U.S. top court to review Montana dispute over religious school subsidies

A man stands outside the U.S. Supreme Court in Washington, U.S., June 27, 2019. REUTERS/Carlos Barria

By Andrew Chung

WASHINGTON (Reuters) – In a case that could once again test boundaries for the separation of church and state, the U.S. Supreme Court on Friday agreed to decide the legality of a Montana state tax credit that could help students attend private schools including religious ones.

The justices took up an appeal by three mothers of Christian private school students of a decision by Montana’s top court striking down the program because it ran afoul of a state constitutional ban on aid to religious institutions.

Churches and Christian groups have pushed for expanding access to public dollars for places of worship and religious schools, testing the limits of secularism in the United States.

The decision to hear the case could give the justices an opportunity to build on a major 2017 ruling that sided with a Missouri church and opened the door to more taxpayer funds going to religious entities.

In that case, the justices ruled that churches and other religious entities cannot be flatly denied public money even in states where constitutions explicitly ban such funding, siding with a church that sued after being denied access to a state grant program that helps nonprofit groups buy rubber playground surfaces made from recycled tires.

Much litigation over the years has involved school “voucher” programs and other subsidies to help parents pay for children to attend private religious schools, in states whose constitutions explicitly ban such funding. Republican President Donald Trump’s education secretary, Betsy DeVos, is a prominent supporter of such “school choice” plans.

(Reporting by Andrew Chung; Editing by Will Dunham)

More floods loom as high river waters recede in Midwest

FILE PHOTO - The Kansas side of the Missouri River is seen in Atchison, Kansas, U.S., March 22, 2019 in this picture obtained from social media. SHAWN RIZZA/via REUTERS

By Karen Dillon

KANSAS CITY, Mo. (Reuters) – Record floods that submerged parts of three Midwestern states bringing death and destruction were retreating in Kansas City on Monday but icy tributaries in Montana and the Dakotas threatened more floods for weeks to come, the National Weather Service said.

High flood waters have already returned in the western Dakotas, northwest Nebraska and central and eastern Montana, along smaller rivers that feed into the Missouri, David Roth, a meteorologist with the NWS’s Weather Prediction Center in College Park, Maryland, said on Monday.

Warmer weather makes the once solid river ice break-up into giant chunks, like mini-icebergs, Roth said.

“The ice floats down river until it bunches up in what we call an ice-jam, like a dam, causing flooding,” he said.

“All that backed-up water is eventually going downstream,” Roth said. “It’ll come down the Missouri in a couple of weeks, and maybe hit Kansas City in mid-April.”

Midwest floods were unleashed last week after a “bomb cyclone” storm dumped torrential rains on hundreds of square miles (km) of the snow-covered Plains.

The record flows cascaded down the Missouri, the country’s longest river, killing at least four people, drowning livestock and closing dozens of roads in Nebraska and Iowa. Property losses were estimated at more than $3 billion in those two states.

Those flood waters crested near Kansas City on Sunday, the weather service said.

No further precipitation is forecast for the Midwest until midweek, when moderate rainfall is expected, NWS’s Andrew Orrison said Sunday.

“I think at the worst what it will do is just prolong the gradual receding of the water levels across the various river basins throughout the Midwest.”

The current flooding threatens Kansas City’s drinking water. More than 600,000 customers in the Kansas City metropolitan area were asked to conserve water as flood-levels in the Missouri River created “treatment challenges,” the city’s water utility said on Sunday.

But far up the nation’s longest river, floods loom again.

The Billings Gazette reported late Sunday that rapid snow melt drove ice jams on the Little Bighorn River, forced the shutdown of a stretches of major highways in eastern Montanta all the way to the Wyoming border.

But the bigger threat is warmer temperatures that will hit the upper 60s in Billings by Tuesday and into midweek, driving more snowmelt that will eventually flow south, said meteorologist Roth.

“All that water is still headed downstream,” he said.

