Trump administration rushes to distance itself from Whitefish Energy's contract with Puerto Rico

Key Points
  • Questions are swirling in Washington about how Whitefish Energy, a two-person company in Montana, won a $300 million contract to rebuild Puerto Rico's hurricane-ravaged electrical grid.
  • On Friday, both the White House and Interior Secretary Ryan Zinke sought to distance themselves from the contract, which was signed by Whitefish and Puerto Rico's public utility company.
  • Zinke also said he welcomes "any and all investigations," which he promised would prove he had "no involvement" in the contract.
FEMA has 'significant concerns' about Whitefish's contract to rebuild Puerto Rico's electric grid
FEMA has 'significant concerns' about Whitefish's contract to rebuild Puerto Rico's electric grid

A $300 million contract recently awarded to a small Montana electrical company is threatening to become a big headache for the Trump administration.

Whitefish Energy, based in tiny Whitefish, Montana, had two full-time employees on Sept. 20, the day Hurricane Maria devastated Puerto Rico and destroyed much of the island's electrical grid.

But barely a month after the storm, on Oct. 19, Whitefish Energy announced that it had won a contract from the Puerto Rico Electric Power Authority (PREPA) to rebuild the island's electrical system.

The company claims that it won the contract, worth $300 million, in part due to its expertise in working on difficult terrain. It also said its business model is designed to rapidly scale up its workforce with subcontractors.

U.S. Secretary of the Interior Ryan Zinke talks to reporters before departing Kanab Airport on May 10, 2017 in Kanab, Utah. Zinke has been in the state of Utah since Sunday talking with state and local officials and touring the Bears Ears National Monument.
Getty Images

But questions about precisely how the contract was procured, and whether the company has any ties to another Whitefish native, Interior Secretary Ryan Zinke, are now the subject of multiple investigations, including two by Congress and another by the Federal Emergency Management Administration.

On Friday, questions about the contract reached all the way up to the White House, where press secretary Sarah Huckabee Sanders said the president had personally asked the interior secretary about the deal.

Since Whitefish Energy announced the PREPA contract last week, Zinke has categorically denied having anything to do with the small company winning such a lucrative deal. But this week, ties emerged between the interior secretary and Andy Techmanski, the CEO of Whitefish Energy, including that one of Zinke's sons had a summer job working for Techmanski.

On Friday, Zinke revealed that Whitefish Energy had contacted him at the Interior Department, but he said the contact occurred only after the company had won the contract with PREPA.

Zinke tweet

In the same statement, Zinke said, "I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico. Neither myself not anyone in my office has advocated for this company in anyway [sic]."

Hours before Zinke released his statement, President Donald Trump asked Zinke point-blank during a meeting at the White House whether he had anything to do with the tiny company winning such a large contract, Sanders later told reporters.

"He asked Zinke about Whitefish, and Zinke said the federal government, and specifically, he, had nothing to do with this," she said.

"This is a contract that was determined by the local authorities," she said. "The federal government has nothing to do with the contract or this process, and we'll look forward to seeing the results of an ongoing audit."

On Thursday, the contract itself was obtained by journalist Ken Klippenstein, who identified a number of unusual provisions in the deal, including a clause that bars the federal government from auditing the company's costs and profits.

Ken Klippenstein tweet

The growing questions about Whitefish Energy's contract have also attracted the interest of Congress. On Wednesday, the ranking members of the Senate's Energy and Natural Resources Committee, and the Finance committee sent a letter to the Government Accountability Office, requesting an investigation of the contract's costs and bidding process.The following day, the House Energy and Commerce Committee requested similar documents and an in-person briefing from Whitefish Energy.

In a statement Friday evening, House Minority Leader Nancy Pelosi, D-Calif., demanded that the Whitefish contract be terminated immediately, calling it "inexcusable."

Zinke, meanwhile, said he supports an investigation into any alleged ties between Whitefish Energy and himself.

"I welcome any and all investigations into these allegations, and encourage the Interior Department's Inspector General to investigate this matter fully," he said in a statement.

WATCH: PREPA worked through Irma into Maria

Workers have worked through Irma into Maria: PREPA CEO on power recovery
Workers have worked through Irma into Maria: PREPA CEO on power recovery