US & World

Why Puerto Rico wants to cancel its $300 million Whitefish contract

A U.S. Army serviceman gives bottled water to residents affected by Hurricane Maria in Barranquitas, Puerto Rico, on October 23, 2017.
A U.S. Army serviceman gives bottled water to residents affected by Hurricane Maria in Barranquitas, Puerto Rico, on October 23, 2017.
RICARDO ARDUENGO/AFP/Getty Images

Puerto Rico's governor on Sunday demanded that the board of the island's power company cancel the $300 million contract with Whitefish Energy Holdings amid increased scrutiny of the Montana company's role in Hurricane Maria recovery efforts.

The announcement by Gov. Ricardo Rossello comes as federal legislators seek to investigate the contract awarded to the small company from Interior Secretary Ryan Zinke's hometown.

A man descends a makeshift ladder from a broken bridge spanning the Vivi River on October 20, 2017 in Utuado, Puerto Rico. The bridge was washed away during Hurricane Maria and makeshift ladders are the only way for residents of Rio Abajo to access Utuado.
A man descends a makeshift ladder from a broken bridge spanning the Vivi River on October 20, 2017 in Utuado, Puerto Rico. The bridge was washed away during Hurricane Maria and makeshift ladders are the only way for residents of Rio Abajo to access Utuado.
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"There cannot be any kind of distraction that alters the commitment to restore electrical power as soon as possible in Puerto Rico," Rossello said, adding that at least $8 million has been paid to Whitefish so far.

Neither Whitefish nor power company officials immediately returned messages for comment.

Rossello said he has requested that power crews from New York and Florida come help restore power in Puerto Rico and he criticized the U.S. Army Corps of Engineers for not meeting its goals. The agency could not be immediately reached for comment.

A man sits on the edge of a broken bridge spanning the Vivi River on October 20, 2017 in Utuado, Puerto Rico. The bridge was washed away during Hurricane Maria.
A man sits on the edge of a broken bridge spanning the Vivi River on October 20, 2017 in Utuado, Puerto Rico. The bridge was washed away during Hurricane Maria.
Mario Tama/Getty Images

Roughly 70 percent of the island remains without power more than a month after Hurricane Maria struck the U.S. territory on Sept. 20 as a Category 4 storm with winds of up to 154 mph (245 kph). Power company Director Ricardo Ramos has said that Puerto Rico's Electric Power Authority reached a deal with Whitefish just days before the hurricane struck. He also said that the Federal Emergency Management Agency had approved of the deal, something the agency has denied.

FEMA said this week that it has not approved any reimbursement requests from the power company for money to cover repairs to the island's electrical system. The contract said the utility would not pay costs unallowable under FEMA grants, but it also said, "The federal government is not a party to this contract."

The mayor of San Juan, Carmen Yulin, walks over debris from Hurricane Maria during a visit with U.S. Sen. Bernie Sanders to the Playita community in San Juan, Puerto Rico, on October 27, 2017.
The mayor of San Juan, Carmen Yulin, walks over debris from Hurricane Maria during a visit with U.S. Sen. Bernie Sanders to the Playita community in San Juan, Puerto Rico, on October 27, 2017.
RICARDO ARDUENGO/AFP/Getty Images

FEMA has raised concerns about how Whitefish got the deal and whether the contracted prices were reasonable. The 2-year-old company had just two full-time employees when the storm hit, but it has since hired more than 300 workers.

A resident rides a horse along a road that was hit by a mudslide during Hurricane Maria on October 21, 2017 in Utuado, Puerto Rico.
A resident rides a horse along a road that was hit by a mudslide during Hurricane Maria on October 21, 2017 in Utuado, Puerto Rico.
Mario Tama/Getty Images

A Whitefish contract obtained by The Associated Press found that the deal included $20,277 an hour for a heavy lift Chinook helicopter, $650 an hour for a large crane truck, $322 an hour for a foreman of a power line crew, $319 an hour for a journeyman lineman and $286 an hour for a mechanic. Each worker also gets a daily allowance of $80 for food, $332 for a hotel room and $1,000 for each flight to or from the mainland.

An aerial view of houses affected by Hurricane Maria in Naranjito, Puerto Rico, on October 23, 2017.
An aerial view of houses affected by Hurricane Maria in Naranjito, Puerto Rico, on October 23, 2017.
RICARDO ARDUENGO/AFP/Getty Images