The FBI is investigating Whitefish Energy Holdings’ now-canceled contract with the Puerto Rico Electric Power Authority (PREPA), the Wall Street Journal reported Monday.
The FBI’s San Juan field office is “looking into circumstances surrounding the deal,” the Journal reported, citing three unnamed people familiar with the matter.
Whitefish’s contract was canceled Sunday amid increasing scrutiny of the contract’s extremely generous terms, its restriction against government auditing of its “cost and profit elements” and the lack of approval by the Federal Emergency Management Agency, despite the contract stating that FEMA needed to sign off on the deal.
PREPA’s executive director, Ricardo Ramos, told the Journal that the language requiring FEMA’s authorization of the contract’s terms had mistakenly been left in the contract.
“By executing this contract, PREPA hereby represents and warrants that FEMA has reviewed and approved of this Contract, and confirmed that this Contract is in an acceptable form to qualify for funding from FEMA or other U.S. Governmental agencies,” the contract read. FEMA said Friday that it had offered no such approval.
The contract noted that, even without securing “approvals or funding from FEMA or some other source,” PREPA would still owe Whitefish for its work. PREPA effectively filed for bankruptcy in July.
Puerto Rico Gov. Ricardo Rossello said prior to the contract’s cancellation that Whitefish had been paid $8 million, the Associated Press reported.
Whitefish was two years old and had two full time employees when it inked the deal with PREPA. About 70 percent of Puerto Rico is still without power.
