FEMA Has ‘Significant Concerns’ About $300 Million Deal With Utility Company

Whitefish Energy workers work on power line towers in Barceloneta, Puerto Rico, Sunday, Oct. 15, 2017.(AP Photo/Ramon Espinosa)
Ramon Espinosa/AP

The Federal Emergency Management Agency (FEMA) is looking into how a contract between Puerto Rico and a tiny power company — whose CEO and partner are friendly with the Trump administration — was procured, according to a statement.

A small utility company in Montana signed a $300 million contract with the Puerto Rico Electric Power Authority (PREPA) to restore electricity to the U.S. territory. The deal raised eyebrows after the Weather Channel reported that the company, Whitefish Energy Holdings, is reportedly financed by major donors to President Donald Trump and has ties to the Trump administration.

In its statement Friday, FEMA clarified that it was not involved in hiring the company to restore power to the island and hasn’t provided any reimbursement to the PREPA yet for its contract with Whitefish.

“Based on initial review and information from PREPA, FEMA has significant concerns about how PREPA procured this contract and has not confirmed whether the contract prices are reasonable,” the statement said. “FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.”

FEMA officials said it is “important for all applicants for FEMA Public Assistance to understand and abide by” federal regulations for the funding, otherwise they risk not getting a reimbursement from the federal government.

“FEMA continues to focus on the expedited restoration of essential service in support of the governor’s recovery goals,” FEMA said.

Whitefish Energy is based in Secretary of the Interior Ryan Zinke’s hometown, and Zinke is friendly with the company’s CEO. A partner at Whitefish was also a major Republican donor. He gave a total of $74,000 to various Trump groups and another $30,700 to the Republican National Committee, the Daily Beast reported.

Both the governor of Puerto Rico and the mayor of the U.S. territory’s capitol city have spoken out about the contract, with San Juan Mayor Carmen Yulin Cruz calling for an investigation into the contract, sparking a Twitter war with the company, which later apologized for its comments.   

Puerto Rico Gov. Ricardo Rossello on Wednesday asked the Department of Homeland Security’s inspector general to conduct a review of the contract procurement and told ABC News there would be “hell to pay” if any corruption is uncovered in the audit.

Just two years old, Whitefish only had two full-time employees before being awarded the contract, ABC News reported.

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