Whitefish in Puerto Rico

This was really fast:

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Faster than I could follow this matter and put together the diary that I was ready to post before this breaking news.  Perhaps it will still have some value and all the relevant information has yet to be disclosed.

This is completely bizarre and inexplicable.  So much so on its face from reports in WaPo and the NYTimes  that even federal agenciesmembers of Congress from both parties are calling for an investigation,

The bare-bones facts are:  1) Electricity in Puerto Rico is supplied by the state owned and operated Puerto Rico Electrical Power Authority (PREPA) that filed for bankruptcy in July 2017.  2) Hurricane  Irma damaged the electrical grid in PR, but it was Hurricane Maria that destroyed most of it.  3) Retoration of power in PR is a major project.* 4)  FEMA grants to PREPA total $171 million 5) PREPA awarded a $300 million contract to Whitefish Energy Holdings, Montana  (WEH)
$300 million is a major contract.  Major contracts go to large, well-established major contractors and often such contractors form joint-ventures because no one contractor possesses all the resources required to get the job done.  SOP for any public entity is to solticit bids from contractors and award the contract to the lowest cost responsible bidder.**

Whitefish isn’t a major contractor.  It was only established in 2015.  Not as a consolidation or spin-off from long-established electricity contractors but brand new.  That means that it has an extremely limited track record and limited working capital and equity.  In no way would such a contractor be deemed a “responsible bidder” for a three hundred million dollar prime contract.  As electrical contractors self-perform, as contrasted with subcontract, most of the work, getting to that “responsible” level requires a higher degree of in-house construction expertise and capital bases than that required for a general contractor.

Not possible that Whitefish would qualify for much, if any, public works contract.  That includes work for public utilities (i.e. LADWP), COE, and DOD.  And contracts with private utility companies would be relatively small, less than a million dollars.  
A $300 million public works contract?  Not even close to plausible.  Yet somehow it did happen.  And now a whole lot of people and entities are asking a whole lot of questions.

The Guardian:

The mayor of San Juan on Wednesday accused the company restoring power to Puerto Rico of threatening to withdraw its services after she drew attention to its controversial contract.

Who does Whitefish CEO Andy Techmanski think he is?  Donald Trump? (The company’s investors also include HBC Investments, a Texas-based firm whose founder donated generously to President Trump. )  No CEO of any “responsible” construction company would ever respond to questions by making a threat on twitter.  That confirms how out of its league Whitefish is.   Does it help that Whitefish Energy Apologizes to Puerto Rico, San Juan Mayor for Twitter Comments?

The Daily Beast reporter Ken Klippenstein has been tweeting about the contract.  Unfortunately, his link and Vice’s link to the contract doesn’t work.   Recall this is a public works contract and therefore, the contract should be accessible.  Thus, until it is available, I can’t make any assessment of the terms of the contract.

However this anomaly came to be, some are scrambling:

…The Federal Emergency Management Agency said Friday that it has “significant concerns” with the contract that PREPA drew up with Whitefish, and that it would be reviewing it — but that it had not done so prior to the contract’s approval, as the contract itself states.
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The White House, too, disavowed the contract, saying that neither the federal government nor Zinke had any involvement in it.

“He reiterated once again that we have no role — the federal government — and specifically he had no role in that contract,” White House press secretary Sarah Huckabee Sanders said during a White House press briefing. She also said that President Donald Trump specifically asked Zinke whether he was at all involved with the contract on Friday, “just for clarification purposes.

Zinke took to Twitter himself to say he was not involved in the contract negotiations.

If the statements from the Trump administration aren’t true (would be an exception for them if they are true), this will be a big deal.  Possibly a very big deal because disaster aid for Puerto Rico is already a weak spot for Trump according the the HarrisHarvard poll:

62% disapproval on “Administering the government” (page 12) (strongly approve 16% (page 16)

And specifically: Trump’s Handling Of Hurricane Maria Is Getting Really Bad Marks

The latest Associated Press/NORC poll found that just 32 percent of Americans approved of Trump’s handling of disaster relief for victims of recent hurricanes “in U.S. territories, including Puerto Rico and the U.S. Virgin Islands,” while 49 percent disapproved. In the same survey, 48 percent approved of his handling of disaster relief in Florida and Texas; just 27 percent disapproved.

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*Makes the Sonoma County fire related outages (over two weeks in some areas) look like child’s play.

**Recall Bunnatine Greenhouse.
https://news.vice.com/story/multiple-investigations-opened-into-controversial-puerto-rico-energy-con
tract