The Saga of the Virgin Islands territorial dept.
At Island News, it is our contention that the Virgin
Islands Territorial Government has evolved, over the years, to a
bloated bureaucracy saturated with minor corruption throughout
the governmental maze. The territorial government has
accumulated a mind-boggling mountain of debt that condemns the
islands to a failure of public services on a grand scale.! The
Virgin Islands Property Owners Association has called for a
federal control board to superimpose financial controls on the
out of control local political culture of non stop irresponsible
use of taxpayers monies. One example of this irresponsibility
is the graphic below which shows the per capita size of the
territorial government compared to selected states.
Finally, beginning in January of 2003, a series of events have
occurred which began focusing the eyes of federal officials on
the USVI.
1. In a December 2002 last gasp of greed, the outgoing lame
duck territorial senate, at the behest of the governor, voted
itself and the governor huge raises totally out of proportion to
the affordability of the Virgin Island Government not to mention
totally unreasonable for a tiny island community not even on the
same scale of responsibility as even the smallest state.
Finally after a decade of ambivalence, the local population
came alive and staged grand scale demonstrations, thus forcing
the governor to veto the pay raises.
This action for the very first time forced the Virgin
Islands Government to back off on one of its unreasonable
actions designed to benefit the local politicians at the expense
of all residents.
2. And secondly, in another unexplainable move, it was
discovered that the governor had pushed through a $3.6 million
dollar contract to work on the St Croix sewer system. The
contract was not released to the public and was made in secret
to a firm with no assets, no experience, and one employee. The
governors assistant was recently the president of this
mysterious company, a senators husband was the sole employee,
and the company had been organized by a local attorney who had a
history of extracting surprising amounts of money from the V.I.
Government. In another strange twist, it was revealed that the
Governor had received notice from the company before the
contract was signed that the sewer work would require more than
twice the amount of the planned $3.6 million contract. Never
the less the Governor executed the contract with little public
announcement. As all of this came to the publics attention, the
U.S. Attorney brought the V.I. Government into federal court to
hold hearings on this entire suspicious business. Immediately
the Governor canceled the contract with no explanation leaving
locals to think that the Governor was trying to avoid federal
hearings.
In March 0f 2003 a federal judge, writing that the
sewer contract reeks of politics and quite possibility, of
political corruption, issued a decision ordering the
territorial government to hire an independent contractor to
operate the St Croix sewer system. The federal judge warned the
government not to issue any more contracts without proper
competitive bidding.
3. Then in July of 2003 the government was once again caught
awarding a plumb contract, without bidding, to a company named
Communications Technology(COMTEK). The contract was for
unspecified work to a politically connected company that
reportedly had no experience in the work it was hired to do, no
business license and no office in the VI. The contract was
awarded by the Public Finance Authority, who supposedly have the
charter to manage the process of issuing territorial government
bonds. One of the first tasks contracted to COMTEK under this
contract was to provide project management to upgrading the
Police Department communication system. Uncovering this
contract led local reporters to look into the police
communications systems and the discovery that COMTEK had
subcontracted with St Thomas based Bronx Communications, owned
by a Hughroy Thomas, to undertake actual project
responsibilities. Once this was understood, a torrent of
discoveries came to light such as the fact that Bronx
Communications had sold the VI government more than 450
substandard police walkie talkies at four times the market
price. These were walkie talkies that would not have been
allowed in normal police departments. Of course this explains
why police often have such a difficult time communicating in the
VI. Additionally Bronx Communications managed the government
radio transmission towers, which upon inspection were found to
be a dilapidated mess with the government towers being used by
private companies for transmission of taxi frequencies, business
transmission and even drug deals, all being leased to their
users by Bronx Communications. The result of all of these
discoveries is a more widespread understanding of the utter
incompetence and prolific corruption within the territorial
government.
