SAN JUAN, P.R. (TNS) — Puerto Rico Gov. Ricardo Rossello requested the cancellation of a $300 million contract to rebuild the island's hurricane-ravaged electrical grid that went to a tiny company based in Interior Secretary Ryan Zinke's Montana hometown.
Rossello asked the governing board of the Puerto Rico Electric Power Authority to invoke a cancellation clause in the deal with Whitefish Energy Holdings, according to a news release issued by the governor Sunday.
He said Puerto Rico is asking for help from New York and Florida to replace the expected reduction in repair brigades from the cancellation. Governors of the two states and Puerto Rico have already discussed sending workers and equipment to the U.S. territory, according to the news release.
Whitefish, which had just two full-time employees before beginning its work in Puerto Rico, was selected Oct. 19 by the power authority to lead the rebuilding of the grid, with the expectation that the money would come from the U.S. Federal Emergency Management Agency. FEMA is investigating the contract, as is the inspector general of FEMA's parent agency, the Department of Homeland Security.
Whitefish has defended its work, saying it was providing dozens of line workers when almost no other repair personnel were on the island. In a statement released Friday, the company said it would "respectfully ask that others await the facts before jumping to misinformed conclusions." It has said its CEO knows Zinke but that the Cabinet secretary had no role in the company or its work in Puerto Rico.
Zinke said on Twitter Friday that he "had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico. I welcome all investigations into the allegations." He said he was contacted by the company after the contract was awarded but "took no action."
Among Whitefish's investors is the Dallas-based HBC Investments. Joseph Colonnetta, founding and general partner of HBC, along with his wife donated about $70,000 to President Donald Trump's campaign and the Republican National Committee.
Puerto Rico filed for court protection from its creditors in May, giving up on negotiating with voluntary creditors after years of trying to work out a way to restructure debts of more than $70 billion. About two months later, officials put the power authority into similar court proceedings after they rejected a long-standing deal with lenders. The island's fiscal agency told a bankruptcy judge last month the hurricanes wouldn't derail court proceedings.
(Laura J. Keller contributed to this report.)