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mahatmakanejeeves

(57,656 posts)
Fri Oct 27, 2017, 10:53 AM Oct 2017

FEMA has 'significant concerns' with Puerto Rico's $300m power deal

Source: The Hill

FEMA has significant concerns with Puerto Ricos $300m power deal

BY TIMOTHY CAMA - 10/27/17 09:58 AM EDT

The Federal Emergency Management Agency (FEMA) is sounding an alarm over Puerto Ricos $300 million contract with a small Montana company to restore power infrastructure, amid concerns over the firm's tiny staff and lack of competitive bidding.

FEMA will be responsible for paying for the work by Whitefish Energy Holdings, but the Puerto Rico Electric Power Authority (PREPA), the islands utility, entered into the contract.

According to FEMA, yes: "Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate."





Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable, FEMA said in its statement. ... FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.

The agency also said that the contract is between Whitefish and PREPA, and FEMA had no role in its signing.

Read more: http://thehill.com/policy/energy-environment/357486-fema-has-significant-concerns-with-puerto-ricos-300m-power



Editing: I'm moving the Reuters article from the main box to this box and putting The Hill article as the lead story. It was earlier, and it has more information.

* * * * *

https://www.reuters.com/article/us-usa-puertorico-power/fema-cites-significant-concerns-with-puerto-rico-energy-deal-idUSKBN1CW1X1

OCTOBER 27, 2017 / 9:40 AM / UPDATED 28 MINUTES AGO

FEMA cites significant concerns with Puerto Rico energy deal

Reuters Staff 1 MIN READ

WASHINGTON (Reuters) - The Federal Emergency Management Administration on Friday said it did not approve a multi-million dollar contract between Puerto Ricos power utility and a small Montana firm to repair storm damage, and has significant concerns about the deal.

In a statement, FEMA also said after its initial review it has not confirmed whether the contract prices are reasonable under the contract between Puerto Rico Electric Power Authority (PREPA) and Whitefish Energy Holdings.
36 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
FEMA has 'significant concerns' with Puerto Rico's $300m power deal (Original Post) mahatmakanejeeves Oct 2017 OP
This is a scandal. madaboutharry Oct 2017 #1
The company that was hired? Stryst Oct 2017 #19
So, which Trumpster approved it? jpak Oct 2017 #2
Zinke - it's his neighbor and good friend!! lark Oct 2017 #14
That 300 million won't go to PR. It will go to a Zinke crony, and Zinke will get a cut. Eyeball_Kid Oct 2017 #3
Bingo. dalton99a Oct 2017 #5
Exactly! lark Oct 2017 #15
right off a page of Confessions of an Economic Hitman! Excellent book, eye-opener for me and wiggs Oct 2017 #22
Dovetails with the Shock Doctrine nt lostnfound Oct 2017 #24
And yet it's likely FEMA will pay for it, Igel Oct 2017 #32
P.R. is better off with Tesla Marthe48 Oct 2017 #4
I'm surprised FEMA would raise questions when they are led by a Trump appointee. Frustratedlady Oct 2017 #6
Question? What media outlet was first with the Whitefish PR contract story? Freethinker65 Oct 2017 #7
FEMA issued a statement. A lot of people on their listserv got it simultaneously. mahatmakanejeeves Oct 2017 #9
Sorry. I edited my post. Not the FEMA statement, but the shady contract? Freethinker65 Oct 2017 #11
The Flathead Beacon; Kalispell, Montana's; version of the mainstream media, reported the contract. mahatmakanejeeves Oct 2017 #12
Thanks. Yep. I just did a DU site search as well. I had forgotten about that feature on DU Freethinker65 Oct 2017 #13
+1 dalton99a Oct 2017 #16
Please repost this timeline as a seperate OP Tom Rinaldo Oct 2017 #25
I think the trade journals were the first ones to smell a rat. mahatmakanejeeves Oct 2017 #27
The earliest I saw was dated Oct. 6. Igel Oct 2017 #33
How much of that will trump get ? JI7 Oct 2017 #8
Which government official signed the contract? irisblue Oct 2017 #10
If California signs a contract, does the federal government look at it? Igel Oct 2017 #34
Honestly, I was more meaning the Attorney General of PR & that staff. irisblue Oct 2017 #36
U.S. Congressman demands Oversight Committee investigation into Whitefish contract. mahatmakanejeeves Oct 2017 #17
FEMA Statement on PREPA's Contract with Whitefish mahatmakanejeeves Oct 2017 #18
I read somewhere the Contract hs a "No AUDIT" clause buried within benld74 Oct 2017 #20
Imagine, if you will.... SergeStorms Oct 2017 #21
UPDATED: FEMA Statement on Puerto Rico Electric Power Authority's Contract with Whitefish mahatmakanejeeves Oct 2017 #23
Just more Trump style business deals...... BlueJac Oct 2017 #26
The Governor of Puerto Rico probably roomtomove Oct 2017 #28
Yep someone there was going to get a cut underpants Oct 2017 #29
Yes, and he might also have been told "You want us to turn your lights back on?"... Tom Rinaldo Oct 2017 #30
According to this the Feds had zero to due with it, all the PR utility company: EX500rider Oct 2017 #31
This is where "campaign contributions" come from -- laundered through government contracts. PSPS Oct 2017 #35

