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FEMA has 'significant concerns' about Whitefish's contract to rebuild Puerto Rico's electric grid

  • FEMA says it has "significant concerns" about the Puerto Rican power authority's contract with a tiny energy company to rebuild the island's electric grid.
  • The $300 million contract awarded to a small, two-year-old firm called Whitefish Energy has attracted scrutiny and calls for investigations.
  • Whitefish is based out of Interior Sec. Ryan Zinke's hometown in Montana.

The Federal Emergency Management Agency has "significant concerns" about a $300 million contract to rebuild parts of Puerto Rico's electric grid awarded to a tiny, two-year-old energy company with links to Interior Secretary Ryan Zinke.

FEMA, the nation's disaster response agency, on Friday said it was reviewing the contract that Whitefish Energy signed with the Puerto Rico Electric Power Authority. In a statement, FEMA said it was not involved in the decision, and warned that it might not reimburse the authority, known as PREPA, if the contract does not abide by federal requirements.

PREPA tapped Whitefish to restore electric infrastructure in the aftermath of Hurricane Maria, which knocked out 80 percent of the U.S. territory's transmission lines. Whitefish had just two employees when Maria struck the island.

"Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable," FEMA said in the statement.

"FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable," it said.

Whitefish and PREPA did not immediately respond to a request for comment.

The announcement on Friday adds another layer of scrutiny to the contract, which has been under a microscope ever since Whitefish announced it last week.

News reports have revealed that Zinke's son worked a summer construction job for Whitefish CEO Andy Techmanski. The company is based out of Whitefish, Montana, Zinke's hometown.

Though Zinke and Techmanski acknowledge knowing one another, the Interior Department and Techmanski both told the Washington Post the secretary played no role in Whitefish securing the contract.

On Thursday, the House Committee on Energy and Commerce requested documents related to the contract from Whitefish. The ranking Democrats on the Senate Energy and Natural Resources and Finance committees on Wednesday asked the Government Accountability Office to investigate the contract.

Puerto Rico Gov. Ricardo Rossello has also asked the Department of Homeland Security's inspector general to look into the deal.