Vermont Sen. Bernie Sanders on Friday demanded Congress do everything in its power to nullify a $300 million rebuilding contract between Puerto Rico and Whitefish Energy Holdings, a two-person Montana energy company with little experience in large-scale grid repair.
“From everything that I have seen, I think it’s an outrage,” Sanders said after a press conference in San Juan. “I think the idea that the government or the appropriate authority did not look for mutual aid and call up utility companies in the United States, which is what is normally done, surprises me.”
Sanders, who’s a member of both the Senate Energy and Environment and Public Works committees, said Congress “sure can hold hearings and we sure can do everything that we can” to push to nullify the contract.
“It smells badly to me,” he added. “We’ll be looking at every aspect of this contract. I am on the energy committee; we will be demanding hearings as well.”
The Puerto Rico Electric Power Authority, known as Prepa, opted to hire a for-profit company to restore electricity to Puerto Rico’s 3.4 million residents instead of going for a “mutual aid” agreement that has helped others rebuild after natural disasters.
“The kind of compensation packages that we are looking at seems to be extraordinarily high,” Sanders said. “We learned today that apparently there was a provision in the contract that says the government cannot audit the profits or the salaries that are taking place which is simply not acceptable, and in fact is illegal. This is federal money. And our job is to make sure that Puerto Rico is rebuilt as quickly as possible, as effectively as possible, as cost-effectively as possible.”
Under the contract, Whitefish is charging $330 an hour for a site supervisor and $227.88 an hour for a “journeyman lineman.” Subcontractors, who make up most of Whitefish’s workforce, cost $462 per hour for a supervisor and $319.04 for a lineman.
“Now what I worry about, not only in Puerto Rico, but when billions of dollars comes in to reconstruction, there are people out there who are going to try to make as much money as they possibly can, in any way possible,” Sanders said. “And our job is to say, ‘No.’ This is taxpayer dollars. Money has got to be spent cost effectively. The money should not go — excessive profits should not be going to into the hands of large companies. That money should be used to improve the lives of the people impacted.”
The Trump administration has already distanced itself from the contract. The White House, the Federal Emergency Management Agency, and Interior Secretary Ryan Zinke all said Puerto Rican officials were responsible for having signed the deal. Zinke, who comes from the same Montana town as Whitefish Energy, said he had “absolutely nothing” to do with the company receiving the contract.
Sanders addressed both the island’s immediate and long-term needs after meeting with locals and government officials during his visit to San Juan on Friday. He pointed out that besides water, electricity, food, and opening up schools, the process of reconstruction should also deal with figuring out how to adopt sustainable energy sources and rebuild housing that won’t be blown away in the next hurricane.
“It is no secret that before the hurricane, Puerto Rico faced very, very serious economic problems,” he said. “Poverty rates, very high, higher now. Unemployment rates much, much too high. Puerto Rico is saddled with a debt of some $73 billion.”
Sanders went on, “It would be absolutely unacceptable for the vulture funds on Wall Street to squeeze this island dry and take resources that are desperately needed here for education and housing and infrastructure to give it to greedy, greedy people on Wall Street.”
As for the $4.9 billion loan Senate passed last week as part of a $36.5 billion hurricane relief bill, Sanders said it’s his expectation that the loan “will be converted into a grant” or “forgiven as a loan.”
In three or so weeks, Sanders said, there will be a big debate in Congress over a supplemental disaster relief package, which will include substantially more money for Puerto Rico, Florida, Texas, and the Virgin Islands.
BuzzFeed reporter Nidhi Prakash reports that Gov. Ricardo Rosselló has requested that the power authority cancel Whitefish Energy’s contract:
Breaking: P.R. Gov Ricardo Rosselló says he's asking the power authority to cancel Whitefish Energy's contract amid investigations— Nidhi Prakash (@nidhiprakash) October 29, 2017