(Reporting by Karen Dillon; Additional reporting and writing by Rich McKay in Atlanta; additional reporting by Peter Szekely and Andrew Hay, Editing by William Maclean)

U.S. judge orders federal protection restored to Yellowstone grizzlies

FILE PHOTO: A grizzly bear roams through the Hayden Valley in Yellowstone National Park in Wyoming, U.S. on May 18, 2014. REUTERS/Jim Urquhart/File Photo

By Laura Zuckerman

PINEDALE, Wyo. (Reuters) – A federal judge on Monday ordered Endangered Species Act protections restored to grizzlies in and around Yellowstone National Park, halting plans for the first licensed trophy hunts of the bears in the region in more than 40 years.

U.S. District Judge Dana Christensen in Missoula, Montana, sided with environmentalists and native American groups by overruling the U.S. Fish and Wildlife Service decision to strip the grizzlies of their status as a threatened species.

The outcome caps one of the most high-profile legal battles over the Endangered Species Act in many years, rivaling previous disputes surrounding the gray wolf and northern spotted owl.

The ruling came as the Trump administration is seeking to rewrite Endangered Species Act regulations that scientists say would erode wildlife protection for the benefit of commercial interests.

The Trump administration’s decision in June of last year to “de-list” the grizzly, formally proposed in 2016 during the Obama era, was based on agency findings that the bears’ numbers had rebounded enough in recent decades that federal safeguards were no longer necessary.

The de-listing, welcomed by big-game hunters and cattlemen, had applied to about 700 Yellowstone-area grizzlies in Wyoming, Idaho and Montana.

Environmentalists countered that treating those bears separately from other grizzly populations in Montana and elsewhere in the Lower 48 states was biologically unsound and illegal under the Endangered Species Act, and the judge agreed.

Grizzlies, which are slow to reproduce, number fewer than 2,000 bears across the Lower 48. That is far below an historic high of 100,000 before widespread shooting, poisoning and trapping reduced the bears’ population to just several hundred by 1975, when they were placed under federal protection.

Environmentalists have said that while grizzlies have made a comeback, their recovery could falter without continued federal safeguards. They point to, among other things, alterations in the bears’ food supply from climate change and human threats posed by poachers and road traffic.

JUDGE FINDS REASONING ‘ILLOGICAL’

Christensen found that the Fish and Wildlife Service had failed to apply the best available science, as required under the law, in evaluating continued threats to grizzly populations, including limitations in its genetic diversity.

The judge pointed to two studies cited by the agency that he said actually contradicted the government’s own conclusions that the Yellowstone grizzlies could remain genetically self-sufficient. In his 47-page opinion, Christensen called the agency’s reasoning “illogical.”

The judge’s ruling makes permanent a court order barring Wyoming and Idaho from going ahead with plans to open grizzly hunting seasons allowing as many as 23 bears in the two states to be shot and killed for sport outside of Yellowstone park. The season had been set to begin on Sept. 1.

U.S. law prohibits hunting altogether inside the park, and Montana had decided against a grizzly hunt, citing its concerns about long-term recovery of a bear population that is arguably one of the most celebrated and photographed in the world.

Native American tribes, which revere the grizzly as sacred, sought reinstatement of its threatened status as essential to protecting their religious practices.

Ranchers, who make up a powerful political constituency in Western states, have strongly advocated de-listing grizzlies, arguing the bears’ growing numbers pose a threat to humans and livestock. Agitation for state management of the bears also came from hunters, who highly prize them as trophy animals.

The judge said he discounted such factors.

“This case is not about the ethics of hunting and it is not about solving human- or livestock-grizzly conflicts as a practical or philosophical matter,” he wrote. Instead, it turned strictly on his determination that the Fish and Wildlife Service had exceeded its authority.

The agency said it stood by its de-listing action, adding the was reviewing the ruling and “considering next steps.”

Wyoming Governor Matt Mead, a staunch critic of the Endangered Species Act, said he was “disappointed” by Monday’s decision, citing $50 million he said his state had spent on grizzly management over the past 15 years.

(Reporting by Laura Zuckerman; Writing by Steve Gorman; Editing by Sandra Maler)

Storm barrels through U.S. Midwest with snow and frigid temperatures

Satellite image from the National Weather Service. 2-9-18

By Brendan O’Brien and Suzannah Gonzales

MILWAUKEE, Wis./CHICAGO (Reuters) – A major winter storm barreled into Chicago and Milwaukee early on Friday, dumping heavy snow and dropping temperatures well below freezing as it forced schools to close and threatened to leave travel at a stand still across the Midwest.

