Visiting the remote headquarters of Whitefish Energy, recipient of controversial contract
The Trump administration denied Friday that political connections had anything to do with restoring electrical connections in Puerto Rico.
A contract worth $300 million was awarded to a tiny company called Whitefish Energy in Whitefish, Montana, hometown of Interior Secretary Ryan Zinke. Zinke said Friday he had nothing to do with the contract.
CBS News correspondent David Begnaud set out Friday to find the headquarters of the company -- somewhere in the middle of nowhere.
Nestled down a long gravel driveway in Whitefish is a one-story wooden house that is the home of Whitefish Energy.
This tiny energy company has only two full-time employees, and surprised many when it received a $300 million no-bid contract to help rebuild Puerto Rico's electrical grid. Whitefish has never worked on a project of this size.
Whitefish CEO Andy Techmanski says his company has 300 workers on the ground in Puerto Rico working to fix a crippled electrical system. A month after Hurricane Maria devastated Puerto Rico, 75 percent of the island is still without power.
The controversy over the no-bid contract set off a Twitter feud between the mayor of San Juan, Carmen Yulin Cruz, and the company.
Cruz believes the deal with Whitefish Energy should be voided. She described the company as "inadequate" and asked for transparency.
Whitefish hit back by threatening to leave, writing, "We've got 44 linemen rebuilding power lines in your city & 40 more men just arrived. Do you want us to send them back or keep working?" The company later apologized.
As CBS News was leaving headquarters for Whitefish Energy, a van showed up and blocked the street, and now the driver is speaking with the sheriff. Whitefish released a statement that said they were proud of work they are doing and will cooperate with Congress.
Lawmakers and federal officials are calling for investigations to determine how and why Puerto Rico's bankrupt government utility awarded Whitefish the lucrative deal, CBS News' Julianna Goldman reports from Washington.
"This was a contract that was determined by the local authorities in Puerto Rico," White House Press Secretary Sarah Huckabee Sanders said. Sanders on Friday distanced President Trump from the $300 million dollar contract, even as Mr. Trump addressed the controversy with Zinke during a previously scheduled closed-door meeting.
"He did ask Secretary Zinke just for clarification purposes and he reiterated once again that we no role -- the federal government -- and specifically he had no role in that contract," Sanders said.
But the contract says the Federal Emergency Management Agency (FEMA) "reviewed and approved" the agreement. On Friday, FEMA said it was "not involved" and any language that says it was "is inaccurate."
The Department of Homeland Security's inspector general will perform an audit. But there's one aspect of the deal that appears to be off limits.
The contract says federal and state officials "don't have the right to review the cost and profit elements of the labor rates," like $462 dollars per hour for a subcontractor site supervisor, and time and a half for anyone working over 40 hours.
The inspector general will look "for the presence of any inappropriate relationships."
In addition to Whitefish's connection to Zinke, one of the company's top investors has given tens of thousands of dollars to Republicans, including Energy Secretary Rick Perry, Sens. Marco Rubio and Ted Cruz -- and Mr. Trump.
In a statement, Zinke said he had absolutely nothing to do with the contract and he welcomes all investigations into the allegations. Late Friday, House Minority Leader Nancy Pelosi called on the contract to be "terminated immediately."
