Money & Politics

Are These the Faces of Crony Capitalism?

A multimillion-dollar contract to restore power in Puerto Rico went to an administration ally.

Are These the Faces of Crony Capitalism?


Update: On October 29, 2017, the head of Puerto Rico’s government power company said the agency will cancel its $300 million contract with Whitefish Energy.

A small, 2-year-old utility company that had just two employees on the day Hurricane Maria made landfall has been awarded a $300 million contract to help restore power to Puerto Rico.

That company, Whitefish Energy Holdings, is located in Whitefish, Montana, 3,391 miles from Puerto Rico.

It is, however, well connected to the Washington DC swamp that Donald Trump promised to drain. The CEO, Andy Techmanski, knows Interior Secretary Ryan Zinke. The company is financed by HBC Investments, which was founded by Texan Joe Colonnetta, whose deep pockets helped finance Trump’s presidential campaign and contributions to the Republican National Committee.

Since this story broke, Whitefish and Zinke have had a hard time deciding what message to send. Whitefish wrote some regrettable tweets to the mayor of San Juan, Carmen Yulín Cruz, when she questioned the transparency of the deal:

Whitefish has apologized for the tweets and the White House has issued a statement to the effect that to its knowledge, no one in the administration influenced the contract. Puerto Rico Gov. Puerto Rico, Ricardo Rossello, who supported the contract, has requested that the inspector general of the Department of Homeland Security review the contract process as soon as possible.

Then, last night, a copy of the contract behind the controversial deal emerged online. Parts of it seemed designed to prevent government oversight.

Now Congress is pushing for answers, with at least one member of Congress calling for Whitefish to be investigated. FEMA, meanwhile, is airing its “significant concerns” about the contract, noting that it “has not confirmed whether the contract prices are reasonable.” The contract asserted that FEMA approved the deal, but the agency took issue: “Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate,” FEMA said in a statement posted today.

This story is far from over. In the meantime, get caught up and follow the furor at any of the news organizations below:

And if you want to read up on the rules for obtaining a federal contract — here’s some information from the US Small Business Administration.

Photo credits: Donald Trump (Michael Vadon/Wikimedia Commons CC 2.0); Ryan Zinke (Gage Skidmore/Flickr CC 2.0); Andrew Techmanski (© Bill Weir/CNN); Joe Colonnetta (Facebook)