4. With federal agencies, gaining more and more insights into
the problems of the territorial government, the first federal
take over of a VI agency occurred in August of 2003 when the
U.S. Department of Housing and Urban Development(HUD) formally
took power away form the territorial government and assumed
control of the territories Housing Authority over the objections
of local politicians. Like most of the territories agencies,
the Housing Authority was a fiscal basket case that had the
capacity for infinite waste. Now for the first time the
precedence has been set for federal control.
5. In early 2004 a series of developments began to unfold which are
leading down a path that we at the Virgin Islands Property Owners
Association believe will change the "Quality of LifePossibilities" for residents
and property owners in these islands.
A. Not withstanding the fact that the territorial government was what can
only be described as a catastrophic financial mess, In December of 2003
the Virgin Islands Senate passes a 2004 budget that prescribed spending at
a level of $627 million. This was simply outlandish, even by VI
politicians level of historical irresponsibility. As a result the Governor had to
veto the budget which meant that the budget would be fixed at the level of
2003 which was $588. Even at $588 there will be a deficit estimated by
Island News to be $85 million and it could easily be $120 million. This
scenario has shown the world that VI politicians cannot even begin to manage
their own affairs and increased the justification for a federal control
board. The out of control situation is now sufficiently obvious that
the Delegate to Congress has split with local politicians and is
introducing fiscal control legislation for the VI into the US congressional
process.
B. In the final days of 2003 investigative reporting by the Virgin
Islands Daily News newspaper detailed a history of the outlandish use
of "Deadly Force" by the Virgin Islands Police Department. This
reporting has triggered an investigation of the VI Police Department by the
Federal Justice Department. In tandem with the investigative report, the
newspaper did an informal survey of island residents which on the
surface showed wholesale mistrust of the Virgin Islands Police Department. So,
in the aftermath, we now have another federal agency inserting itself into
the very center of the managerial process yet another organizational
structure of the territorial government. Another example of how the local
government is devoid of acceptable management and accountability.
C. In late February of 2004, the U.S. Attorney brought formal
criminal charges against the group of people who were center pieces in the sewer
scandal contract described in point 2 above. In our view this is
hugely significant because this event goes to corruption right into the very
top levels of the Virgin Islands Government. A former assistant to the
governor, a prominent senator who ran for governor and a local attorney
who has been involved with companies that have a history of extracting
outlandish sums of money from the territorial government, all have
been named. Not named, but connected in such a way that makes one wonder
how they could not have been involved are the governor and the VI Attorney
General. While this indictment will not be settled quickly, it sets in
motion a whole set of investigative activities that will draw down the
ability of VI politicians to defend their culture from outside intervention.
D. In June of 2004 the U.S. House of Representatives Resources Committee
held hearings on a new piece of legislation introduced by the Virgin Islands
Delegate to Congress. This legislation would establish a Financial
Control Officer to take control of the finances of the U.S. Virgin
Islands. Obviously this initiative is contested by the local VI
politicians who would lose control of their own finances, but it is
supported by the Delegate to Congress, by the Republican Party of the
Virgin Islands, by the Virgin Islands Property Owners Association and
by many residents of the U.S. Virgin Islands.
E. In September of 2004 the U.S. House of Representatives, against the
wishes of the Department of Interior, passed HR 3589 sponsored by the Virgin
Islands Delegate To Congress, which creates a Chief Financial Officer
for the USVI. This legislation we see as the beginning of the end of
financial irresponsibility by the territorial government and the U.S. Department
of Interior in allowing this disastrous situation to develop in the first
place. This will still take a lot of time to come to fruition but the
next step is the U.S. Senate.
F. During the final months of 2004 two things happened that are factors
giving more momentum to a forcible imposition of fiscal responsibility on VI
politicians:
1. In the November elections Delegate to Congress Donna Christensen
racked up a 66% vote count giving her a wholehearted endorsement for her bill
before the U.S. Congress creating a fiscal control officer for the
Virgin Islands. Delegate Christensen was opposed by her own party apparatus
in the VI and the Governor and most senators for her actions creating this
legislation so this resounding vote count gives her all kinds of
political support showing people in the islands want fiscal responsibility. This
more or less insures that this issue will continue to be pushed at the
federal level giving those of us that yearn for better government with
accountability encouragement that the days of irresponsible government
in the U.S. Virgin Islands are drawing to a close.
