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Puerto Rico's government electric utility has accepted the governor's request to immediately scrap a $US300 million contract with a tiny Montana-based energy firm after a huge public backlash to the controversial no-bid deal.
The contract between Whitefish Energy Holdings and the bankrupt electric utility created a scandal after it was revealed last week that it was awarded to the company without a competitive bidding process.
The deal was excoriated by critics – including residents, local officials, and U.S. federal authorities – because Whitefish is located in the hometown of Interior Secretary Ryan Zinke, though he has claims he had no contact with the firm until after it was awarded the contract by the Puerto Rico Electric Power Authority, or PREPA.
Zinke, a former Montana congressman, knows Whitefish CEO Andy Techmanski – a Trump donor – and Zinke’s son also had a summer job at a Whitefish construction site. The company is headquartered in Whitefish, Montana.
PREPA Director Ricardo Ramos announced the decision during a press conference.
Earlier on Sunday, Puerto Rico’s Governor Ricardo Rossello had called for the contract with Whitefish to be “immediately” canceled.
“Following the information that has emerged, and with the goal of protecting public interest, as governor I am asking government and energy authorities to immediately activate the clause to cancel the contract to Whitefish Energy,” Rossello said in a statement.
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On September 26 – mere days after Hurricane Maria plowed through the U.S.-controlled territory – the deal was made for the Montana company to repair Puerto Rico's dilapidated electrical grid.
At the time the storm hit the island, Whitefish had only two full-time employees. Whitefish now claims to have more than 350 people on the island and that they have experience working in mountainous terrain that qualifies it to take on such a large-scale project.
Ramos, in a press conference Sunday, noted that enthusiasm from residents over Whitefish employees coming to the island had shifted to resentment after media reported the details of the contract.
“As soon as this whole issue was interpreted by the tabloids that PREPA has given away $300 million to a company with little experience … if you read that, and you have no light and no water that perception changes abruptly to the extent that the last four days they’ve been throwing stones and bottles” at workers, Ramos said.
About 70 percent of Puerto Rico has been without electricity for over a month after the Category 4 storm with winds of up to 154 mph slammed into the island. Ramos says the cancellation will delay pending work by 10 to 12 weeks but will not affect current work.
Even the federal disaster response agency has backed off from the Whitefish deal, with FEMA officials issuing a statement last week that the awarding process was in the hands of PREPA alone.
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