Having failed to receive information requested some 11 months ago from the Industrial Development Commission, Sen. Adlah "Foncie" Donastorg will take the agency, and specifically its executive director, to court.
Donastorg’s decision to take legal action against the IDC and Frandelle Gerard follows months of back and forth between the senator and Gerard over staffing at the V.I. Telephone Corp.
Vitelco is an IDC tax beneficiary that receives almost across-the-board, 100 percent tax breaks. Donastorg claims that Innovative Communication Corp., Vitelco’s parent company, has placed at least 50 workers from its sister companies onto the phone company’s payroll over the last year to reap tax benefits. Gerard and ICC contend the transfers are legal because the subsidiary employees are doing work for the phone company.
Donastorg’s press officer, Nicole Bollentini, said legal documents were being drawn up Wednesday to take Gerard and the IDC to court after another deadline passed Tuesday without Donastorg getting any of the documents he has requested.
"Sen. Donastorg is preparing the paperwork today regarding the Writ of Mandamus as he has not received the information he’s been seeking," Bollentini said. "He hopes to file that in the court of competent jurisdiction sometime Thursday."
The move followed a Senate hearing Wednesday morning in which Gerard explained the IDC’s efforts to investigate Vitelco and comply with Donastorg’s request for information. In both the hearing and a letter sent to Donastorg on Tuesday, which was the senator's deadline to receive documents relating to Vitelco’s IDC compliance records and consolidation efforts, Gerard chronicled the IDC’s nearly year-long attempt to check up on the phone company.
Gerard said she sent Donastorg a list of Vitelco workers’ names by Aug. 9, Donastorg’s first deadline. But Bollentini said that the list was all she sent and that it was one Donastorg had already had for months.
In her letter this week, Gerard said Donastorg’s request for the IDC’s compliance report on Vitelco is not ready to be unveiled to the public.
In her own chronicle of Vitelco’s employee consolidation, Gerard noted that Donastorg, on Sept. 29, 1999, wrote to her "regarding allegations of wrongdoings by Vitelco to include reports of failure to buy locally, extensive hiring of off-island workers, and ICC employees being paid by Vitelco."
Donastorg requested a preliminary report on the IDC’s findings before Oct. 11, 1999.
Almost 11 months later, Gerard said in her letter that, "To date, the compliance report is ‘preliminary’ and requires additional information before it is presented to the Industrial Development Commission."
Gerard said the preliminary report showed that for the four quarters prior to March 31, Vitelco had more than the 421 full-time employees required in its IDC contract. Between March 31, 2000, and June 30, however, out of the 452 employees in the company, 52 were found to be ineligible.
In her letter to Donastorg, Gerard said the staffing information has to be "collaborated" by the V.I. Labor Department and that the IDC has requested additional information to verify that the "employees deemed eligible are full-time employees in accordance with IDC regulations."
Meanwhile, she said the potential impact on the profits of Vitelco and its expenses is "germane" to the rate-making process, over which the IDC has no jurisdiction.
"We must defer to the Public Services Commission and the Federal Communications Commission," Gerard wrote. "We have been advised by the beneficiary that all payroll expenses for non-Vitelco related work is allocated to the proper ICC company and reported to the PSC and the FCC."
In her chronology of Vitelco’s consolidation, Gerard notes court action taken by one former member of ICC’s security team and a complaint received by the IDC from a employee of the ICC-owned Daily News, saying they were paid by Vitelco but never performed any work for the company.
In response to Donastorg’s allegations, ICC officials say that on the recommendation of a consultant, the company consolidated a variety of its subsidiary services, such as accounting; supervisory engineers; installers and repair personnel; administrative/executive assistants to chief executive officers; security; and customer service under Vitelco to cut costs.
ICC maintains that Vitelco is reimbursed by the Daily News, VitelCellular, VitelCom, EmCom Securities, ICC and its two cable companies for work done for the phone company by the subsidiary employees.