2. The EDC program, which grants huge income tax benefits to
corporations relocating to the Virgin Islands, was under threat by the IRS because
U.S. residents were changing their residence to the islands to escape
stateside income tax liabilities. As with most programs and projects
administered by the territorial government, there was wide spread incompetence
administering this program which funneled $100 annually into the VI
treasury. Without this incremental $100 million of revenue the VI
government would have faced payless pay days and the governmental
structure would have been bankrupt as early as 2003. During the second half of
2004 the territorial government is attempting to restructure this program in
a way that does not violate U.S. treasury imperatives.
G. In 2005, with a new Congress in session it was necessary for the
House of Representatives to again pass Donna Christensens legislation, now under the number
HR 62. Now all that remained was for the Senate to hold committee hearings, pass the
legislation and then a Presidential signature. All this was scheduled to go ahead in
September of 2005 and along came Hurricane Katrina which obviously diverted attention
from the previous agenda. The Senate Energy and Resources Committee that deals with
Territories is again scheduled to bring this piece of legislation to its hearing table
in October or November if they can get past the urgencies brought about by the hurricanes
of 2005. For now it seems to be a matter of waiting action by the Senate Energy and
Resources Committee and the momentum of this new fiscal control will be upon us (WE Hope).
H. January 2007- A new Governor has now been elected that is from a
completely different mold than past governors. The new governor has
a background of commercial experience which has been lacking from
governors of the past 20 years. In a most unusual move, for Virgin
Islands politicians, this governor has endorsed the concept of a
Chief Financial Officer, he has been adverse to expanding the
territorial government debt and he has begun the process of
appointing people based on experience in the field rather
than politician affiliations. This has created a huge wave of hope
that we may have begun to turn the corner in the USVI as far as
creating a responsible territorial government. This would have huge
positive ramifications for residents and future property
owners, While one man can obviously not solve everything, this may
be a very critical step. It should also be pointed out that a
residual body of traditionally oriented senators in the VI senate
voted themselves absurdly large raises at the end of 2006, to the
point that the Virgin Islands Senators are now the most richly
compensated state/territory legislators under the U.S. flag(excluding
California). Quite a feat for a small group of islands with less
than 110,000 total population and the highest per capita debit of any
governmental organization under the U.S. flag. But, what we can all
take solace in is that local citizens on St Croix rose up to organize
a recall petition to these irresponsible politicians who just
continually condemn the residents of the VI to suffering debt. While
the recall has not been successful, we take great comfort to know
that the residents of these islands are beginning to react to the
insufferable mess imposed on island residents by these irresponsible
politicians.
I. Shortley after taking office the new Governor back tracked on his support of the Chief Financial Officer Bill thereby disappointing those that voted for him because of his stance on this issue. The excuse offered up was that the Virgin Islands has gained enough fiscal control that the Chief Financial Officer legislation is no longer needed. Fast forward to July of 2008 the local Daily News newspaper published a complete report showing how the hospital system on St Thomas had either been duped or had complicity in hiring an individual to head up the hospital system on St Thomas who was a Navy vet who had been court martialed and dishonorably discharged , By July 2008 this guy was given a compensation package amounting to $536,000 per year. In addition other high officers were given outlandish pay increases all while the hospital system could not make payments to vendors so that drug deliveries and equipment maintenance fell behind affecting the treatment of time critical cancer therapies. A Total health care system disaster. All this happened off the radar screen of the Governor. The governor quickly appointed new members to the hospital oversight board but the damage is done. Clearly the fiscal administration of the Territory of the United States Virgin Islands needs oversight that it does not have. It remains to be seen whether the Governor will now endorse the idea of a Chief Financial officer for these islands.
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