The Justice Department is reportedly investigating the $300 million contract awarded to Whitefish Energy to repair Puerto Rico’s power grid in the wake of Hurricane Maria. The island’s governor canceled the contract over the weekend.
Agents from the FBI’s Puerto Rico field office are said to be examining how the Montana-based Whitefish and the Puerto Rico Electric Power Authority (PREPA) came to the agreement, according to the Wall Street Journal.
On Sunday, Puerto Rico’s Governor Ricardo Rossello called for the state-run electricity utility to “immediately” cancel the deal which was made in September, shortly after the Category 5 hurricane hit the island. The utility company complied.
Whitefish Energy Holdings said it was “very disappointed” with the cancellation, telling AP that it will only delay efforts to restore power to Puerto Rico. The company had brought 350 workers to the island and expected to have a total of 500 this week. They had completed critical work, including a project that will soon lead to half a million people in San Juan getting power, Whitefish spokesman Chris Chiames told AP.
The deal came under fire after media reports that the small-scale Montana energy firm, barely two years old, was based in Interior Secretary Ryan Zinke’s hometown. The company reported having two full-time employees when Hurricane Maria struck, and only recently hired more.
The deal has drawn the scrutiny of two US House committees and a federal watchdog, who are now examining the roles of PREPA and Whitefish in the deal to fix the island’s electric grid.
PREPA has defended the contract and said Whitefish was awarded the multi-million-dollar contract because they were the first to offer to help the storm ravaged territory without demanding significant advance payment, The Hill reported.
Puerto Rico recently filed for the biggest bankruptcy in US municipal history, with approximately $74 billion of bond debt and $48 billion of unfunded pension liabilities.
The Trump administration has denied any involvement with the Whitefish contract, saying it was a matter for the local government. On Friday, Secretary Zinke said he had nothing to do with it, while FEMA said it did had no role in approving the deal.
Hurricane Maria made landfall in Puerto Rico on September 20 as a Category 5 storm, and at one point left all 3.5 million inhabitants of the US territory without electricity. Roughly 70 percent of the island are still waiting for power to be restored.