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Report: FBI Probing $300 Million Whitefish Contract

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The FBI is reportedly probing the canceled contract awarded to the Montana-based Whitefish Energy to repair Puerto Rico's electrical grid. The contract was rescinded amid scrutiny over whether Whitefish was qualified to handle the emergency task.

On Oct. 30, The Wall Street Journal reported that the FBI office in San Juan was investigating how and why the Puerto Rico Electric Authority awarded Whitefish a $300 million contract to rebuild the island's devastated power grid, according to CBS News.

Carlos Osorio, spokesperson for the FBI's office in San Juan, told CBS News he was not aware of any probe into the Whitefish contract.

On Sept. 20, Hurricane Maria made landfall in the U.S. territory and wiped out the island's energy infrastructure. On Oct. 19, Whitefish signed a contract to rebuild Puerto Rico's electrical grid. Whitefish is a 2-year-old company that only had two full-time employees when PREPA awarded it the contract.

PREPA chair Ricardo Ramos told local media that the agency chose Whitefish because it could mobilize swiftly and did not demand payment upfront, according to Vox.

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On Oct. 27, FEMA expressed concerns over the Whitefish contract, asserting that the energy company did not appear to be experienced enough to merit the $300 million price tag, according to The Hill.

"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 a statement.

On Oct. 29, Puerto Rican Gov. Ricardo A. Rossello announced during a press conference that he had asked PREPA to cancel the Whitefish contract.

"I am making this determination because it is in the best interest of the people of Puerto Rico," Rossello said, according to The New York Times.

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Ramos disclosed that PREPA had paid Whitefish roughly $20.8 million for work the company already completed and would compensate the company for withdrawing its resources from Puerto Rico.

Whitefish is based in Whitefish, Montana, the hometown of Interior Secretary Ryan Zinke. Zinke has denied any participation in the company's contract with PREPA.

On Oct. 25, Whitefish retained former Democratic Rep. Dennis Cardoza and his law firm Foley & Lardner LLP to lobby on its behalf in Congress. Cardoza is the first lobbyist the Montana-based company has registered, Politico reports.

As of Oct. 27, roughly 72 percent of energy consumers in Puerto Rico were without power, according to The Hill.

Sources: CBS News, The HillThe New York Times, Politico, Vox / Feature Image: Joshua DeMotts/U.S. Department of Defense / Embedded Images: Michelle Gonzalez via Chief National Guard Bureau/Flickr, Gage Skidmore/Flickr

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