The storm system stretches from western Montana across the Dakotas and parts of Minnesota, Wisconsin and Illinois, and reaches as far east as southern Michigan. The storm could drop up to 14 inches (36 cm) of snow in some areas, the National Weather Service said.

Chicago was anticipating six to 12 inches of snow early on Friday morning with more snow expected over the weekend, according to the service’s weather forecast.

“The city is ready for this,” Chicago Mayor Rahm Emanuel said during a news conference about the city’s preparedness on Thursday. “Make no mistake though, this is a heavy snow, heavier than we’ve seen in a number of winters.”

City officials announced school closures in Chicago, Detroit and Milwaukee because of the weather.

Wind chill temperatures were expected to drop below 0 Fahrenheit (-18 C) in many areas across the region, and officials warned of limited visibility on roads.

Chicago’s O’Hare and Midway international airports canceled more than 200 flights on Thursday before the storm hit, and several airlines were also anticipating delays or cancellations.

United Airlines said on Twitter that waivers were in effect for snow-hit areas this week allowing travelers to change flights without charges, and Delta Air Lines offered to rebook flights on Friday for 18 Midwest cities.

Winter weather across the United States this week killed several people in accidents in the Midwest, including six in Iowa, two in Missouri and one in Montana, local media in those states reported.

(Editing by Peter Graff)

Killer Storm brings freezing rain and snow to U.S. Northeast

(Reuters) – A winter storm packing freezing rain and heavy snow was expected to sweep across much of the U.S. Northeast on Wednesday, snarling transportation, closing dozens of schools and threatening power outages.

The same storm system has killed several people in accidents in the Midwest since Monday, including six in Iowa, two in Missouri and one in Montana, local media in those states reported.

Much of the region from southern Indiana northeast through Maine was under either a winter storm watch or warning. Some 6 to 12 inches (15 to 30 cm) of snow and a 1/4 inch (.5 cm) of ice accumulation were in the forecast, the National Weather Service said.

“Travel will be dangerous and nearly impossible,” the service said, warning that ice may cause widespread power outages.

Dozens of school districts in the East Coast, including in Pittsburgh and Albany, New York canceled classes on Wednesday while Baltimore schools delayed the start of school for two hours. Federal agencies in Washington D.C. were also opening two hours later than normal.

About 800 flights within, into or out of the United States were canceled on Wednesday nationwide, according to the FlightAware tracking service.

(Reporting by Brendan O’Brien in Milwaukee; Editing by Frances Kerry)

Supreme Court divided over Ohio voter purge policy

Activists rally outside the U.S. Supreme Court ahead of arguments in a key voting rights case involving a challenge to the OhioÕs policy of purging infrequent voters from voter registration rolls, in Washington, U.S., January 10, 2018.

By Andrew Chung

WASHINGTON (Reuters) – Conservative and liberal U.S. Supreme Court justices appeared at odds on Wednesday in a closely watched voting rights case, differing over whether Ohio’s purging of infrequent voters from its registration rolls — a policy critics say disenfranchises thousands of people — violates federal law.

The nine justices heard about an hour of arguments in Republican-governed Ohio’s appeal of a lower court ruling that found the policy violated a 1993 federal law aimed at making it easier to register to vote.

Conservative justices signaled sympathy to the state’s policy while two liberal justices asked questions indicating skepticism toward it. The court has a 5-4 conservative majority.

“The reason for purging is they want to protect voter rolls,” said Justice Anthony Kennedy, a conservative who often casts the deciding vote in close decisions. “What we’re talking about is the best tools to implement that purpose.”

The Supreme Court’s ruling, due by the end of June, could affect the ability to vote for thousands of people ahead of November’s midterm congressional elections.

States try to maintain accurate voter rolls by removing people who have died or moved away. Ohio is one of seven states, along with Georgia, Montana, Oklahoma, Oregon, Pennsylvania and West Virginia, that erase infrequent voters from registration lists, according to plaintiffs who sued Ohio in 2016.

