Puerto Rico gov’t calls complaints about Whitefish ‘inferences’
SAN JUAN – Puerto Rico’s Public Security secretary & incident commander, Héctor Pesquera, appeared to dismiss allegations about possible influence by President Donald Trump in granting the contract between the Puerto Rico Electric Power Authority (Prepa) and Whitefish Energy, noting there “are inferences” that “we do not have the foundation for, as to where they come from.”
“The inferences are that there was a contract with a company, that with the tone of the editorial or the news item, inferred there had been some kind of arrangement between the Government of Puerto Rico and that company for political reasons, and we do not validate that at all,” Pesquera said, responding to questions from Caribbean Business during the government’s daily press conference.
Press reports indicate Whitefish may have won the contract with Prepa because of the relationship Joe Colonnetta, founder of HBC Investments—which finances the company’s operation—has with Trump.
According to data reported by the Washington Post and the Daily Beast, both Colonnetta and his wife have been donors to the Trump campaigns and the Republican National Committee. In addition, Whitefish CEO Andy Techmanski is a friend of Trump’s Interior Secretary Ryan Zinke, as both are from Montana, where the company is based.
But beyond those allegations, there are questions about the justifications for the multimillion-dollar contract because the company, only incorporated for two years, has stated the majority of its staff is subcontracted to other companies such as Florida’s Jacksonville Electric and Kissimmee Utility.
In this regard, the secretary of Public Affairs & Public Policy, Ramón Rosario Cortés, stated that “if someone put his hand where he did not have to, he will go to jail.”
Prepa contracted Whitefish for $300 million to assist that agency with repairs to the energy system after the passing of Hurricane Maria.
In fact, on Wednesday afternoon, sources from the U.S. Congress confirmed to Caribbean Business that from the federal capital they had asked the fiscal control board to request an emergency administrator for Prepa, in lieu of questions raised about the Whitefish contracts.
On the local level, the island’s own government found itself in the position of having to ask its Office of Management & Budget (OMB) to investigate the contract process and submit a report.
“The [OMB] report should be ready by Friday [Oct. 27]. It will be analyzed,” Pesquera said. “When we understand there is something that points out there was some kind of impropriety, we will do the referrals.”
Before the conclusion of the press conference at the Convention Center in San Juan’s Isla Grande sector, which has served as the government’s operations center since emergency management agency headquarters in Caguas were damaged by Hurricane Maria, Rosario Cortés pledged to provide the media, and federal and state authorities with “all the documentation and all the processes that were followed” to hire Whitefish.
With doubts circulating about how the contract process occurred, Caribbean Business asked the Public Affairs secretary for the reasons Gov. Ricardo Rosselló requested an investigation into the Whitefish contract, when the governor had already issued an executive order (OE 2017-053) to exempt contractors and government entities from having to comply with the applicable requirements in the government’s procurement process.
Although contract conditions are required in writing, agencies do not have to document the contract until 90 days after the emergency ends. They also do not have to send the contract to the Comptroller’s Office until 30 days after the end of the emergency, which is still ongoing. The order was signed Sept. 28, a week after the hurricane.
Prepa Director Ricardo Ramos has indicated that since Sept. 26 there has been an agreement between the public corporation and Whitefish, but it was not until Oct. 17 that the contract was formalized.
“The governor is not changing what he authorized. There is a legitimate concern from the people of Puerto Rico, and national media and entities at the level of the United States claiming there are some doubts that remain pending with the contract. And the governor, what he said yesterday, is that the OMB, its director, will be making a report,” Rosario Cortés said.
The official said the local “legal system” already has references about procurement in times of emergency. In fact, Executive Order 2017-053 refers to the possibility of procurements during emergencies, in accordance with Act 211 of 1999, the law creating the State Agency for Emergency & Disaster Management. However, this legislation is not so specific about exempting government agencies from compliance with contracting standards, a matter the governor specified in his executive order and embodied in a bill that is being discussed in the Legislature.
Caribbean Business also questioned the number of contracts that were granted after the executive order was issued, but there was no response.
In defense of ad contract
Meanwhile, the secretary of Public Affairs also defended Prepa’s new advertising contract with Key Integrated Solutions Inc. The contract, which has a billing maximum of $300,000, is being questioned because it is being awarded while the public entity has said it does not have the money to pay for materials its brigades need to repair the electric power service that is keeping a large part of Puerto Rico in the dark.
In fact, the contracts signed with Whitefish and Cobra Acquisitions require them to use their own materials, equipment and machinery to complete the work for which they were hired. Prepa expects these contracts to be financed with the money to be assigned by the Federal Emergency Management Agency (FEMA) to repair the electricity grid.
Rosario Cortés indicated, however, that all public agencies and corporations have money for advertising, a figure that has been decreasing in recent years.
The contract provides, among other areas, salaries of $200 an hour for a creative director, and $80 an hour for a production assistant.