Backroom wrangling over financial transactions between government agencies and big business is not unheard of. It is, however, suspect when it involves “no-bid” contracts.
Such deals are pretty straightforward: “Our city, state ... island ... has a job that needs to be done. Tell us how much it will cost and we’ll sign a contract to let you do it.” Yet arrangements of this nature are also questionable.
Which leads to how a fledgling company based in Whitefish, Montana could have been awarded a contract to restore power to the island of Puerto Rico, some 3,400 miles away. After an uproar that lasted for nearly a week, the contract was pulled this past Sunday. Questionable aspects of the transaction had arisen and remain.
According to the publication Caribbean Business, the deal between the government-owned Puerto Rico Electric Power Authority, or PREPA, and two-year old Whitefish Energy was made prior to Hurricane Maria hitting the island. As in, before the island was decimated.
Last week, The Washington Post reported that Whitefish Energy’s CEO Andy Techmanski said he and representatives of PREPA discussed “’what if’ scenarios” for recovery two weeks before the disaster was even a gleam in the hurricane’s eye. While it’s highly unlikely that the formerly two-person Whitefish Energy company or PREPA relied on crystal balls in their decision-making process, one must wonder how this arrangement materialized in the first place.
How did a company that, according to the Post, maintained a nominal staff of two in Montana, whose only prior experience was replacing a metal pole structure and splicing three miles of conductor and overhead ground wire and a separate deal to replace and upgrade less than five miles of transmission line in Arizona, win a $300 million no-bid contract in Puerto Rico? Especially when less-costly options overseen by more experienced contractors were available through the same type of mutual aid program successfully employed in Texas and Florida in the aftermath of recent hurricanes there. Yet PREPA chose beforehand not to request outside help because a deal had already been in place. Why?
According to the industry trade publication Utility Dive the contract stipulated that government agencies couldn’t review the project’s finances. They also reported the agreement stated that Puerto Rico couldn’t make a claim against Whitefish for work delays or completion.
Sounds fishy. Whitefishy.
Here’s another good one. The New York Times reported last week that PREPA “represents and warrants that FEMA” approved the deal. Not so, said FEMA. In fact, FEMA said they had “significant concerns” about PREPA’s contract with Whitefish.
Hints of impropriety are not in the best interests of a government that had been called into question over the island’s financial mismanagement even before Maria. Given that FEMA normally helps pay for storm recovery with taxpayer money, this not-so-little boondoggle between Mr. Techmanski and PREPA’s executive director Ricardo Ramos could have left both the utility company and the people of Puerto Rico shortchanged and further in the dark should FEMA have decided it wouldn’t reimburse expenses. It’s ludicrous to believe these gentlemen couldn’t anticipate that others might perceive their actions to be ignorant at best, or corrupt at worst.
Many people, both in and outside the media, have also pointed out that Interior Secretary Ryan Zinke lives in the city of Whitefish. There’s no reason to assume, of course, that Sec. Zinke had anything to do with the contract between Whitefish Energy and PREPA. Whitefish is a small town of about 7,300 people. Everybody probably knows everybody enough to say “howdy.” And even though Sec. Zinke’s son once worked for Whitefish Energy, immediate conclusions should not be drawn.
Mr. Techmanski might very well have mentioned in passing to Mr. Ramos that he “knew” Sec. Zinke and that his son worked for him one summer. It may very well have been as benign as that. Maybe. It remains to be seen. But with allegations of travel abuses both before and after taking office, the secretary cannot afford to be tainted by even an iota of impropriety.
Let’s focus, however, on the reality of day-to-day life for the 3.4 million Americans living in Puerto Rico. Supplies and water are still short. Homes remain destroyed. Many roads are impassable. Recovery efforts are unsatisfactory at best. And it is becoming increasingly clear to government officials that a few people were trying to rake in a lot of our tax dollars by profiteering from a humanitarian crisis in the making.
The whole thing smells worse than month-old whitefish.