They called Ohio’s policy the most aggressive. Registered voters in Ohio who do not vote for two years are sent registration confirmation notices. If they do not respond and do not vote over the following four years, they are purged.

Ohio’s policy would have barred more than 7,500 voters from casting a ballot in the November 2016 election had the Cincinnati-based 6th U.S. Circuit Court of Appeals not ruled against the state.

Voting rights has become an important theme before the Supreme Court. In two other cases, the justices are examining whether electoral districts drawn by Republican lawmakers in Wisconsin and Democratic lawmakers in Maryland were fashioned to entrench the majority party in power in a manner that violated the constitutional rights of voters. That practice is called partisan gerrymandering.

The plaintiffs suing Ohio, represented by liberal advocacy group Demos and the American Civil Liberties Union, said that purging has become a powerful tool for voter suppression. They argued that voting should not be considered a “use it or lose it” right.

Dozens of voting rights activists gathered for a rally outside the courthouse before the arguments, with some holding signs displaying slogans such as “Every vote counts” and “You have no right to take away my right to vote.”

“This is about government trying to choose who should get to vote. We know that’s wrong,” U.S. Senator Sherrod Brown, a Democrat from Ohio, said at the rally.

Democrats have accused Republicans of taking steps at the state level, including laws requiring certain types of government-issued identification, intended to suppress the vote of minorities, poor people and others who generally favor Democratic candidates.

A 2016 Reuters analysis found roughly twice the rate of voter purging in Democratic-leaning neighborhoods in Ohio’s three largest counties as in Republican-leaning neighborhoods.

The plaintiffs include Larry Harmon, a software engineer and U.S. Navy veteran who was blocked from voting in a state marijuana initiative in 2015, and an advocacy group for the homeless. They said Ohio’s policy ran afoul of the 1993 National Voter Registration Act, which prohibits states from striking registered voters “by reason of the person’s failure to vote.”

Ohio argued that a 2002 U.S. law called the Help America Vote Act contained language that permitted the state to enforce its purge policy. Republican Ohio Secretary of State Jon Husted noted that the state’s policy has been in place since the 1990s, under Republican and Democratic secretaries of state.

(Reporting by Andrew Chung; Editing by Will Dunham)

Erie, Pennsylvania, buried under record snowfall, ” a crippling snow event”

Silas Stueve plays in the snow after two days of record-breaking snowfall in Erie, Pennsylvania, U.S., December 27, 2017.

By Jon Herskovitz

(Reuters) – A storm that has dumped more than 65 inches (165 cms) of snow this week on Erie, Pennsylvania, is expected to slightly taper off on Wednesday after leaving drifts that buried cars, paralyzed the area and made the county declare an emergency.

A general view of 1925 State Street after the record snowfall in Erie, Pennsylvania, U.S., December 26, 2017 in this picture obtained from social media.

A general view of 1925 State Street after the record snowfall in Erie, Pennsylvania, U.S., December 26, 2017 in this picture obtained from social media. Courtesy of Instagram @BLJEFFERYS /via REUTERS

But the respite for Erie, a city of about 100,000 in northwest Pennsylvania on the shores of Lake Erie, is expected to be short-lived, with a fresh round of winter storms coming Thursday night predicted to bring as much as 10 inches more snow, forecasters said.

“This is a crippling snow event,” said Zach Sefcovic, a meteorologist with the National Weather Service in Cleveland.

“They are no strangers to snow in that part of the state, but this much snow in that short a time is just unprecedented,” he said in a telephone interview.

Large parts of the United States were gripped by freezing weather, with an area stretching from Montana to Maine expected to see temperatures below 10 degrees Fahrenheit (-12.2 degrees Celsius) early on Thursday, the National Weather Service said.

People help dig out a car from a parking spot after two days of record-breaking snowfall in Erie, Pennsylvania, U.S., December 27, 2017.

People help dig out a car from a parking spot after two days of record-breaking snowfall in Erie, Pennsylvania, U.S., December 27, 2017. REUTERS/Robert Frank

The winter blast in Erie was caused by cold Arctic air moving over the lake, which had relatively mild water temperatures, forecasters said.