madaboutharry

(40,231 posts)
1. This is a scandal.
Fri Oct 27, 2017, 10:58 AM
Oct 2017

I would be shocked if Interior Secretary Zinke didn't engineer this ridiculous deal with people from his hometown in Montana. The whole think stinks.

Stephanie Rhule on MSNBC had a spokesman from Whitefish Energy stammering this morning as he tried to insist the deal was totally legit. He tried to argue no other company wanted the contract. Stephanie wasn't buying it.

Stryst

(714 posts)
19. The company that was hired?
Fri Oct 27, 2017, 12:52 PM
Oct 2017

One of Zinke's sons just did a summer job with them. Which I'm SUPER sure is just a coincidence.

lark

(23,162 posts)
14. Zinke - it's his neighbor and good friend!!
Fri Oct 27, 2017, 12:03 PM
Oct 2017

Besides $$ for Zinke, bet there was some hand-off to the governor. We already know Zinke is both a Repug ass and personal profiteer and it sure seems that the governor or PR is the same since he approved this heinous, bad for PR. bad for Americans contract.

Eyeball_Kid

(7,434 posts)
3. That 300 million won't go to PR. It will go to a Zinke crony, and Zinke will get a cut.
Fri Oct 27, 2017, 11:05 AM
Oct 2017

Our tax dollars at work.

lark

(23,162 posts)
15. Exactly!
Fri Oct 27, 2017, 12:08 PM
Oct 2017

Did you notice that they are billing "hourly" rates, what a rip-off scheme that is. They don't actually have to do anything at all, just bill. They should have set this up as "rebuild entire PR electrical grid" within 3 (6?) months, have all hospitals online iwthin a month, etc, etc. and pay for meeting these milestones. This hourly stuff is an insanely bad idea for people of PR, will anything at all get done?

Dems need to hold immediate hearings on this and file a lawsuit to overturn this blatant profiteering from Zinke and friends.

wiggs

(7,819 posts)
22. right off a page of Confessions of an Economic Hitman! Excellent book, eye-opener for me and
Fri Oct 27, 2017, 01:52 PM
Oct 2017

if the 300 million adds to PR's debt it would be exactly what we've done to third world countries for decades.

We lend money to poor countries for 'infrastructure improvements' that don't benefit the people because: the money goes for improvements that benefit a corporate interest such as a manufacturing plant that needs a dam built; the contracts are given to global firms, not local firms; and a fair amount goes to graft, corruption, and pocket lining. Everyone wins except the country which is then saddled with more debt and becomes a slave to the US or World Bank for UN votes, more contracts, etc..

Highly recommended reading.

Igel

(35,362 posts)
32. And yet it's likely FEMA will pay for it,
Fri Oct 27, 2017, 07:25 PM
Oct 2017

while locals were the ones who put out a request for bids, negotiated and signed the contract.

We're doing pirouettes around the fact that it was PR officials of a PR-owned power company that signed the deal because we don't want to blame the victim.

Marthe48

(17,044 posts)
4. P.R. is better off with Tesla
Fri Oct 27, 2017, 11:06 AM
Oct 2017

This contract stinks. A company less than 2 years old, with 2 employees, $300 million dollars? Whitefish will have steak for dinner and P.R. citizens will have cold beans.

Frustratedlady

(16,254 posts)
6. I'm surprised FEMA would raise questions when they are led by a Trump appointee.
Fri Oct 27, 2017, 11:34 AM
Oct 2017

Or, am I missing something?

Once it was announced, we knew something was fishy. Young company with 2 employees? Did they work off a card table on top of it? Hell of a lottery to pull off this deal.

Freethinker65

(10,064 posts)
7. Question? What media outlet was first with the Whitefish PR contract story?
Fri Oct 27, 2017, 11:37 AM
Oct 2017

I think they deserve a big thank you.

mahatmakanejeeves

(57,656 posts)
9. FEMA issued a statement. A lot of people on their listserv got it simultaneously.
Fri Oct 27, 2017, 11:38 AM
Oct 2017

It's hard to say who reposted it first.

