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FEMA cites ‘significant concerns’ with Puerto Rico power contract

NEW YORK TIMES

Students arrive at Dr. Francisco Hernandez y Gaetan, a public elementary school that still lacks power, in San Juan, Puerto Rico, on Oct. 24. FEMA said this week it has “significant concerns” about how a tiny Montana company won a contract for up to $300 million to rebuild part of Puerto Rico’s hurricane-ravaged electrical grid.

The federal government’s disaster relief agency said today that it had “significant concerns” about how a tiny Montana company won a contract for up to $300 million to rebuild part of Puerto Rico’s hurricane-ravaged electrical grid.

The Federal Emergency Management Agency, which normally would help pay for storm recovery, warned that it might refuse to pay for any improper contract between Whitefish Energy and the Puerto Rico Electric Power Authority, or PREPA.

“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,” the federal agency said in a statement.

In a copy of a contract circulating online, whose authenticity has not been verified, the power authority “represents and warrants that FEMA” approved the deal. But in its statement, FEMA said, “Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate.”

Neither Whitefish nor the power authority, a public agency, immediately replied to requests for comment.

Members of Congress and the Department of Homeland Security are already looking into the deal. On Thursday, the House Committee on Natural Resources, which oversees Puerto Rican affairs, sent a letter to the power authority, demanding all records connected to the contract. On the same day, the Inspector General’s Office of Homeland Security revealed that it was also investigating.

Critics have raised questions about why the power authority opted not to request aid from mainland utilities after Hurricane Maria struck the territory, knocking out power to almost all customers, on Sept. 20. After natural disasters, power companies on the mainland often get help from other power companies under mutual-aid agreements.

Officials of the Puerto Rican utility have said that contractors are reluctant to work with it because it is under bankruptcy protection. They said that Whitefish, a 2-year-old company that had only two full-time employees until last month, won the contract because it was willing to do the work and react quickly.

The company is based in Whitefish, Montana, home of Ryan Zinke, the Interior secretary and former member of Congress. Zinke and Andy Techmanski, chief executive of Whitefish Energy, know each other, and the secretary’s son worked on a Whitefish job over the summer. Both the company and the Interior Department say the connections had nothing to do with Whitefish getting the Puerto Rico contract.

© 2017 The New York Times Company

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