Puerto Rico’s $5.8B Power Deal Included Unregistered ‘Corporate Ghosts’

The Puerto Rico Electric Power Authority (PREPA) contracted with a “corporate ghost” when it allowed Enchanted Rock to sign a temporary power generation contract in June that would involve $5.8 billion in public funds. The company is not registered with the Puerto Rico Department of State or authorized to do business in Puerto Rico as a foreign entity, an investigative partnership among the Centro de Periodismo Investigativo, Jay Fonseca PR and Bonita Radio found.

“A foreign entity that is not authorized to do business in Puerto Rico is a corporate ghost under the law,” corporate law professor Luis Enrique Romero Nieves said of the requirement that corporations formed outside Puerto Rico must meet.

Enchanted Rock is considered a foreign corporation because it is registered in Texas and was therefore created under the laws of that jurisdiction.

The General Corporations Act establishes that “a foreign corporation may not do business in Puerto Rico directly, or through an agent or representative located in Puerto Rico” until it pays the required fees to the Department of State and submits documents including a certificate of existence and information about its officers and resident agent, among others. Enchanted Rock had not done so when the contract was signed June 10.

Romero Nieves added that authorization to do business is an important requirement that the Department of State has a duty to enforce “not on a whim, but to have minimum assurances about who those people are” within the corporations.

It is a simple process to make sure a company is not a “ghost,” he said, and “that people aren’t coming here to launder money, that there is a bona fide office, that there is a person with a first and last name who will answer the phone, who will accept service of process, who will represent the company in dealings with the government.”

The temporary power generation contract was signed June 10 between PREPA and a consortium formed by Power Expectations, Enchanted Rock and Reyes Contractor Group. Two days later, on June 12, Power Expectations replaced Enchanted Rock with Flotek Industries, a company registered in Delaware.

Mary C. Zapata Acosta, then PREPA’s executive director, told the investigative partnership that every contract signed by the head of the public corporation goes through several evaluation and review processes beforehand.

“In the case of the contract with Power Expectations, the contracting process was handled by 3PPO and, before it reached my office, it had already received approvals from the Authority’s Governing Board, the Puerto Rico Energy Bureau and the Financial Oversight and Management Board,” she said in writing.

Zapata Acosta added that PREPA’s Office of Legal Affairs also reviewed the contract and issued a recommendation memorandum stating that it had no objection to its execution. “Once that process was completed, the contract was referred to my office and I proceeded to sign it,” she said.

The 3PPO, or Third-Party Procurement Office, is the entity established by the Puerto Rico Public-Private Partnerships Authority (P3A) to conduct bidding processes in cases where private operators LUMA and Genera PR have a conflict of interest.

Flotek Is Not Registered in Puerto Rico Either

Power Expectations was required to obtain PREPA’s consent before replacing Enchanted Rock with Flotek, according to the signed contract. However, Zapata Acosta approved the substitution on July 31, 2026, a month and a half after Power Expectations had made the switch without the government’s knowledge.

PREPA’s approval of the change was also irregular because Flotek is not registered to do business in Puerto Rico either.

“The Seller [Power Expectations] shall not assign, transfer, pledge, or otherwise convey any of its rights or obligations under this Agreement without the prior written consent of the Buyer [Puerto Rico Electric Power Authority], which may be granted, withheld, or conditioned in the Buyer’s sole and absolute discretion,” Article XVI of the contract states.

As of publication, Enchanted Rock, its parent company ERock and Flotek Industries were not listed in Puerto Rico’s Registry of Corporations.

Warning Dates Back to 2025

In a report among the thousands of documents submitted to the Puerto Rico House of Representatives, Osvaldo Carlo Linares, head of the 3PPO, brought to PREPA’s attention that Enchanted Rock, now ERock, and Flotek, were not registered as foreign corporations in the Registry of Corporations. He said they had to comply with this and other legal requirements before participating in the project.

As early as August 2025, in a background report on Power Expectations and related companies sent to P3A, Carlo Linares stated that Enchanted Rock would have to register in Puerto Rico to do business and that it was unclear whether it had completed that process.

Regarding the substitution of Enchanted Rock with Flotek, Carlo Linares said in a July 30, 2026, communication sent to Zapata Acosta, with a copy to Josué Colón, that Flotek Industries was not registered as a foreign corporation with the Department of State and that it had to meet that requirement before the substitution process could be completed.

