The Lineman Got $63 an Hour. The Utility Was Billed $319 an Hour. (NYT)

The Lineman Got $63 an Hour. The Utility Was Billed $319 an Hour.

Jeffrey Bartel, a former senior executive at Florida Power & Light, the third-largest utility in the United States, said markups were routine in subcontracted work, as was charging double time for emergency work.

But “even at double time, the labor cost figures are empirically questionable,” Mr. Bartel said after reviewing the contract at the request of The New York Times. “Possibly most egregious is that this all takes place with a dire and desperate circumstance where people’s lives are at immediate danger without power, and, therefore, there is unequal bargaining position by Puerto Rico, which allows for the possibility of price gouging.”

In Puerto Rico, the reaction was more harsh and skeptical. Mr. Rodríguez, the former utility worker, says out loud what many critics say privately: that markups like those have been used in the past to pay kickbacks to corrupt officials.

Prepa has long dodged accusations that it created a slush fund by buying low-grade sludge and billing customers for high-grade oil.

Prepa would not answer specific questions or provide invoices because the matter is under investigation and the record no longer public. The company’s chief executive, Ricardo L. Ramos, said he had agreed to the contract because Whitefish did not demand money upfront, and decided to cancel it only because of the negative publicity.

“If people have the perception that there was an act of corruption where some benefited and became millionaires at the expense of the people of Puerto Rico, while they’re all going through a humanitarian crisis, look, that’s a huge offense,” he said at a news conference.

He acknowledged that Prepa could have contracted the Florida companies directly, but that it would then have had to feed and house the outside workers, which he said was more than the company could manage. He recently fired the company’s lawyer and procurement officer, and Prepa is now entering into its own mutual aid agreements with New York and Florida utilities.

Mr. Ramos and the Whitefish chief, Mr. Techmanski, deny any improprieties. Mr. Techmanski said he was the only one to rush to Puerto Rico under precarious conditions to get the lights back on. He told NBC News that he made contact with Prepa through LinkedIn in early September just before Hurricane Irma, an assertion Mr. Bartel said was so absurd that, if true, raised even more concerns about the due diligence that went into awarding the contract.

At a recent news conference, Mr. Ramos explained that Whitefish’s prices for subcontractors were high because initially it had to cover things like food and lodging. His explanation was unclear, though, because the contract has separate line items for such expenses.

He said that some of the more contentious clauses, like the one that suggested FEMA had reviewed and approved the deal, were included by accident, in what he described as “an oops.” PREPA IS NOW ENTERING INTO ITS OWN MUTUAL AID AGREEMENT WITH NEW YORK FLORIDA UTILITIES?

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via NYT

November 12, 2017 at 04:33PM

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