$300 million Puerto Rico power deal now under government review


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Small power company lands $300M Puerto Rico contract

Whitefish Energy, the small Montana utility that won a $300 million contract to help restore power in Puerto Rico, issued an apology to San Juan Mayor Carmen Yulin Cruz after criticizing her on Twitter and threatening to pull workers from the city she represents.

“Mayor Cruz and everyone in Puerto Rico… we would like to apologize for our comments earlier today, which did not represent who we are and how important this work is to help Puerto Rico’s recovery,” the company posted on Twitter late Wednesday night.

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The apology came several hours after a public feud erupted between Whitefish and Yulin Cruz on the social media platform.

In an earlier interview with Yahoo News, the mayor had called the multimillion dollar contract awarded to Whitefish by the Puerto Rico Electric Power Authority “alarming.” She also pressed for the state-owned utility, known as PREPA, to cancel the contract immediately.

“The contract should be voided right away and a proper process which is clear, transparent, legal, moral and ethical should take place,” Yulin Cruz said of the two-year old electrical utility in the interview Tuesday.

Related: San Juan’s mayor takes on small Montana firm over Puerto Rico power contract

The contract has raised a few eyebrows given that the firm has ties to the Trump administration and it employed just two people at the time Hurricane Maria made landfall.

A White House spokesman told CNN the decision to give the contract to Whitefish was made exclusively by PREPA.

“The White House is not aware of any federal involvement in the selection,” White House spokesman Raj Shah said.

In response to the mayor’s comments, Whitefish spokesman Chris Chiames posted a statement on Twitter calling Yulin Cruz’s comments “misplaced.”

“We find her comments to be very disappointing and demoralizing to the hundreds of people on our team that have left their homes and families and have come here to help the people of Puerto Rico,” Whitefish tweeted Wednesday.

By the afternoon, the situation grew heated.

Yulin Cruz tweeted back: “If @WhitefishEnergy feels that asking for transparency is “misplaced”, what are they afraid we will find.”

“We’ve got 44 linemen rebuilding power lines in your city & 40 more men just arrived. Do you want us to send them back or keep working?,” the utility company replied.

Related: Questions swirl after small Montana firm lands Puerto Rico contract

“Threats received by @WhitefishEnergy. The implication is if I do not “play nice” they will not do their job. Nasty!,” the mayor tweeted back. She said Whitefish’s response implied it would not treat San Juan with the “diligence it deserves.”

Whitefish later posted it is committed to restoring power in Puerto Rico.

whitefish energy tweet

Yulin Cruz does not have authority over PREPA and the contracts it issues. She has long been a critic of Puerto Rico Governor Ricardo Rossello, who backed the Whitefish contract, and has criticized President Trump’s handling of relief efforts on the island.

In a letter to the Inspector General of the Department of Homeland Security, Rossello requested that the agency complete its review of the Whitefish contract by October 30.

Rossello also noted that he recently asked Puerto Rico’s Office of Management and Budget to audit the Whitefish contract in order to ensure it’s in compliance with all of the appropriate laws.

The agency’s inspector general told CNN they opened a review on the contract earlier this week following inquiries by the press and Capitol Hill and said it is one of their high priority cases.

They plan to look into whether the appropriate process was followed in awarding Whitefish the contract.

Thus far, it is the largest contract awarded to any company for relief efforts in the aftermath of Hurricane Maria.

A representative from the governor’s office was not immediately available for comment.

Whitefish received a backlash of criticism from Democrats after announcing last week that it won the contract to repair and reconstruct parts of the island’s electrical infrastructure.

Mayor Carmen Yulin Cruz
Mayor Carmen Yulin Cruz said the Whitefish Energy contract should be “voided.”

On Thursday, a House committee formally sent a letter to the head of PREPA requesting a review of the Whitefish contract. A second letter was also sent to the Government Accountability Office by the chairman and ranking member of a Senate committee to investigate the matter.

PREPA’s executive director, Ricardo Ramos, told reporters during a press conference last week the cash-strapped island chose Whitefish because it didn’t require a big deposit upfront. The other previously unnamed contender, Power Security, wanted a $25 million down payment for the work, Ramos said.

“In that moment, we were not in a position to offer that collateral,” said Ramos. “The other company did not ask for a guarantee of payment.”

In an interview with CNN on Thursday, Ramos said he had no regrets about picking Whitefish out of the seven companies he spoke with about working on the recovery efforts.

“If we went back in time, I would do it all over again,” Ramos said.

But some on Capitol Hill are concerned that Whitefish may have stood out for another reason.

The tiny utility company is based in Whitefish, Montana, which also happens to be the hometown of Interior Secretary Ryan Zinke.

Both Zinke and Whitefish CEO Andy Techmanski acknowledge knowing one another. Zinke’s office described Whitefish as a “small town” with a population of roughly 6,000 people. One of the secretary’s sons “joined a friend who worked a summer job at one their [Whitefish’s] construction sites.”

Related: FEMA just got another $6.7 billion to help with hurricane relief

Whitefish spokesman Ken Luce confirmed an Oct. 1 report by NBC Montana, which quoted Techmanski as saying he reached out to Zinke after winning the contract to help get resources to the island more quickly,

But Luce told CNN that the company did not make any requests to the administration before the contract was signed on Sept. 26.

weir power andrew techmanski
Whitefish Energy’s CEO Andy Techmanski.

“The secretary had absolutely nothing to do with Whitefish getting the contract,” he said.

Techmanski, who has described the firm as specializing in “difficult and mountainous terrain projects,” has downplayed any ties to the administration.

“All I can say is, we took the call and we’re here,” Techmanski told CNN Friday, referring to a call from director Ramos. “We called each other.”

PREPA, which is $9 billion in debt, could have requested aid after Maria through the American Public Power Association, a network that provides help to other utilities during widespread power outages. That’s what Texas and Florida did after Hurricanes Harvey and Irma.

Ramos told CNN on Thursday that the closest states to Puerto Rico were already dealing with their own aftermath of earlier hurricanes and he believed they would not be able to respond quickly to the island’s needs. The bankrupt utility also couldn’t afford to cover the costs of utilizing the network either, he added.

Related: Misery in Puerto Rico: No power, no job, ‘enormous lines’

Whitefish does have another tie to the administration.

HBC Investments, which was founded by a big Republican donor named Joe Colonnetta, backs the firm. Colonnetta and his wife donated more than $20,000 to Donald Trump’s presidential campaign and more than $30,000 to the Republican National Committee last year alone, according to a filing from the Federal Election Commission.

A representative for Colonnetta was not immediately available to comment on the donations.

Luce said the investment firm learned of Whitefish last summer through an unnamed mutual acquaintance in the energy industry.

“Techmanski is the type of entrepreneur HBC likes — a family guy with a good business plan,” Luce said, noting that the Whitefish CEO had previously managed contracts of up to $250 million.

Additional reporting by Rene Marsh, Gregory Wallace, Julia Jones and Martin Savidge.

CNNMoney (Washington) First published October 26, 2017: 4:32 PM ET


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