The FBI is Investigating the Whitefish Contract

SK Ashby
Written by SK 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.