PUBLISHED: 7:29 PM 30 Oct 2017

$300 MILLION Contract Cancelled As Puerto Rico & Congress Take Closer Look

Utility officials face the media after the Whitefish scandal.

Utility officials face the media after the Whitefish scandal.

Utility officials face the media after the Whitefish scandal.

In the aftermath of Hurricane Maria, the majority of Puerto Rico was left without power. Recovery efforts are going to be a massive undertaking, and this meant local officials were on the lookout for contractors to get to work. A small company in Montana became the focus of controversy as they landed a huge contract to help to restore electricity on the island. The two-man operation at Whitefish Energy Holdings hit it big with a $300 million agreement with the Puerto Rico Electric Power Authority (PREPA). However, that has ended as Congress and Puerto Rico have cancelled the contract and are taking a look.

Almost instantly, there were questions about how this small company from Montana would be able to handle the task of bringing power back to Puerto Rico. Government officials in Puerto Rico demanded answers as to how this small company came out of nowhere to land a big payday.

There were also concerns about the actual work being done on the island. Governor Ricardo Rosselló at one point stepped in to ask that the contract be voided. As of today, the head of PREPA has started the process to end the contract with Whitefish.

With all the bad press about the contracts, workers became easy targets for locals. To start to reconnect power, the company had begun flying in utility workers. As the worked on reconnecting power or doing something as simple as fixing broken power poles, locals began fighting against the efforts. As one point, the utility workers were being pelted with rocks and other materials as the tried to work.

Up to 70% of the island is still without power currently.

Up to 70% of the island is still without power currently.

While the Montana company will be paid for the work the projects they are currently handling, there will be no further work done under this contract. Their current work is scheduled to be finished by the end of November and will net the company about $20 million. This is not even 10% of the overall contracted amount.

The fact that a small two-person company was able to win a tremendous job like this was startling for many. There were complaints filled at all levels including the local government and even the White House. Federal agencies like FEMA also weighed in with their concerns. It seems no one had answers about how this contract started.

Richard Ramos, the head of PREPA, received pushback from FEMA officials as they shared that they were not authorizing any payments to the company. Ramos also fielded questions about unethical activities that may have been connected to the contract. The Whitefish company happens to be based in the hometown of Interior Secretary Ryan Zinke, which is Whitefish, Montana.

After being in business for two short years and only hiring two employees during that time, many asked if Zinke had pulled strings to win the contract. Zinke has denied any connection to the company beyond communication in the form of a letter that the company sent to Zinke after securing the deal.

Andy Techmanski, the CEO of Whitefish Energy, seemed to be confident in the overall business model of his company as he took questions about the possible help with securing the contract. According to Tachmanski, the company has a great deal of experience working in rough terrain and is also structured in a way that allows them to ramp up the numbers of workers available very quickly.

While Zinke contends there were no connections beyond both the men at one point living in Whitefish, local reporters broke the news that Zinke’s son once worked for Tachmanski. It is not clear if this is just something one might expect in a small town like Whitefish or if there was more of a connection than was let on.

Ending the contract with Whitefish cannot happen overnight, but local officials have started the process. Ramos is working to get the request to cancel the contract in front of the PERPA board for approval. Once this is granted the company must give Whitefish a 30-day notice they are canceling the contract.

To fill the gap left by voided contract, Rosselló has reached out to state officials in both Florida and New York for help. Florida Gov. Rick Scott and New York Gov. Andrew Cuomo have already played a vital role in the start of the recovery efforts. Scott declared the State of Emergency in Florida to aid in resettling those in need to the mainland. Both Scott and Cuomo have made multiple visits to the island to offer their support.