Let's say The Wall Street Journal., The Hill, the Washington Post, etc. all got the statement at the same time. It's now a contest to see who is the fastest typist.

Freethinker65

(10,064 posts)
11. Sorry. I edited my post. Not the FEMA statement, but the shady contract?
Fri Oct 27, 2017, 11:42 AM
Oct 2017

I thought I read about it here in a link several days ago from an alternative press type site. Regardless, it is nice someone is doing the job that government employees used to do. It is also nice that the media picked up on it.

mahatmakanejeeves

(57,656 posts)
12. The Flathead Beacon; Kalispell, Montana's; version of the mainstream media, reported the contract.
Fri Oct 27, 2017, 11:48 AM
Oct 2017

I didn't pay any attention to it at the time. I saw the article in the Flathead Beacon, but it didn't seem that interesting. I didn't bother to post a thread about it, not until after people started asking questions. Here's my thread from the Montana forum, started at 9:52 a.m. on Tuesday, October 24, 2017:

DU thread: Whitefish Company Tapped to Rebuild Puerto Rico Power Grid

* * * * *

Whitefish Company Tapped to Rebuild Puerto Rico Power Grid

Two-year-old company brokered $300 million contract with island’s electric utility

BY TRISTAN SCOTT // OCT 21, 2017

A Whitefish-based energy outfit is playing a key role in restoring power on the hurricane-ravaged island of Puerto Rico, a windfall for the relatively untested Montana company, whose CEO said it is well-equipped for such a massive undertaking in the rural and rugged region.

Officials with Whitefish Energy Holdings say the company’s experience and expertise working in the Mountain West, and CEO Andy Techmanski’s 20 years rebuilding transmission lines here, furnishes crews with a skillset uniquely tailored to meet the challenges of repairing and reconstructing electrical transmission infrastructure on the island’s mountainous terrain, which Hurricane Maria rolled across last month, killing at least 49 people and leaving the majority of the island without power and in the dark.

Last month, the company signed a $300 million contract with the Puerto Rico Electric Power Authority (PREPA) to repair and rebuild 100 miles of transmission lines on the western portion of the island, and hopes to start turning some of the lights back on in the coming days.
....

Formed in 2015 by Techmanski, Whitefish Energy began eying the former site of the Columbia Falls Aluminum Company as a potential campus to build a transformer manufacturing plant, in partnership with Brazil-based Comtrafo S.A., a leading transformer manufacturing firm. At the time, Techmanski estimated the company would need to generate $15 million to $20 million in backorders with regional utilities in order to justify the manufacturing center, which so far has not panned out.

What happened next was that trade journals, such as Utility Dive and E&E News, started asking, "who?"

Small Montana firm lands Puerto Rico’s biggest contract to get the power back on

....
The House Committee on Natural Resources is examining Whitefish’s role in Puerto Rico, said Parish Braden, a spokesman for the committee. The hiring of the little-known company has been noted by the trade publications Utility Dive and E&E News.
....

This comment to the Flathead Beacon article showed up two days later:



* * * * *

Other links:

Tom Rinaldo

(22,917 posts)
25. Please repost this timeline as a seperate OP
Fri Oct 27, 2017, 04:40 PM
Oct 2017

Somehow seeing how word slowly filtered up from a small regional newspaper to a few inquisitive trade journals and then finally started to break in the national press makes this all somehow more vivid. This was not supposed to see the light of day.

mahatmakanejeeves

(57,656 posts)
27. I think the trade journals were the first ones to smell a rat.
Fri Oct 27, 2017, 04:43 PM
Oct 2017

All the big players in the industry know who all the other big players are. Then, from out of nowhere, a couple of guys with a pickup truck and a ladder show up and get awarded this yuuuge contract. At the least the ladder is fiberglass, and not aluminum.

Igel

(35,362 posts)
33. The earliest I saw was dated Oct. 6.
Fri Oct 27, 2017, 07:34 PM
Oct 2017
https://www.eenews.net/stories/1060062975

I included the info in https://www.democraticunderground.com/10141890476#post4 .

There was nothing especially shady about it except the facts. Nobody had spun it. The real issue at the time was that PR was in charge of the power lines and taking steps, good or bad, as a local government should. It was ignored for that very reason. If PR is responsible, and things are screwed up, we get to assign responsibility to those responsible. Not very satisfying, blaming a Trump foe.

It pays to note that PR's problem isn't a bunch of lines down that just run across the street. Substations and pretty large transformers were trashed. The Brazil tie, to a large company specializing in transformers, makes sense, if Whitefish's purpose is rebuilding the transmission lines. The lack of 5000 employees also makes sense.

