FBI investigating Whitefish deal: report

The FBI is reportedly investigating the $300 million contract awarded to Whitefish Energy to repair Puerto Rico’s electrical grid in the wake of Hurricane Maria.

People familiar with the matter told The Wall Street Journal that FBI agents from the San Juan field office are examining the deal and how Whitefish and the Puerto Rico Electric Power Authority (PREPA) came to the agreement.

Neither the FBI nor Whitefish responded to requests for comment.

The report comes after Puerto Rico’s state-run electric utility said Sunday it had accepted the governor’s request to immediately cancel its contract with Whitefish, a small Montana-based energy firm headquartered in Interior Secretary Ryan Zinke’s hometown.

{mosads}During a Sunday press conference, Gov. Ricardo Rosselló called for PREPA to “immediately” cancel the deal, which was made in September, shortly after the hurricane hit the island.

At the time the storm hit, Whitefish reportedly had only two full-time employees. The deal drew scrutiny, with critics arguing the firm didn’t have experience working on such a large-scale project and that its contract with PREPA was improper, pointing to a provision that sought to limit the government’s right to audit Whitefish.

The FBI is just the latest government body to probe the Whitefish deal.

Both the House Energy and Commerce and Natural Resources Committees launched investigations last week, as did the inspector general for the Department of Homeland Security, which has jurisdiction over the Federal Emergency Management Agency (FEMA). Puerto Rico’s own government is also reviewing how the contract came about.

The Trump administration has sought to distance itself from the contract. Zinke said last week he had nothing to do with it in a forceful statement Friday, while FEMA said it did not approve the deal. 

The utility agreed to the deal with Whitefish without a competitive bidding process, which is allowable under FEMA regulations in emergencies. Whitefish CEO Andy Techmanski said he reached out to the utility via LinkedIn, and PREPA officials said they chose Whitefish because it didn’t require a large down payment, unlike most mainland utilities.

Whitefish and PREPA have consistently defended the deal and said there was nothing illegal or improper about it.

“There’s nothing illegal here … Of that, we’re sure,” PREPA CEO Ricardo Ramos said Sunday in announcing the end of the contract. “The process was done according to the law.”