Ethics

The FBI is Investigating the Whitefish Contract

JM Ashby
Written by JM Ashby

Puerto Rico Governor Ricardo Rossello ordered the island's Electric Power Authority (PREPA) to cancel the $300 million contract with Whitefish Energy yesterday and, according to the Wall Street Journal, the FBI is now investigating the circumstances of the contract.

Agents from the FBI’s San Juan field office are looking into circumstances surrounding the deal the public-power monopoly known as Prepa signed with Whitefish Energy Holdings LLC, according to three people familiar with the matter. [...]

The Federal Emergency Management Agency, multiple congressional committees and local auditors also have raised concerns and begun requesting documents about the deal.

A spokeswoman for Gov. Rosselló said he “welcomes any investigation by the federal authorities and he has been clear: there should be an investigation on this matter, and if there is any wrongdoing, the persons responsible should be prosecuted to the full extent of the law.”

It seems unlikely that the FBI would get involved unless they already had a good reason to, but it's also possible they're just covering their bases.

For his part, PREPA chief Ricardo Ramos has said things that seem awkward and suspicious if not necessarily illegal. Ramos says Whitefish contacted him days before Hurricane Maria even hit the island, which seems a little odd, but he has also said five other companies contacted him before he handed the contract to Whitefish for similar rates.

So, why Whitefish? If five other companies charging similar rates contacted him, why hand the $300 million contract to a two-person company that has never handled a contract bigger than $1.3 million?

Awarding the contract to Whitefish may not have been illegal, but it also seems reasonable to think the Power Authority may not have done its due diligence.

  • Aynwrong

    IRS, Fast and Furious, Solyndra, Saluting while holding coffee, Tan Suit Gate, Obama using Dijon mustard on a friggen hot dog etc, etc, etc..,

    This is what a damned scandal looks like.

  • Dread_Pirate_Mathius

    What I’ve heard is that Whitefish is the only company that offered to start work without an upfront payment. For cash-strapped Puerto Rico, that could have been very valuable. Like being roped into buying a more expensive car than you wanted because it had zero-down at signing.

    That said, while I believe that may be true, there is zero chance that it’s anything more than a side-note. This was corruption, pure and simple. And if it doesn’t trace back to Zinke, I’ll eat @muselet:disqus hat.

    PS: Even though they’ve been fired, they’re claiming around $9.8mm in expenses so far (which, per the contract, are unauditable!) and claim to expect an additional $10.9mm if expenses to extract workers and equipment (again, unaditable!). Hurray for cronie-captialism!

  • muselet

    This is a story that needs to be watched. Ryan Zinke insists he had no hand in a piddly, underqualified company from his hometown getting a big contract, and maybe he didn’t. But someone sure thought it was a good idea to funnel beaucoup de bucks to Whitefish Energy, and finding out who is a worthy mission for the FBI.

    I look forward to the cries of outrage from congressional Rs and Righty media.

    –alopecia

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