Sen. Adlah "Foncie" Donastorg is now targeting the Industrial Development Commission in his one-man war against the Virgin Islands Telephone Corp.
In a harshly worded release Tuesday, Donastorg blasted IDC Executive Director Frandelle Gerard for stalling his efforts to determine whether Innovative Communication Corp., Vitelco's parent company, is using the phone company as a tax shelter for ICC’s other subsidiaries.
Donastorg said the IDC has no current records on Vitelco and, despite Gerard's contention, no report on Vitelco's transfer of Daily News and other subsidiaries' employees to its payroll.
Vitelco is an IDC tax beneficiary and receives almost 100 percent tax breaks. Over the past month, Donastorg has alleged that ICC is placing workers from its subsidiary companies onto the Vitelco payroll to reap that company’s tax benefits. Both ICC and Gerard say the transfer of employees is legal and part of a consolidation process.
ICC owns Vitelco, Vitelcellular, Vitelcom, the Virgin Islands Daily News, St. Thomas-St. John Cable TV, St. Croix Cable TV, ICC TV and V.I. Powernet. ICC employs approximately 660 people and is owned by St. Croix businessman Jeffrey Prosser.
Donastorg claims that by placing the subsidiary employees on Vitelco’s payroll, telephone ratepayers are being forced to subsidize ICC’s other enterprises — and Tuesday he charged that at least 50 employees of the subsidiaries, including Prosser's personal security guards, are on the Vitelco payroll.
In addition, he said that Gerard was either withholding quarterly and annual IDC reports that pertain to the transfer of subsidiary employees to Vitelco or that the reports don’t exist.
"IDC never approved the practice and no such report exists," Donastorg said. "In fact, it’s been nearly a year since anything at all was filed on Vitelco."
Donastorg said he has made a half-dozen trips to IDC offices on St. Thomas to view reports on the payroll transfers. On the latest trip he said Gerard told him she could not release any information without permission from Attorney General Iver Stridiron because of confidentiality laws.
"This is just a stalling tactic," Donastorg said. "Maybe the IDC director needs more time to fabricate the information I have requested. If the reports exist, she must turn them over to me – the law is clear about that…"
But Gerard did not back down. She said that if the attorney general advised her to release the documents, she would. If not, Donastorg would not be able to view them. The issue, Gerard said, is confidentiality. The reports are full of information about employees, including salaries, Social Security numbers and addresses.
"He asked for them and I indicated that once I got the word, I’ll let him know," Gerard said. "My staff has been advised that until this information is authorized for release by the attorney general, we’re not giving anything up."
Gerard dismissed Donastorg’s accusations that the IDC hasn’t been monitoring the movement of ICC employees to Vitelco’s payroll. She said that in addition to Federal Communications Commission audits, IDC staffers have been looking into the issue for six months.
"This is not news in my book," she said.
Donastorg said that if the IDC has reviewed Vitelco’s payroll and found the company is in compliance with its tax benefit agreement, he should, under V.I. Code, be able to see the results.
Still, Gerard said there is a need to protect investors, especially those new to the territory. Additionally, she said the IDC-Vitelco contract is public record, as is part of the company’s application that doesn’t deal with financial information. That is held back because Vitelco is a privately held company.
"Investors have to have a degree of confidence that confidentiality exists," she said.
"I don’t work for Sen. Donastorg," she said. "I work at the pleasure of Gov. (Charles W.) Turnbull and I’m guided by the laws of the IDC. Donastorg can’t tell the executive branch what to do."
Donastorg said "many in government are aware of Vitelco's questionable tactics but are engaged in a 'conspiracy of silence.'"
