All the parties involved in the lawsuit surrounding the Southern Energy-V.I. government deal to sell 80 percent of the Water and Power Authority were claiming a modicum of victory following a Territorial Court judge’s decision Tuesday.
Earlier this year, St. Croix community activist Gail Watson Chiang filed suit against the V.I. government, Southern Energy and several WAPA board members. Among the complaints filed by Chiang and her attorney, Lee Rohn, were that Gov. Charles Turnbull didn’t have the authority to enter into negotiations with the company and that by dealing only with Southern local competitive bidding laws were violated.
Turnbull subsequently submitted the sale proposal to the Legislature for its approval. The proposal would give the Atlanta-based company 80 percent ownership of WAPA in a deal worth between $380 million and $400 million over 25 years. The immediate value to the government is about $148 million, including the forgiveness of $31 million the government currently owes WAPA and other indebtedness.
Of the $14 million, Southern Energy would pay the government approximately $105 million in cash up front.
On Tuesday, Territorial Court Judge Alphonso Andrews dismissed the counts against Turnbull and Southern Energy. He also dismissed counts against WAPA board members Andrew Rutnik, Arthur Downing, Dean Plaskett and Ira Hobson. They were all on the government’s negotiating team that went to Southern’s headquarters in Atlanta last summer. Chiang alleged that first-class airfare and rooms at the Ritz Carlton, among other things, were paid for by Southern.
Andrews let stand Chiang’s contention that the Public Finance Authority’s financing of the initiative, particularly the hiring of consultants, was illegal in that the PFA can only fund capital improvement projects. That issue will be addressed in an Aug. 22 hearing.
"Really, it’s a great victory. I think the judge was fair and just," Chiang said, adding that the survival of the PFA count showed the case had merit. "The issue now is how much money they have expended, which is millions, to determine if that was legal or illegal and if they have to pay it back."
Meanwhile, James O’Bryan, a Turnbull administration spokesman, said that government officials had yet to be fully briefed on the decision Tuesday night. Still, he said the dismissal of the counts against the government, Southern Energy and the WAPA board members supported the governor’s decision to enter into negotiations with the company.
"In large part, the decision is one that is favorable to the governor and his position," O’Bryan said. "The governor continues to support the proposal and feels he was operating within the confines of his authority as chief executive."
Because administration staff hadn’t seen Andrews’s decision Tuesday evening, O’Bryan was reluctant to comment on the outstanding decision on the PFA.
"In the long run, the governor feels the court will hold up his decision" to enter into negotiations with Southern Energy, O’Bryan said.
Andrews dismissed several of the counts because they were not yet "ripe." If the Legislature approves the sale proposal, Chiang said the dismissed counts will be viable.
"The issue of ripening was an issue we had to face a long time ago. We had to go ahead and file it rather than wait," she said. "Once the Legislature makes a decision . . . that will make them ripe.
"We’re in the fight. It ain’t over."
