A two-person Montana energy company based in the hometown of Secretary of the Interior Ryan Zinke is raising eyebrows after securing a $300 million no-bid contract to restore electricity to Puerto Rico. The island remains largely without power in the wake of Hurricane Maria.
The firm’s connection to both Zinke and President Trump has set off alarm bells for both Democratic and Republican lawmakers, some of whom have called for an investigation into potential conflicts of interest between the utility and the administration.
On Friday, Zinke fired back at critics, blaming the “dishonest media” and “political operatives” for attempting to tie him to the contract. He called the allegations “baseless” and claimed that he had no contact with the company after the contract was awarded.
“Only in elitist Washington, D.C., would being from a small town be considered a crime,” Zinke said.
Both Whitefish Energy and Zinke hail from the small Montana town of Whitefish, which has a population of just over 6,300. Zinke’s son worked for the company for a summer, and Zinke reportedly helped the company secure a contract in Montana last year. The company also counts the Dallas-based HBC Investments LLC among its investors; Joseph Colonnetta, founding and general partner of HBC, donated $5,400 to Trump’s presidential campaign.
I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico. I welcome all investigations into the allegations pic.twitter.com/JQgVFR7Fp6
— Secretary Ryan Zinke (@SecretaryZinke) October 27, 2017
Zinke added that he welcomes “all investigations into the allegations” and “[encourages] the Interior Department’s Inspector General to investigate this matter fully.” The Office of the Inspector General for the Department of Homeland Security is already conducting a review of the contract.
Like Zinke, the Trump White House has denied any connection with the company or the contract, saying on Friday that officials were “not aware” of the massive contract, which was made through Puerto Rico’s government-owned utility, Puerto Rico Electric Power Authority (PREPA), and will be paid out through the Federal Emergency Management Agency (FEMA).
“Our understanding is the decision to give a contract to Whitefish Energy was made exclusively by Puerto Rico Electric Power Authority,” White House spokesman Raj Shah said in a statement released on Friday. “The White House is not aware of any federal involvement in the selection.”
Senators Maria Cantwell (D-WA) and Ron Wyden (D-OR) have already called for an investigation into the contract, asking the Government Accountability Office to look into why Whitefish — a company with just two employees — was awarded one of the largest post-Maria contracts to be handed out.
“Among the principal concerns … are the potentially inflated costs of time and material in the contract relative to comparable at-cost utility mutual aid agreements; the opaque and limited nature of PREPA’s bidding process that led to the contract letting; and the contemporaneous communications between Whitefish and senior members of the federal executive branch, including Secretary of the Interior Ryan Zinke,” the senators wrote in their letter to Comptroller General Eugene Dodaro.
Two Republican congressmen have also asked the head of Puerto Rico’s public utility system to retain all records pertaining to the hiring of Whitefish, and turn those records over to Congress.
FEMA has also raised red flags regarding the contract, announcing on Friday that it had “significant concerns” about how the contract was awarded and noting that it had not given preliminary approval for the deal. According to the contract, the government is not allowed to “audit or review the cost and profit elements” of the deal.
The company itself has balked at requests for transparency, specifically calling out San Juan Mayor Carmen Yulín Cruz after Cruz raised questions about the company’s deal with PREPA.
“We’ve got 44 linemen rebuilding power lines in your city & 40 more men just arrived,” Whitefish tweeted to Cruz on Wednesday. “Do you want us to send them back or keep working?”
Meanwhile, the majority of Puerto Rico remains without power more than a month after Hurricane Maria — the largest power outage in U.S. history. Trump has repeatedly praised his response to the crisis, giving himself a “10” for his handling of the situation.