Federal Bureau of Investigation probing Puerto Rico power contract awarded to Montana start-up without bidding

CBS News

Federal Bureau of Investigation agents from the San Juan field office are looking into the controversial deal, according to a Wall Street Journal report that emerged one day after Puerto Rico Gov. Ricardo Rossello canceled the contract.

But on a more controversial topic, Long slammed the $300 million no-bid contract in Puerto Rico warded to Whitefish Energy Holdings, a tiny Montana company. "We will certainly finish any work that PREPA wants us to complete and stand by our commitments knowing that we made an important contribution to the restoration of the power grid since our arrival on the island on October 2".

The FBI is now investigating this turn of events, reports the Wall Street Journal.

There is mounting pressure from both Democrats and Republicans in Congress for an explanation as to how Whitefish landed the contract, with the inspector general of the department of homeland security set to review the matter. On 26 September, Whitefish was handed a contract by the power utility to fix the electricity grid.

At the time the storm hit, Whitefish had only two full-time employees.

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Whitefish is based in the hometown of Ryan Zinke, the secretary of the interior. The White House has also denied any impropriety.

Whitefish's contract was canceled Sunday amid increasing scrutiny of the contract's extremely generous terms, its restriction against government auditing of its "cost and profit elements" and the lack of approval by the Federal Emergency Management Agency, despite the contract stating that FEMA needed to sign off on the deal. FEMA said Friday that it had offered no such approval.

According to PREPA's Ramos, the terms of the contract stipulate that the cancellation of the contract with Whitefish become effective 30 days after notice.

Whitefish has said the contract was obtained properly, with chief executive Andy Techmanski claiming that "there are people out there on a witch hunt looking for something that does not exist".

The deal has been criticized by Puerto Rican officials and US federal authorities after details emerged that the terms of the deal had not been obtained through competitive public bidding.