And having the transmission lines put back in place first also makes sense. You typically check the local network by turning it on and tracking where faults are. Until the high-tension lines are in place, you fix some lines but you can't really do much about getting power to people.

It pays to remember that the media have a long history of finding tempests in teacups very profitable and useful.

irisblue

(33,036 posts)
10. Which government official signed the contract?
Fri Oct 27, 2017, 11:39 AM
Oct 2017

Do not the government lawyers look at contracts before they are signed?
An attorney looked over my house contract before I signed it, and it was for way way less money.

Igel

(35,362 posts)
34. If California signs a contract, does the federal government look at it?
Fri Oct 27, 2017, 07:37 PM
Oct 2017

PR is fairly autonomous. It signed a contract. I'd assume that PR-government lawyers looked at it.

Then again, this was before Oct. 6, so the contract was signed just a bit more than 2 weeks after Maria made landfall. The usual safeguards--if there are any--may have been ignored in the rush to what needed to be done. ("It needs to be done" is a frequent excuse for doing things wildly illegal.)

irisblue

(33,036 posts)
36. Honestly, I was more meaning the Attorney General of PR & that staff.
Fri Oct 27, 2017, 08:32 PM
Oct 2017

Or the terrorital equivalent. Is not there an individusl in the legal department of the terrority that looks over contracts?

mahatmakanejeeves

(57,656 posts)
17. U.S. Congressman demands Oversight Committee investigation into Whitefish contract.
Fri Oct 27, 2017, 12:28 PM
Oct 2017

This Twitter feed, as are many others, is following the story:

https://twitter.com/kenklippenstein

US Congressman demands Oversight Committee investigation into Whitefish contract, warning of "sweetheart contracts and backroom deals"


benld74

(9,911 posts)
20. I read somewhere the Contract hs a "No AUDIT" clause buried within
Fri Oct 27, 2017, 01:00 PM
Oct 2017

Nobody, person or company can AUDIT expenses or costs associated with the contract

SergeStorms

(19,204 posts)
21. Imagine, if you will....
Fri Oct 27, 2017, 01:22 PM
Oct 2017

that this was done under President Hillary Clinton's administration. (it never would happen under her administration, but try to imagine it)

Now imagine what the GOP's reaction would be.

mahatmakanejeeves

(57,656 posts)
23. UPDATED: FEMA Statement on Puerto Rico Electric Power Authority's Contract with Whitefish
Fri Oct 27, 2017, 03:28 PM
Oct 2017

Hat tip, Wwcd: Not sure if this will help you, FEMA Website on PREPA

UPDATED: FEMA Statement on Puerto Rico Electric Power Authority’s Contract with Whitefish

Release date: October 27, 2017

The decision to award a contract to Whitefish Energy was made exclusively by PREPA. FEMA was not involved in the selection. Questions regarding the awarding of the contract should be directed to PREPA.

Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate.

FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.

Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.

It is important for all applicants for FEMA Public Assistance to understand and abide by federal requirements for grantee procurement. Applicants who fail to abide by these requirements risk not being reimbursed by FEMA for their disaster costs.

FEMA continues to focus on the expedited restoration of essential services in support of the Governor’s recovery goals.

roomtomove

(217 posts)
28. The Governor of Puerto Rico probably
Fri Oct 27, 2017, 04:45 PM
Oct 2017

received a big check from these guys...I recalled he was complimentary of
Trumpolini's PR response.

Tom Rinaldo

(22,917 posts)
30. Yes, and he might also have been told "You want us to turn your lights back on?"...
Fri Oct 27, 2017, 05:00 PM
Oct 2017

"Talk to these, ahem, contractors in Montana."

EX500rider

(10,874 posts)
31. According to this the Feds had zero to due with it, all the PR utility company:
Fri Oct 27, 2017, 05:20 PM
Oct 2017
Claims by Prepa, the US territory's main utility, that the Federal Emergency Management Agency (Fema) reviewed the deal have been contradicted.
The contract states that "Prepa hereby represents and warrants that Fema has reviewed and approved of this Contract".
It also says Fema "confirmed this Contract is in an acceptable form to qualify for funding from Fema or other US Governmental agencies".
But in an email to reporters on Thursday night, Fema denied that.
It said "any language in any contract between Prepa and Whitefish that states Fema approved that contract is inaccurate".
Fema also said it "has significant concerns with how Prepa procured this contract and has not confirmed whether the contract prices are reasonable"


http://www.bbc.com/news/world-us-canada-41780916

Some of the reasons could be that the other company that bid wanted 25 million up front and Prepa (the PR utility company)
does not have the cash, they filed for bankruptcy recently.
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