Whitefish Energy's scandalous power contract with Puerto Rico is cancelled

UPDATE: With that, the contract has been cancelled.

Hours after Governor Ricardo Rosselló issued a statement calling for PREPA to cancel its contract with Whitefish Energy, the Puerto Rico power utility confirmed it will do just that, The Washington Post and CBS News correspondent David Begnaud both confirm.

To bring Puerto Rico's ailing power grid back online, Rosselló has expressed his support for crews from Florida and New York to help with the process. The governors of both states have already visited the U.S. territory and offered assistance, and energy concerns in both states have plenty of experience dealing with widespread, weather-related power outages.

Original story follows:

As Puerto Rico still reels in the aftermath of Hurricane Maria and questions swirl around a suspicious contract aimed at restoring the U.S. territory's power grid, Governor Ricardo Rosselló has decided enough is enough.

The office of the governor issued a lengthy statement on Sunday, though the first sentence really tells the big story here: "Governor of Puerto Rico, Ricardo Rosselló, requested the governing board of Puerto Rico Electric Power Authority (PREPA) to proceed immediately with invoking the contract cancellation clause with Whitefish Energy."

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This new development was first reported by CBS News and The Washington Post, with CBS correspondent David Begnaud later sharing the full text of the governor's statement in a tweet.

Whitefish is the small, Montana-based energy concern that won a $300 million contract to turn the lights back on in Puerto Rico. The no-bid contract raises many questions, due to both the size of the company — up until late last month, there were only two employees — and its connection to Donald Trump's Interior Secretary, Ryan Zinke (Whitefish is based in his hometown).

The questions only grew louder last week when, late Thursday, a copy of the signed contract surfaced on the internet, via an apparent leak. Note that the authenticity of the leaked document was never verified, but the details contained therein match up with other news reports.

It's also worth noting that multiple investigations into the contract are already underway, in Congress and Puerto Rico both. As Mashable's Andrew Freedman wrote on Friday: "[The leaked contract] shows that what at first appeared to be a shady deal is actually an unbelievably shady deal."

One of the most alarming provisions states that basically no one with governing power is allowed "to audit or review the cost and profit elements of the labor rates specified herein." In other words, Whitefish is free to charge whatever it wants for the work it's doing, with no oversight to ensure the rates are fair and just.

And hey, about those rates: According to the leaked contract, site supervisors are earning $330 per hour while project accountants are earning $440 per hour. The lowest-paid workers identified in the contract are still making $140.26 per hour — if that were an annual salary, it would fall just short of $300,000.

Another provision clarifies the federal government's involvement in the agreement: It's not involved. As the contract reads: "The Federal Government is not a party to this Contract and is not subject to any obligations or liabilities to PREPA, Contractor, or any other party pertaining to any matter resulting from the Contract."

This is where things get dicey for Congressional investigations and even Rosselló's call for the contract to be cancelled. Legally, this is a hands-off deal as far as the government goes. 

As Begnaud noted on Twitter, the PREPA board is appointed by Rosselló. His government can't directly force the contract's cancellation, but he seems to wield some influence here. What's not yet clear is if PREPA's board is willing to comply with the request, or if Rosselló is able to summarily dismiss them if they're not cooperating.

The governor's primary interest at this point is getting his constituents back to a livable situation in the aftermath of a hurricane that decimated the island territory's infrastructure. While most of Puerto Rico once again has access to running water — 80 percent, according to the latest report — less than 30 percent has power at this point.

UPDATED Oct. 29 4:24 p.m. ET with the news of PREPA's plans to cancel the Whitefish Energy contract.

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