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FEMA: No funds spent on controversial Whitefish contract - KXLF.com | Continuous News | Butte, Montana

FEMA: No funds spent on controversial Whitefish contract

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FEMA's administrator said Tuesday that "not one dollar" of the agency's money has been used to pay Whitefish Energy Holdings, the company that received a controversial contract with the Puerto Rico Electric Power Authority to help restore the battered power grid.

That leaves it unclear how the young company will be reimbursed for the nearly month of work it has completed, considering the island's government and utility authorities both filed for bankruptcy this year. The contract, signed in late September, called for an initial $3.7 million payment, followed by reimbursement of up to $300 million for completed satisfactory work.

FEMA administrator Brock Long told members of the Senate Homeland Security and Governmental Affairs Committee that his agency would not have signed off on the contract, had it been made aware of it.

"There's no lawyer inside FEMA that would've ever agreed to the language that was in that contract to begin with," Long said. "There was also language in there that would suggest that the federal government would never audit Whitefish -- which, there's not a lawyer inside FEMA that would ever agree to that type of language."

Long spoke as several arms of the federal government are looking into the contract. The FBI has opened a preliminary inquiry into the contract, a source familiar with the review told CNN on Monday. An inspector general and several congressional committees are also asking questions.

Key to the inquiries are whether the contract was entered into appropriately. The company's ties to the Trump administration have also raised eyebrows. The company is based in the small Montana 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 President Donald Trump's presidential campaign.

The company, Zinke, the White House, and PREPA have denied any wrongdoing in issuing the contract.

A top official with the Army Corps of Engineers explained Tuesday his understanding of why the company turned to Whitefish Energy, rather than mutual aid agreements with utilities elsewhere in the US.

"They did outreach at some point for mutual aid," Maj. Gen. Donald Jackson said.

The island's "financial situation" meant utility companies "were hesitant to engage" out of concern they would not be paid, Jackson said. PREPA then struck the agreement with Whitefish.

Calls to Whitefish were not immediately returned on Tuesday.

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