter. 

“I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico,” Zinke said. “Neither myself nor anyone in my office had advocated for this company in any way. After the initial contract was awarded, I was contacted by the company, on which I took no action. All records, which are being made available to appropriate officials, will prove no involvement.”

Ken Luce, a spokesman for Whitefish, defended his company’s contract with PREPA on Wednesday and accused some critics of having “a fundamental lack of understanding about the industry.”

“There’s no conspiracy,” Luce told HuffPost. “Whitefish is no different than any other company that would be out there doing the work.”

Luce did not immediately return HuffPost’s request for comment Friday about FEMA’s statement.

Several political figures, including San Juan Mayor Carmen Yulin Cruz, have cast doubts about the ethical fitness of such a business deal, claiming the processes involved in procuring the contract lacked transparency.

“The contract should be voided right away, and a proper process which is clear, transparent, legal, moral and ethical should take place,” Cruz told Yahoo News earlier this week.

“Every contract that comes out needs to be a public document,” she continued. “This is one of the things that we are asking for, and the due diligence that goes towards that contract also needs to be public documents.”

This story has been updated to include comments from Sanders and Zinke as well as to note that Caribbean Business and other news organizations obtained a copy of the contract Monday.