Congressional committees now investigating Puerto Rico contract award

Whitefish contract Puerto Rico

More than one congressional committee is investigating a $300 million contract awarded to a tiny Montana company helping to restore Puerto Rico’s damaged power grid.

Whitefish Energy Holdings, which had only two employees before Hurricane Maria struck the island, is based in Interior Secretary Ryan Zinke’s hometown of Whitefish, Montana.

The Puerto Rico Electric Power Authority (PREPA) awarded the $300 million contract to Whitefish just six days after the storm passed. Now, they report having more than 300 employees in Puerto Rico working on rebuilding the broken power grid.

Leaders in both the Natural Resources committee and the Energy and Commerce committee sent letters Thursday requesting documents from Whitefish and PREPA regarding the contract, saying that the quickly formalized contract award raises some troubling questions. 

Meanwhile, the Senate Energy and Natural Resources committee announced that it will hold a hearing on the issue. Two Democrats, Senators Maria Cantwell (D-WA) and Ron Wyden (D-OR) have also formally requested an investigation by the Government Accountability Office to review the bidding process, as well as the total contract amount.

In addition to Zinke’s relationship with Whitefish CEO Andy Techmanski, the larger concern is how such a small company was able to quickly raise the resources to hire hundreds of subcontractors. The company is funded by a private equity firm, HBC Investments, which is headed by a major donor to the President Trump’s election campaign, the Trump Victory PAC and other GOP candidates.

The specifics of the deal were reported by USA Today, and they show some eye-popping numbers.

PREPA’s contract with Whitefish, signed Oct. 17, calls for the company’s employees to be paid $330 hourly for a site supervisor, $227 per hour for a journeyman lineman, and $204 for a heavy equipment operator. The company is also charging $80 a day to feed and $332 to house each worker. Flights are charged at $1,000 in each direction. Subcontractors are paid significantly more: $462/hour for a supervisor, $319/hour for a journeyman lineman, and $286/hour for a heavy equipment operator.

Under the contract, PREPA is required to pay Whitefish within 10 days of its weekly invoices for time, materials and equipment rentals, up to a maximum of $300 million.