Dive Brief:
- The Wall Street Journal reports the Federal Bureau of Investigation has joined the list of parties looking into the $300 million contract Puerto Rico's utility awarded Whitefish Energy to repair its electrical system following Hurricane Maria, citing sources "close to the matter."
- Though the deal has now been canceled following outrage over some of its terms, that will not stop investigations focused on how the contract was awarded. At least two U.S. House of Representatives committees are looking into the issue, as is the Federal Emergency Management Agency, according to The Hill.
- Whitefish issued a statement saying it was "disappointed" in the cancellation, but it is not clear what if any action the company intends to take. According to Politico, Whitefish has hired former Rep. Dennis Cardoza, a Democrat from California, to lobby its case on Capitol Hill.
Dive Insight:
Cardoza was a Blue Dog Democrat who now works with Foley & Lardner LLP, where he lobbies for clients in the health care, natural resources and real estate sectors. Politico reports he is still in the process of filing lobbyist registration information related to Whitefish, but despite that, the company has been a client for some time.
The Puerto Rico Electric Power Authority (PREPA) reportedly hired Whitefish to head up restoration efforts before Maria made landfall, according to the Washington Post.The small Montana company has credited its hustle, staying in contact with the utility and a willingness to go to work without a substantial down payment as reasons it was awarded the contract. But as details emerged about the contract, an intense backlash emerged last week.
The contract began attracting serious scrutiny last week, particularly over its employee per-diem in excess of $400 and a passage that stipulates that, "In no event shall [government bodies] have the right to audit or review the cost and profit elements."
The backlash led to PREPA CEO Ricardo Ramos announcing on Sunday the utility would cancel the contract. Instead, Puerto Rico will look to mutual aid agreements with New York and Florida to help rebuild the the grid, NBC News reports.
Whitefish issued a sattement saying "we are very disappointed ... the decision will only delay what the people of Puerto Rico want and deserve – to have the power restored quickly in the same manner their fellow citizens on the mainland experience after a natural disaster."
The company said it would complete any work that PREPA requested, and highlighted some of its accomplishments since its workers arrived Oct. 2.
The company said its workers "completed significant work on two major transmission lines that crossed over the mountains of Puerto Rico and some critical work on very remote parts to the south which are only accessible by helicopter and heavy equipment." Whitefish said it restored power to hospitals, businesses and residents in the city of Manati. And another half million residents in San Juan will have power "very shortly" due to work Whitefish has done on the island's transmission system.
Despite the progress, it has been about six weeks since Hurricane Maria battered the island and roughly 70% of residents are still without power.
Reuters reported yesterday that federal efforts to repair the grid are being led by the U.S. Army Corps of Engineers, which has decided to increase the size of a contract awarded to Fluor Corp. The Corps will commit $840 million to the recovery bill, up from $600 million.
