Puerto Rico Power Authority Calls To Cancel Dubious $300M Grid Contract

MICHEL MARTIN, HOST:

We're going to start the program in Puerto Rico, where 70 percent of residents are still without electricity after Hurricane Maria destroyed the power grid more than a month ago. There are downed power lines and utility poles everywhere, which would be a tall order for repair under any circumstances. But today, the head of the Puerto Rican Power Authority announced that it is canceling the territory's contract with Whitefish Energy. That's the two-person electrical repair company out of Montana that had been signed to take on the huge project of restoring power to Puerto Rico. Now, this came after Governor Ricardo Rossello called for the cancellation in a press conference this morning.

(SOUNDBITE OF PRESS CONFERENCE)

RICARDO ROSSELLO: In the interest of protecting our public interest, I have asked the board of the power authority to invoke the cancellation clause in the contract immediately.

MARTIN: For more on this, we are going to go to Jason Beaubien, who is in San Juan, the capital of Puerto Rico. Jason, thanks so much for speaking with us.

JASON BEAUBIEN, BYLINE: Yeah, no problem.

MARTIN: So what's the latest?

BEAUBIEN: So the latest is that, yes, this has been canceled. The governor basically asked the power authority to cancel it. And the power authority, just a little while ago, announced that they have done that. And, you know, the governor was - he had asked for a review of it by the comptroller earlier this week. He had asked the U.S. inspector general to look into it. Clearly, he was very unhappy with what he was seeing, as this being a no-bid contract to this tiny firm in Montana, charging rates that appeared incredibly steep. And even just that suspicion of corruption around it had become this huge distraction. And so now, this contract is cancelled.

MARTIN: Well, so tell us a little bit more about that if you would. Now, we already knew - or it had been known for, at least, a little bit of time now that Whitefish Energy is based, for example, in the same town as the interior secretary, Ryan Zinke, is from. The terms of the contract were concerning. So was there something that happened this past week that caused the governor to call for this move to cancel the contract?

BEAUBIEN: You know, I don't think there was any one specific thing. It - he has not come out and said it was exactly this. But, clearly, the governor was growing more and more uncomfortable with the terms as they became more public and just this growing sense that there was something suspicious that had happened with it - with this deal - and that this deal was given, you know, as a sweetheart deal to a very tiny company.

There has been some connection between the people from Whitefish Energy and Secretary Zinke. They both have denied that there was any collusion on this contract or that the interior secretary had anything to do with it. Also, the power authority has said nothing illegal has happened. But, clearly, things had gotten to the point where he couldn't just keep going forward with this. It had become a huge distraction, as I said a minute ago.

MARTIN: And before we let you go, Jason, do you have a sense of what the feeling is among Puerto Ricans about that? Is there - was there general concern over the terms of the contract, or are people just hoping to get their power back however they can?

BEAUBIEN: You know, across the political spectrum, there was a lot of people who wanted this contract to go. At the same time, Whitefish was a major player out there. They had hundreds of utility crew out on the - out there working. So this is going to be a setback, but I think most people here in Puerto Rico will welcome it.

MARTIN: That's Jason Beaubien reporting for NPR in San Juan. Jason, thank you.

BEAUBIEN: You're welcome.

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