The Slatest

Small Company With Connections to Trump Administration Wins $300 Million Puerto Rico Recovery Contract

Residents wait as soldiers unload food and water provided by FEMA in a neighborhood still without electricity or running water on Oct. 17 in San Isidro, Puerto Rico.

Mario Tama/Getty Images

A tiny, 2-year-old energy company from a small town in Montana won a $300 million contract to fix Puerto Rico’s hurricane-ravaged power grid, raising concerns about the decision-making behind the lucrative deal and the company’s ties to people connected to the Trump administration, as well as the company’s ability to fully meet Puerto Rico’s recovery needs.

Whitefish Energy, which at the time of the Hurricane Maria’s landfall had only two full-time employees, now has by far the largest contract of any company involved in Puerto Rico’s recovery, and, according to reporting from the Daily Beast, is primarily financed by a firm run by a major Trump donor who has connections to several members of his administration.

The contract has also raised eyebrows because the company is based in Whitefish, Montana, the hometown of Interior Secretary Ryan Zinke (population: 7,436). Zinke’s office told the Washington Post that Zinke knows the company’s CEO because the town is a place where “everybody knows everybody” but that Zinke had no role in the deal. A member of the Puerto Rico House of Representatives, Luis Vega Ramos, told the Daily Beast that connections to Zinke and Puerto Rico Gov. Ricardo Rosselló were Whitefish’s “most important expertise and assets.” Vega Ramos accused Whitefish of being a “glorified middleman” that crafted a “cozy sweetheart deal” to make money off subcontracting.

Whitefish Energy, which says it now has 280 workers in Puerto Rico and is growing by 10 to 20 subcontractors a day, has taken on the Herculean task of restoring power to an island where the vast majority of citizens are still without electricity more than a month after the hurricane. The cash-strapped territory will spend $490 million on the initial phase of the power grid repairs, according to Rosselló.

The $300 million Whitefish contract sets hourly rates at $330 for site supervisors and $227 for journeyman linemen, with rates even higher for subcontractors: $462 per hour for supervisors and $319 for linemen. It also includes $332 nightly fees for each worker and $80 a day for food.

The territory is expected to run out of funds soon, and even if the House’s $4.9 billion aid package passes, it may still need more funds as soon as three months after, according to the Post.

The executive director of Puerto Rico’s power authority said Whitefish was hired because it was the first company “available to arrive” and the first to accept the power authority’s terms and conditions. According to the Post, however, the deal—reached through private discussions rather than a formal bidding process—was agreed upon six days after Maria. In contrast, when Hurricane Irma threatened Florida in September, the state’s power authority took advantage of a type of procedure normally used in emergencies requiring utility companies to help restore services, and it requested that aid before the hurricane even hit. As a result, nearly 20,000 restoration workers deployed immediately after the storm.

The executive director of Puerto Rico’s power authority blamed the scrutiny and criticism of the Whitefish contract on jealousy from other companies.

The U.S. House Committee on Natural Resources is examining the company’s role in the recovery, a committee spokesman told reporters.