Puerto Rico power board says controversial Whitefish electrical contract will be cancelled

The cancellation came after Puerto Rico Gov. Ricardo Rossello called for an immediate end to the tiny Montana firm's $300-million contract to restore power to the storm-hit U.S. territory.

70% are still without power in the storm-ravaged U.S. territory

Good samaritans make a circle of prayer with the residents of Rio Abajo in Utuado, Puerto Rico, Friday, as recovery efforts from Hurricane Maria continue. With 70% of the territory still without power, Puerto Rico Governor Ricardo Rossello is calling for the cancellation of the electrical contract with controversial company Whitefish. (David Santiago/Associated Press)

The head of Puerto Rico's power company said Sunday the $300-million contract with Whitefish Energy Holdings will be cancelled.

The decision follows a demand from Puerto Rico's governor earlier Sunday that the board of the power company cancel the contract with Whitefish amid increased scrutiny of the Montana company's role in Hurricane Maria recovery efforts.

The cancellation comes as federal legislators seek to investigate the contract awarded to the small company from Interior Secretary Ryan Zinke's hometown.

"There cannot be any kind of distraction that alters the commitment to restore electrical power as soon as possible in Puerto Rico," Rossello said, adding that nearly $8 million has been paid to Whitefish so far.

Whitefish spokesperson Chris Chiames told The Associated Press that the company would soon issue comment. Puerto Rico's power company spokesperson Carlos Monroig did not return messages for comment.

Rossello said he has requested that crews from New York and Florida come help restore power in Puerto Rico as he criticized the U.S. Army Corps of Engineers for not meeting its goals. The agency could not be immediately reached for comment.

Audits of the Whitefish contract at a local and federal level are ongoing, and the governor also announced the appointment of an outside co-ordinator to oversee the power company's purchase and contracting division.

"If something illegal was done, once again, the officials involved in that process will feel the full weight of the law, and I will take administrative actions," Rossello said.

Most Puerto Ricans still without power

Roughly 70 per cent of the island remains without power more than a month after Hurricane Maria struck the U.S. territory on Sept. 20 as a Category 4 storm, with winds of up to 245 km/h.

Power company director Ricardo Ramos has said that Puerto Rico's Electric Power Authority reached a deal with Whitefish after at least five other companies demanded similar rates, in addition to a down payment the power authority did not have. Ramos also said the Federal Emergency Management Agency (FEMA) approved of the deal, something the agency has denied.

Whitefish Energy Holdings workers restore power lines damaged by Hurricane Maria in Barceloneta, Puerto Rico, on Oct. 15. The Montana company had just 2 employees when it was awarded the $300-million contract. (Ramon Espinosa/Associated Press)

Whitefish had 2 employees when storm hit

FEMA has raised concerns about how Whitefish got the deal and whether the contracted prices were reasonable. The two-year-old company had just two full-time employees when the storm hit, but it has since hired more than 300 workers.

A Whitefish contract obtained by The Associated Press found that the deal included $20,277 an hour for a heavy lift Chinook helicopter, $650 an hour for a large crane truck, $322 an hour for a foreman of a power line crew, $319 an hour for a journeyman lineman and $286 an hour for a mechanic.

Each worker also gets a daily allowance of $80 for food, $332 for a hotel room and $1,000 for each flight to or from the mainland.

Whitefish Energy Holdings is based in Whitefish, Mont.

Zinke, a former Montana congressman, knows Whitefish CEO Andy Techmanski, and Zinke's son also had a summer job at a Whitefish construction site.

"I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico," Zinke recently said in a statement linked to a tweet. "Any attempts by the dishonest media or political operatives to tie me to awarding or influencing any contract involving Whitefish are completely baseless."

Trump campaign backer

Democrats also have questioned the role of HBC Investments, a key financial backer of Whitefish Energy. In addition to the two Congressional committees looking into the matter, Democratic Congressman Luis Gutierrez is calling for the FBI to investigate as well.

The Dallas-based company's founder and general partner, Joe Colonnetta, has contributed thousands of dollars to Trump and other Republicans. Chiames has said Colonnetta's political donations were "irrelevant" and that the company would co-operate with any federal authorities.

Rio Abajo residents Carlos Ocasio Borrero, left, and Luis Santiago clean up debris in Utuado, Puerto Rico, as recovery efforts from Hurricane Maria continue in Puerto Rico. (David Santiago/Associated Press)

This week, Rob Bishop, the Republican representative for Utah who heads the House natural resources committee, sent the power company director a letter demanding documents, including those related to the contract with Whitefish and others that show what authority the agency has to deviate from normal contracting processes. A spokesperson from Bishop's office did not immediately return a message for comment on Sunday.

A federal control board that oversees Puerto Rico's finances announced this week that retired Air Force colonel Noel Zamot will be in charge of power reconstruction efforts. Rossello and other officials have rejected the appointment. They say the local government is in charge of the power company, which is $9 billion in debt and had struggled with ongoing outages before hurricanes Irma and Maria hit last month.

With files from CBC News.