The FBI has opened a preliminary inquiry into Whitefish Energy’s $300 million contract to rebuild Puerto Rico’s power grid after Hurricane Maria, sources said.
FBI agents from the San Juan field office are looking into the controversial deal, according to a Wall Street Journal report that emerged one day after Puerto Rico Gov. Ricardo Rossello canceled the contract.
“There cannot be any kind of distraction that alters the commitment to restore electrical power as soon as possible in Puerto Rico,” Rossello said Sunday.
Whitefish, which had only two full-time employees when Hurricane Maria made landfall, raised eyebrows after a Washington Post report noted the company was based in the same hometown as Interior Secretary Ryan Zinke.
Zinke, whose son worked for the company one summer, issued a statement denying he had any involvement in the company’s deal with the Puerto Rico Electric Power Authority (PREPA).
The Whitefish contract, which was obtained and published by reporter Yanira Hernandez Cabiya, also sparked an outcry for including a provision that barred government agencies from auditing or reviewing the “cost and profit elements of the labor rates specified herein.”
The Federal Emergency Management Agency later issued a statement expressing “significant concerns” with how PREPA procured the contract, adding that it had not confirmed whether the pricing was reasonable.
To make matters worse, Whitefish Energy engaged in a Twitter feud with San Juan Mayor Carmen Yulín Cruz and threatened to withdraw its services from the island in response to her criticisms.
There are currently about 400 subcontracting crews on the island as 70 percent of the island remains without power six weeks after the storm.
A person familiar with PREPA’s operations said on Monday that Whitefish would complete work on critical lines despite the cancellation of the contract.
With News Wire Services.
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