The FBI has opened a preliminary inquiry into the $300 million Whitefish Energy Holdings contract secured by the Puerto Rico Electric Power Authority, according to a source with knowledge of the inquiry.
The energy firm was contracted to rebuild the damaged electrical grid that was destroyed by hurricanes that struck the island. The Wall Street Journal was first to report the existence of the FBI probe.
If the FBI’s preliminary inquiry develops into a full investigation of the contract, it would join several other reviews of the contract already underway.
It wasn’t immediately clear what about the deal the FBI would be investigating. But members of Congress have raised concerns over the manner in which the contract for essential work to rebuild the island’s decimated grid was awarded to the small Montana company. The Federal Emergency Management Agency has also raised concerns over whether the amount of the contract awarded was reasonable.
The company also has ties to the Trump administration. The company is based in and named after the small hometown of Interior Secretary Ryan Zinke, and the CEO is an acquaintance of the secretary. An investment firm that owns a major stake in the company is run by a donor to Trump’s presidential campaign.
The company, Zinke, the White House, and PREPA have denied any wrongdoing in issuing the contract.
The Department of Homeland Security’s inspector general said it opened a review of the contract after a CNN report highlighted the contract and calls from members of Congress. The office said it considers the investigation to be one of its high priority cases. At least two committees on Capitol Hill have also asked questions about the contract.
However, the FBI field office in San Juan would neither confirm nor deny an investigation.
Whitefish Energy spokesman Ken Luce said the company has not been contacted by the FBI.
“While Whitefish is not aware of any such investigation, Whitefish is committed to full cooperation with any inquiry or investigation,” Luce told CNN. “The procurement of the PREPA contract was at all times fully appropriate. Our focus continues to be on our work in Puerto Rico completing the work PREPA has tasked Whitefish to complete including the repair of the second major transmission line.”