The storm broke a 59-year-old record for a two-day snowfall in Pennsylvania, topping the 44 inches that fell in 1958. Erie County Executive Kathy Dahlkemper issued a temporary disaster emergency declaration that mobilized resources to help the area.

Pictures of residents on social media showed drifts reaching beyond window-levels in houses and people clearing paths through chest-high accumulations.

“Out of Doritos. Family is arguing. Dogs are getting ornery. It’s been 3 days since my last chicken wing. We are out of whiskey,” wrote Nicole Massari on her Instagram account @theworldaroundnikki, along with a video showing her Pennsylvania home surrounded by snow.

Pennsylvania Governor Tom Wolf deployed 21 Pennsylvania National Guard troops along with some all-terrain military vehicles to the region on Tuesday to help residents dig out and transport emergency responders around the area.

Erie resident Brian Sheridan on Wednesday posted a photo on social media showing the top of his mail box peeking out underneath a mound of snow. In a caption, he wrote: “At this point, it just might be easier to put a hold on our mail until spring.”

(Reporting by Jonathan Allen in New York and Jon Herskovitz in Austin, Texas; Additional reporting by Lisa Maria Garza in Texas; Editing by Steve Orlofsky and Andrew Hay)

Nebraska regulators approve Keystone XL pipeline route

A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska March 10, 2014.

By Kevin O’Hanlon and Valerie Volcovici

LINCOLN, Nebraska/WASHINGTON (Reuters) – Nebraska regulators voted on Monday to approve a route for TransCanada Corp’s Keystone XL pipeline through the state, lifting the last big regulatory obstacle for the long-delayed project that U.S. President Donald Trump wants built.

The 3-2 decision by the Nebraska Public Service Commission helps clear the way for the pipeline linking Canada’s Alberta oil sands to refineries in the United States, but is likely to be challenged in court by opponents who say the project is an environmental risk.

The commission’s approval was not for TransCanada’s preferred route, but for a slightly longer alternative that could prove more difficult and costly to build. It was unclear whether the company will decide to pursue the project as it considers the commercial viability.

TransCanada did not immediately respond to a request for comment on the commission’s vote.

TransCanda stock rose as much as 2 percent to the session’s high of C$63.80 after the decision, while the broader Canada stock index was up 0.2 percent.

Trump, a Republican, has made Keystone XL’s success a plank in his effort to boost the U.S. energy industry. Environmentalists, meanwhile, have made the project a symbol of their broader fight against fossil fuels and global warming.

The proposed line has been a lightning rod of controversy since it was first advocated nearly a decade ago. The administration of former President Barack Obama, a Democrat, considered the project for years before rejecting it in 2015 on environmental grounds, under pressure from activist groups.

Trump swiftly reversed that decision after coming into office this year, handing TransCanada a federal permit for the pipeline in March and arguing the project will lower fuel prices, boost national security, and bring jobs.

Nationwide, Trump has said Keystone XL would create 28,000 jobs. But a 2014 State Department study predicted just 3,900 construction jobs and 35 permanent jobs.

Trump’s decision placed the pipeline’s fate into the hands of the obscure regulatory body in Nebraska, the only state that had yet to approve the pipeline’s route. Permits along Keystone XL’s proposed 1,179-miles (1,897-km) path have been approved in Canada, Montana and South Dakota.

Opposition to the line in Nebraska has been driven mainly by a group of around 90 landowners whose farms lie along the proposed route. They have said they are worried spills could pollute water critical for grazing cattle, and that tax revenue will be short-lived and jobs will be temporary.

A lawyer for the landowners, Dave Domina, said the commission’s decision was a partial victory, because it denied TransCanada its preferred route. But he added: “We will carefully evaluate the Order and meet with our clients.”

Billionaire environmental activist Tom Steyer denounced the commission’s decision. “We will not stop making our voices heard until this project is dead,” he said in a statement.

Just days ago, TransCanada’s existing Keystone system spilled 5,000 barrels in South Dakota and pipeline opponents said the spill highlighted the risks posed by the proposed XL expansion.

An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota, U.S., in this photo provided November 18, 2017.