However, Power Expectations had already transferred Enchanted Rock’s rights and responsibilities to Flotek on June 12, 2026. Flotek’s board of directors had approved entering into the multibillion-dollar contract through a corporate resolution dated June 16. In that resolution, Flotek’s board said it had reviewed an agreement dated June 4. That date does not correspond to the contract that was signed June 10, but to one of two previous agreements that were invalidated and listed former Enchanted Rock President Corey Amthor as the company’s signatory. His name was replaced at the last minute by “Jhoby Weaks,” who signed the contract on behalf of Enchanted Rock. Jhoby Weaks is crypto entrepreneur Jobadiah “Joby” Sinclair Weeks, who was convicted in federal court in a multimillion-dollar cryptocurrency fraud case. ERock does not recognize him as an employee.

Carlo Linares also said Flotek had yet to submit a sworn statement required by the Anti-Corruption Code and certifications showing it had no outstanding debts with the Puerto Rico Treasury Department and the Municipal Revenue Collections Center (CRIM, in Spanish). However, he described those documents as “readily obtainable” and recommended moving forward with the substitution on the condition that Flotek submit them.

Carlo Linares has given two versions of how Flotek entered the contract. In a confidential report he submitted to Josué Colón, the so-called energy czar, on Aug. 8, he stated that, as part of measures taken to protect the project’s continuity, his office evaluated Power Expectations’ June 12, 2026, request to replace Enchanted Rock LLC with Flotek Industries “in accordance with the applicable contractual provisions.”

But on Aug. 24, in a report prepared for Gov. Jenniffer González, just after the public scandal led to the contract’s cancellation and multiple irregularities came to light, Carlo Linares said the agreement had already been signed and executed without prior notice to either his office or PREPA.

“Flotek is a very large U.S. public company that was brought into this scenario by Enchanted Rock,” Carlo Linares said Sept. 15 in response to questions from Rep. Adriana Gutiérrez Colón during a Puerto Rico House public hearing. He also said the Texas company did not use lobbyists to enter the contract.

During a public meeting held last week, Financial Oversight and Management Board Executive Director Robert Mujica questioned how quickly Flotek entered the contract.

“I think one of the most concerning things for us is that we approved the contract with additional conditions and safeguards on June 2nd. On June 10th the contract was executed and then on June 12th there was an alleged assignment. It is hard to believe that at the time on June 10th when the contract was signed, they did not know that some of the parties were not participating in the contract because it would be almost impossible to identify a new party to assign the contract to within 48 hours of the signing of the contract,” Mujica said.

Flotek describes itself on its website as a leading chemical and data technology company providing services to the energy industry in more than 59 countries worldwide.

‘Due Diligence’ Lacked Rigor

“Due diligence” is the process of thorough investigation and verification conducted before buying a company or signing a contract, allowing the parties to assess legal risks and other relevant matters disclosed by the other party.

Since November 2025, Enchanted Rock had told Power Expectations that it would not participate in the contract. It reiterated that position in communications issued in January and June 2026. There were letters from Power Expectations executives that Enchanted Rock interpreted as extortion intended to force it to sign the temporary power generation contract, according to a letter ERock sent to 3PPO on June 17, 2026.

“The due diligence, which I think is what was lacking here, required a level of rigor as broad and meticulous as the scale of the deal itself,” attorney Romero Nieves said.

On Aug. 3, 2026, Flotek announced to its investors that it had signed the contract with the Puerto Rico government, identifying Power Expectations as the consortium leader responsible for carrying out the project. The company’s shares began rising that day from $25.65 to a high of $38.81 over the course of the week, according to financial platform TradeView. Once reports began circulating in the stock market that the Oversight Board had ordered PREPA to cancel the contract, the shares plunged on Aug. 17.

Following the scandal and the cancellation of the Power Expectations contract on Aug. 18, investors sued Flotek for allegedly concealing, while promoting the project on Wall Street, warning signs that already existed regarding the consortium and its partners. The litigation is currently in its preliminary stages because the U.S. District Court for the Southern District of New York stayed the case until a lead plaintiff is appointed, no later than Oct. 26, to legally represent the class of affected investors.

The investigative partnership sought comment from attorney Carlo Linares, Flotek Industries, PREPA’s Governing Board and PREPA’s advisory and legal team, composed of Félix Hernández, Jorge Cotto and Alexis Rivera Medina, but none responded.

This translation was generated with the assistance of AI and reviewed by our editorial team to ensure accuracy and clarity.