Whitefish: The Unpleasant Truth

You’ve been reading for a couple of weeks about Whitefish Energy, a small Montana company (with all of two full-time employees) that shares a hometown with Secretary of the Interior Ryan Zinke.

You already know they were awarded a massive contract to repair hurricane damage in Puerto Rico, that the investors are personally acquainted with the Secretary and donated to the Trump campaign, that there’s been massive media outcry against them and a call for Congressional investigation.  You might even be aware that the F.B.I. has started their own investigation, that the governor of Puerto Rico has demanded that their contract be revoked, and that the contract itself contains some unusual clauses that have raised eyebrows across the country.

That’s all been reported in detail by every media outlet, and it has all the elements of a traditional pay-to-play corruption scandal.

Let me tell you what they aren’t reporting.

Now, bear something in mind here:  I’m no award-winning investigative journalist.  I didn’t go digging in secret underground archives; I’ve made no trips to Montana to have clandestine meetings with plaid-wearing lumberjack types at the neighborhood barbecue (that would be Notorious P.I.G. in Missoula; amazing variety of styles and killer brisket; tell ’em who sent ya).  I’ve never even been to Montana, much less Puerto Rico.  Everything I’m telling you here is readily available from public sources, and it’s all solid; it all checks out.

First off:  Whitefish Energy isn’t really owned by personal friends of Ryan Zinke.

Yes, it’s true their founder, an experienced lineman named Andy Techmanski, is a personal friend.  They’re both successful businessmen from the same small town in the middle of bloody nowhere, and what would be truly shocking is if they didn’t personally know each other.  It’s not as though they’re both from Morningside Heights or something; Whitefish has a population of about six thousand after the ski season is over.

But the true owner of Whitefish Holdings is actually a Brazilian transformer manufacturer, Comtrafo S.A., which is (or perhaps isn’t?) building a huge manufacturing plant not far from company H.Q.  Techmanski still has a large interest, and he functions as operations manager, but he answers to other people — including not only Comtrafo but other minority shareholders, private capital investors based largely in Dallas.

Second:  Whitefish employs more than two people.

Like most contractors, Whitefish does a lot of their business using subcontractors and hired equipment.  They specialize in seasonal work and rapid-response contracting, all of which is temporary.  It would be insane for them to try to keep skilled crews on payroll — and idle — during parts of the year that they’re not on contract, so instead they go outside for almost everything.  For the Puerto Rico job, they initially brought in small companies from Florida:  Jacksonville Electric, Kissimmee Utility, and Lakeland Power And Light.

When I say “brought in”, I don’t mean to say that they rented a couple of slow barges or anything.  Whitefish contracted with Volga-Dnipr Transport to move crews and trucks and helicopters on massive cargo planes.  To do that sort of thing on a rush basis costs millions, and they spent it.  They also transported enough logistics and support to house and base their entire crew, because the local power company (quite reasonably) couldn’t manage it.

At last count, there are more than four hundred people on the job in Puerto Rico under Whitefish contract, assembling towers and running transmission lines through hurricane-blasted former rainforest.  They’re working three shifts in hundred-degree heat and paying double overtime — which those linemen deserve.  This is dangerous work; I’m talking about live power lines, hundred foot towers, tropical diseases, and the very real chance of dying from heat stroke.

They’ve been working for a month, and my guess is that in that time payroll has easily topped ten million dollars.  November’s will be two to three times that amount.

Third:  They’re doing more than just repairing hurricane damage.

It’s been common knowledge on the Hill for twenty years that Puerto Rico’s electrical infrastructure was failing.  It’s a public corporation, and the prices are regulated by the local government.  The cost per KwH on the island is almost twice that charged on the mainland, and yet there’s nowhere near enough money coming in to maintain plants and transmission lines — much less to bring them up to a modern standard.

A recent piece on FiveThirtyEight explained in detail why Puerto Rico’s electric grid stood no chance against Maria.  You should read it; it’ll go a long way toward explaining the present situation.

