Federal probe focusing on Power Expectations contract intermediaries
By THE STAR STAFF
The federal probe into the now-cancelled Power Expectations temporary energy production contract is focusing on whether intermediaries, such as consultants, broke the law, according to sources, which did not pinpoint a specific target in the probe.
The Financial Oversight and Management Board revoked its approval of the $5.8 billion contract after learning that one of the companies in the consortium, Enchanted Rock, claimed that the signature on the document was illegal and unauthorized, prompting numerous questions.
Jobadiah “Jhoby” Sinclair Weeks, who appeared as a signatory for Enchanted Rock in documents tied to the project, is cooperating with the probe, the sources said. As previously reported by the STAR, according to a lawsuit filed recently by Power Expectations that seeks to reinstate the contract, Enchanted Rock in June of this year began to have second thoughts about executing the contract, presumably because its parent company, ERock, was in the process of making an initial public offering and was planning to start trading in The New York Stock Exchange.
Fearing the contract’s collapse, Power Expectations exercised its authority under a memorandum of understanding with Enchanted Rock that gave it full authority to represent the company on the island, and approved a resolution designating the signatories in the contract, including Weeks, who signed on behalf of Enchanted Rock. The resolution was forwarded to the Third Party Procurement Office (3PPO), a company hired by the Puerto Rico Public-Private Partnership Authority to handle the transaction, but Power Expectations said it does not know whether the 3PPO, managed by Osvaldo Carlo Linares, informed the Puerto Rico Electric Power Authority (PREPA).
Later, Power Expectations replaced Enchanted Rock with Flotek Industries.
Former PREPA Executive Director Mary Carmen Zapata Acosta, who resigned last week, has provided information to investigators, emphasizing the role of intermediaries, according to the sources. Zapata has said she signed the Power Expectations contract after consulting with Carlo.
Zapata reportedly told investigators she was kept in the dark about the situation with Enchanted Rock. She claims the 3PPO was aware of questions surrounding the company’s involvement before PREPA learned of them, and that this information was not shared with her.
The Power Expectations agreement intended to secure 400 megawatts of temporary generation -- has unraveled amid allegations of misrepresentation, conflicts of interest, and failures in due diligence. PREPA formally terminated the contract in August after the company failed to deliver a required performance bond and after the oversight board revoked its approval.
Carlo and Zapata are slated to testify in public hearings investigating the contract next week.
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