Whitefish Energy Contract Bars Government from Auditing Deal

October 27, 2017
John Bowden

A deal reached between the government and a small Montana energy company located in Interior Secretary Ryan Zinke's hometown prohibits the government from reviewing labor costs or profits related to the company's relief efforts in Puerto Rico, according to a leaked copy of the contract.

copy of the deal highlighted by reporter Ken Klippenstein reveals that the government isn't allowed to "audit or review the cost and profit elements" under the agreement, allowing the company greater discretion and secrecy for how it spends the $300 million to restore power to the island. Puerto Rico is rebuilding after two major hurricanes wiped out most of the island's electrical grid.

Whitefish signed the deal with the Puerto Rico Electric Power Authority (PREPA), which also prohibits the government from making "any claim against Contractor related to delayed completion of work."

Whitefish has been the target of heavy criticism over questions as to why the small company, which only had two full-time employees when the storm struck, was selected for such a lucrative government contract to help clean up the island.

Two House committees and a federal watchdog have all opened investigations into the deal. San Juan Mayor Carmen Yulín Cruz has called for the deal to be voided and investigated after representatives for the company feuded with her on Twitter and asked her if she wanted them to stop working.

“We’ve got 44 linemen rebuilding power lines in your city & 40 more men just arrived. Do you want us to send them back or keep working?” Whitefish Energy tweeted to the mayor Wednesday.

“They are threatening not to do their job which frankly is quite irregular for a company hired to the work for the public sector,” she tweeted in response.

“The contract should be voided right away and a proper process which is clear, transparent, legal, moral and ethical should take place," Cruz added in comments to Yahoo News.

Republicans on the House Natural Resources Committee have also raised questions about the scope of the deal.

“The size and terms of the contract, as well as the circumstances surrounding the contract’s formation, raise questions regarding PREPA’s standard contract awarding procedures,” Reps. Rob Bishop (R-Utah) and Bruce Westerman (R-Ark.) wrote Thursday.

Whitefish said Thursday that it welcomes the investigations.

"Whitefish Energy appreciates the efforts of the committees to gather information so that they have confidence in the overall process to support the people of Puerto Rico as well Whitefish Energy’s capabilities and commitment to deliver on the contract to help restore power and a sense of normalcy for the people of Puerto Rico," it said.

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