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Fishy Deal in Puerto Rico Where Two Man Firm Wins $300 Million Contract

It appears corruption  and nepotism is still alive in Puerto Rico. A tiny firm with connections to a Chumph Cabinet member gets a massive contract…

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Small Montana firm lands Puerto Rico’s biggest contract to get the power back on

For the sprawling effort to restore Puerto Rico’s crippled electrical grid, the territory’s state-owned utility has turned to a two-year-old company from Montana that had just two full-time employees on the day Hurricane Maria made landfall.

The company, Whitefish Energy, said last week that it had signed a $300 million contract with the Puerto Rico Electric Power Authority to repair and reconstruct large portions of the island’s electrical infrastructure. The contract is the biggest yet issued in the troubled relief effort.

Whitefish said Monday that it has 280 workers in the territory, using linemen from across the country, most of them as subcontractors, and that the number grows on average from 10 to 20 people a day. It said it was close to completing infrastructure work that will energize some of the key industrial facilities that are critical to restarting the local economy.

The power authority, also known as PREPA, opted to hire Whitefish rather than activate the “mutual aid” arrangements it has with other utilities. For many years, such agreements have helped U.S. utilities — including those in Florida and Texas recently — to recover quickly after natural disasters.

The unusual decision to instead hire a tiny for-profit company is drawing scrutiny from Congress and comes amid concerns about bankrupt Puerto Rico’s spending as it seeks to provide relief to its 3.4 million residents, the great majority of whom remain without power a month after the storm.

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“The fact that there are so many utilities with experience in this and a huge track record of helping each other out, it is at least odd why [the utility] would go to Whitefish,” said Susan F. Tierney, a former senior official at the Energy Department and state regulatory agencies. “I’m scratching my head wondering how it all adds up.”

PREPA’s executive director, Ricardo Ramos, and a spokesman did not respond to emails asking why the utility didn’t activate the mutual-aid network. On a tour of the idled Palo Seco power plant, Ramos told reporters that Whitefish was the first company “available to arrive and they were the ones that first accepted terms and conditions for PREPA.”

Ramos said that the utility is “completely content” with the work Whitefish is doing. “The doubts that have been raised about Whitefish, from my point of view, are completely unfounded,” he added, saying that concerns about Whitefish were probably spread by jealous competitors.

Whitefish officials have said that the company’s expertise in mountainous areas makes it well suited for the work and that it jumped at the chance when other firms were hesitating over concerns about payment. The company acknowledges it had only two full-time employees when Maria struck but says its business model calls for ramping up rapidly by hiring workers on short-term contracts.

Spokesman Chris Chiames dismissed criticism about the company’s qualifications. “We are taking personal risks and business risks working in perilous physical and financial conditions,” Chiames said. “So the carping by others is unfounded, and we stand by our work and our commitment to the people of Puerto Rico.”

 
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Posted by on October 24, 2017 in American Greed

 

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