An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota, U.S., in this photo provided November 18, 2017. Courtesy DroneBase/Handout via REUTERS

The project could be a boon for Canada, which has struggled to bring its vast oil reserves to market. But there are questions about demand for the pipeline after a surge in drilling activity in the United States.

 

(Reporting by Kevin O’Hanlon and Valerie Volcovici; additional reporting by Nia Williams and Ethan Lou in Calgary; Writing by Richard Valdmanis; editing by Grant McCool)

 

Tiny Montana firm’s Puerto Rico power deal draws scrutiny

A pick up from Montana-based Whitefish Energy Holdings is parked as workers (not pictured) help fix the island's power grid, damaged during Hurricane Maria in September, in Manati, Puerto Rico October 25, 2017. REUTERS/Alvin Baez

By Susan Heavey, Richard Cowan and Scott DiSavino

WASHINGTON/NEW YORK (Reuters) – Federal emergency officials raised “significant concerns” on Friday about a $300 million contract between Puerto Rico’s storm-hit power utility and a tiny Montana firm, as Democratic lawmakers stepped up calls for an investigation of the deal.

The Federal Emergency Management Agency said in a statement that after its initial review it “has not confirmed whether the contract prices are reasonable” under the agreement between Puerto Rico Electric Power Authority and Whitefish Energy Holdings, a two-year-old firm with just two full-time employees.

The contract between PREPA and Whitefish was awarded without a competitive bidding process.

Whitefish spokesman Ken Luce said the deal was secured when its chief executive and co-owner, Andy Techmanski, flew to Puerto Rico on Sept. 26, six days after Hurricane Maria tore into the bankrupt U.S. territory and knocked out power to all 3.4 million residents.

The contract, and the slow restoration of power on the island, has raised questions about who is effectively managing PREPA’s response to the hurricane, as about 75 percent of homes and businesses still lack electricity after several weeks.

Jose Roman, interim chairman of Puerto Rico’s Energy Commission, said the commission is looking into how Whitefish got the contract as part of a larger investigation to “determine the prudence of the actions of PREPA; not just the Whitefish contract,” he said.

PREPA did not respond to requests for comment.

Puerto Rico’s financial oversight board earlier this week said it would appoint an emergency manager to oversee PREPA, though that has met with pushback from Governor Ricardo Rossello, who may challenge such an effort in court.

It took more than a week after Maria hit the island for a damage assessment to be completed by PREPA, the chronically underfunded state utility. Eventually, FEMA put the U.S. Army Corps of Engineers in charge of short-term power restoration.

 

ZINKE: I HAD “NOTHING TO DO” WITH CONTRACT

A growing number of U.S. lawmakers have raised questions about the contract, the slow pace of power restoration, and Interior Secretary Ryan Zinke’s connections with Whitefish.

Representative Raul Grijalva, the senior Democrat on the Natural Resources Committee, and Representative Peter DeFazio, the top Democrat on the Transportation Committee, asked the Department of Homeland Security’s inspector general in a letter to investigate the contract’s execution, its terms, and “whether there was any political impetus behind the contract.”

The representatives noted that Whitefish is based in Zinke’s hometown and that Zinke’s son once worked for Whitefish. The letter also stated that a Whitefish financial backer, HBC Investments, was founded by Joe Colonnetta, a contributor to President Donald Trump’s campaign, as well as “many other Republican candidates.”

Zinke said in a release that “I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico.” After the initial contract was awarded, “I was contacted by the company, on which I took no action,” he said.

White House spokesman Raj Shah said that the administration’s “understanding” was that the contract was awarded solely by PREPA, and they are “not aware of any federal involvement” in the deal.

U.S. Senate Democrats urged FEMA and the U.S. Army Corps of Engineers in a letter to unify efforts to restore power on the island.

They also called on FEMA and PREPA to name a top official to oversee all electrical contracts, and urged federal officials to more quickly clear crews from two companies, Fluor Corp <FLR.N> and PowerSecure, so they can begin restoration work.

Several utilities are involved in restoration, including Fluor, Whitefish, JEA, New York Power Authority, and others. Whitefish and its subcontractors have more than 300 people on the island, Luce said.

