A tiny utility company made up of two employees connected to a prominent Trump campaign donor as well as Trump's Interior Secretary, Ryan Zinke, received a $300 million payday with a massive contract to help rebuild Puerto Rico's infrastructure.
The young and unheard of two-year-old company, Whitefish Energy Holdings, was awarded Puerto Rico's biggest contract last month, with the gargantuan task of restoring Puerto Rico's power. This has raised numerous questions of concern regarding political favoritism and the overlooking of other, more equipped utility companies.
Whitefish, a private, for-profit infant utility company from Montana reportedly had only two employees when Hurricane Maria laid devastation to Puerto Rico, and yet the Puerto Rico Electric Power Authority (PREPA) chose them to restore electricity to the island's 3 million residents. In awarding this contract, PREPA chose not to activate "mutual aid" arrangements with other, larger utilities, which are more commonly used following natural disasters - including Texas and Florida.
Whitefish claimed this week that they have in fact 280 workers currently on the island, most of them subcontracted from across the country, with that list growing every day. The company further claims it is already close to completing infrastructure that will restore power to key industrial facilities. Yet as of Tuesday, a month since PREPA signed the contract with Whitefish, only 75 percent of the island has power.
According to The Washington Post, Whitefish's contract entails the following rates:
- $330 per hour for a site supervisor
- $227.88 per hour for a "journeyman lineman"
- $462 per hour for a subcontractor supervisor
- $319.04 per hour for a subcontractor lineman
- $332 per worker per day for nightly accomodation
- $80 per worker per day for food
The contract was awarded without a competitive bidding process, which has raised ethical and legal concerns with capital San Juan Mayor Carmen Yulin Cruz, who described the contract as "alarming."
“The contract should be voided right away and a proper process which is clear, transparent, legal, moral, and ethical should take place,” Yulin said.
“It seems like what the Puerto Rican people are going to be paying for, or the American people are going to be paying for, is an intermediary that doesn’t know what is at stake here and that really has to subcontract everything,” she said of Whitefish. “What we need is somebody that can get the job done and that has the expertise to get the job done.”
FEMA and the U.S. Army Corps of Engineers have distanced themselves from the Whitefish contract.
Puerto Rico governor Ricardo Rossello defended PREPA's deal, saying it was necessary to hire Whitefish to ensure they would have utility workers in place quickly, even though the other mutual aid utilities already had workers ready to deploy. Rossello said his administration will review PREPA's hiring practices at a later time.
The Washington Post describes PREPA's decision to hire the tiny, for-profit company as unusual, and says that it is drawing scrutiny from Congress.
“The fact that there are so many utilities with experience in this and a huge track record of helping each other out, it is at least odd why [the utility] would go to Whitefish,” said Susan F. Tierney, a former senior official at the Energy Department and state regulatory agencies. “I’m scratching my head wondering how it all adds up.”
Democratic Senator Maria Cantwell, the ranking member of the Senate Energy and Natural Resources Committee, demanded on Tuesday that there be an investigation: "Today I am calling on the Government Accountability Office to investigate the circumstances surrounding the multi-million dollar contract awarded to Whitefish Energy -- a brand new company with two employees."
The Daily Beast reports that Whitefish is financed by a private-equity firm founded by a Joe Colonnetta, who contributed multiple large donations to President Donald Trump's election campaign. Colonnetta's wife, Kimberly also gave $33,400 to the Republican National Committee, the maximum contribution permitted, shorty after Trump's victory.
Of Whitefish's two known employees, The Washington Post found that Chief Executive Officer Andy Techmanski is close friends with Trump administration Interior Secretary Ryan Zinke. Whitefish Energy, Techmanski, and Zinke all hail from their hometown of Whitefish, Montana. One of Zinke's sons has previously worked for Techmanski.
Luis Vega-Ramos, member of the Puerto Rico House of Representatives, told The Daily Beast, “Whitefish’s most important expertise or assets seems to have been… having the U.S. secretary of the interior, Ryan Zinke, as their former congressman and current ally and having the wisdom to retain the services of key people close to the governor [of Puerto Rico].”
Kimberly Colonnetta also seems to have familiar connections with others in the Trump administration, namely Ben Carson and Trump Secretary of State Rex Tillerson.
“Whitefish seems to be nothing more than a glorified middleman to get the real providers of the services, with which PREPA [the Puerto Rico Electric Power Authority] could have contracted directly,” Vega-Ramos said. “It is a cozy sweetheart deal in which Whitefish gets a gratuity for subcontracting the actual providers.”
In all of this, nothing has been said by PREPA, Whitefish, or the Puerto Rico governor, in regard to Elon Musk's involvement in restoring power to the island. His company Tesla, as well as Google and Amazon are reportedly attempting to make up the shortfall in government aid. Musk provided solar panels and batteries to help provide power to a children's hospital, with many more projects promised.