Right now, the island’s power grid is gaining a long-needed upgrade.  It won’t be to modern standards, unfortunately, but it’ll at least approach effectiveness.  And yes, that’s going to cost a lot of money.

The Bottom Line

Whitefish was awarded a contract in the amount of $300 million.  Their job, among other things, was to repair or replace transmission lines and distribution networks across the worst-hit parts of Puerto Rico, in the eastern third of the island.  Payroll, equipment rental, transport, and logistics will account for the majority of that money, and Whitefish will do a first-class job — unlike the Puerto Rico Electric Power Authority, which simply can’t afford to.  What’s more, they’ll do it for less than the expense incurred by the Army Corps of Engineers, which is doing an outstanding job on the coastal power reconstruction.  It will cost at least double that of using local workers, but it’ll also get the job done three months sooner.

I’m not going to tell you there’s no corruption involved here.  Actually, historical precedent in no way contradicts the thought that somewhere, someone snagged a huge briefcase full of cash in order to direct this contract to a Comtrafo subsidiary.  That’s not due to Comtrafo being terribly corrupt; they’re not, at least not when compared to other Brazilian manufacturers.  It’s because PREPA, along with the other three public utility corporations in Puerto Rico, the various local politicians, and the governor’s office itself are all notoriously corrupt and have been for as long as they’ve been in existence.

But I will say that Secretary Zinke by all accounts has not acted inappropriately in this matter, that Whitefish Energy itself has likely been above reproach (though I won’t speak for their corporate owners), and that President Trump could not have received any material benefit from influencing the contract award — which he really couldn’t have done in any case.  This is a misdirected political hatchet job.  It’s politically motivated, and it’s aimed at casting mud at Trump and his friends — and never mind whether it sticks, because it’s going to force them to publicly deny it.  Good God, but politics is a slimy business.

And nobody has paid me a dime to write about it.  Certainly not cash slipped to me concealed in a brown paper sack while I was sitting at Blue’s BBQ in Billings enjoying some amazing smoked sausage.  (You’d never expect legendary barbecue to be tacked onto the side of a gas station in Billings Heights, right behind Stockman’s Bank.  Go figure.)  Because, again, I’ve never even been to Montana.

Not that I wouldn’t accept paper bags full of cash, mind;  I love the idea.  Too bad I’m not working for a utility company in Puerto Rico.  Or being rushed to Montana for secret meetings; I hear they’ve got some great barbecue.


Just Some Of My Sources

https://twitter.com/WhitefishEnergy

https://en.wikipedia.org/wiki/Whitefish_Energy

https://www.elnuevodia.com/noticias/locales/nota/laaeeacogepeticiondelgobernadorparacancelarcontratoawhitefish-2370050/ — That’s the price, the effectiveness, and the three months quote.

https://www.wsj.com/articles/fbi-is-probing-puerto-rico-power-contract-1509379394

http://www.transparency.org has a huge file on Puerto Rico.

http://www.dailymail.co.uk/wires/ap/article-3827566/4-guilty-1-Puerto-Ricos-biggest-corruption-cases.html

http://cfif.org/v/index.php/commentary/43-taxes-and-economy/2990-puerto-ricos-untold-tale-of-corruption — Biased site, but verified.

http://freebeacon.com/issues/charity-linked-to-big-labor-only-employs-scandal-plagued-governors-brother/ — Just a blog, but Goodman is solid.

http://nypost.com/2017/09/30/inept-puerto-rican-government-riddled-with-corruption-ceo/

https://www.globalsecurity.org/military/world/caribbean/pr-corruption.htm — You’ll have to pay for the full report, and no you can’t read my copy, cheapskate.

https://theconservativetreehouse.com/2017/09/30/puerto-rico-cop-calls-u-s-radio-station-reporting-corrupt-mayor-of-san-juan-and-request-for-help/ — I distrust this site, but the call is real, it’s been verified, and they’ve got the best transcript.

You can also read my other articles on the subject, particularly:
https://gnerphk.wordpress.com/2016/04/27/is-puerto-rico-getting-screwed-again/

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