Techmanski first got in touch with PREPA following Hurricane Irma, during a bidding process to repair damages from that storm, which hit Puerto Rico two weeks before Maria, Luce said.

A copy of the contract surfaced online Thursday night, raising more questions, particularly over language blocking oversight of costs and profits.

“In no event shall PREPA, the Commonwealth of Puerto Rico, the FEMA administrator, the Comptroller General of the United States or any other authorized representatives have the right to audit or review the cost and profit elements,” said the document, published by several media outlets, whose authenticity was confirmed by Democratic staffers for the Natural Resources Committee.

House Democratic Leader Nancy Pelosi called for the immediate termination of the contract, saying “no federally-funded contract should be immune from routine oversight or circumvent a federal audit.”

Costs listed for hourly wages ranged in the hundreds of dollars and daily per diems of more than $330 for accommodations and nearly $80 for food, according to the “bid schedule” published online. The document put the cost of one-way airline flights for employees at $1,000.

Luce defended the deal, saying the company welcomed an audit or questions from Washington. “The contract was done in good faith with PREPA,” he said.

Rossello has also defended the contract, even as he ordered an audit. Initial results of the audit are expected to be released later on Friday, according to NBC News.

 

(Reporting by Susan Heavey, Richard Cowan, Timothy Gardner; additional reporting by Scott DiSavino, Jessica Resnick-Ault and Nicholas Brown; editing by Tom Brown and Diane Craft)

 

Puerto Rico oversight panel seeks outside manager for power utility PREPA

Workers from Montana-based Whitefish Energy Holdings help fix the island's power grid, damaged during Hurricane Maria in September, in Manati, Puerto Rico October 25, 2017. REUTERS/Alvin Baez

By Nick Brown

NEW YORK (Reuters) – The federal board overseeing Puerto Rico’s finances said on Wednesday it intends to appoint an outside manager to lead the island’s power utility, PREPA, in cleanup efforts following Hurricane Maria.

But Puerto Rico’s government is pushing back on the move, and may challenge it in court as an unauthorized power grab, according to a source familiar with Governor Ricardo Rossello’s thinking.

The board, in a written statement, announced “intent to appoint” retired U.S. Air Force Colonel Noel Zamot as PREPA’s chief transformation officer.

Zamot, who has worked with the board in a separate capacity, would be responsible for expediting reconstruction efforts, the board said.

U.S. lawmakers have criticized PREPA’s hiring of Montana-based Whitefish Energy Holdings to help fix the island’s power grid, decimated when Hurricane Maria made landfall on Sept. 20. Some Congress members were concerned that Whitefish was hired without a bidding process, and despite the fact that the two-year-old firm had only two full-time employees.

The controversy reawakened feelings among lawmakers and Puerto Rican investors that officials at PREPA are not competent to lead the quasi-public utility, whose $9 billion debt load pushed it into bankruptcy in July.

The storm cut power to the entire island. As of Monday, just 18 percent had been restored, according to U.S. Department of Energy data.

The board’s announcement on Wednesday was also reigniting an ongoing power struggle between Puerto Rico’s government and the board appointed last year to manage the island’s precarious finances.

Created under a federal Puerto Rico rescue law known as PROMESA, the board is to help Puerto Rico regain access to capital markets after it filed the largest-ever U.S. government bankruptcy in May.

The island, trudging through a decade-long recession, has $72 billion in debt and near-insolvent public health and pension systems.

Rossello and the board have clashed, including on austerity measures like public employee furloughs.

In a statement on Wednesday, Rossello said the board’s powers are limited by law to financial issues, while management of island agencies “rests exclusively on democratically elected officials.”

“Puerto Rico will be zealous in defending the people from any action that seeks to undermine this process,” Rossello said in a statement in Spanish.

The source familiar with Rossello’s thinking told Reuters his administration may challenge in court the board’s authority to appoint an outside manager at PREPA.

“It might have to be challenged in court, and the government is willing to go that way,” said the source, who was not authorized to speak to media and requested anonymity.

Rossello’s administration separately has its own concerns about Whitefish and the lack of transparency surrounding its PREPA contract, and plans to investigate those issues, the source said.

(Reporting by Nick Brown; Editing by James Dalgleish and David Gregorio)