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HomeNewsArchivesGERARD TESTIFIES; JACOBS-DOW MISSING AGAIN

GERARD TESTIFIES; JACOBS-DOW MISSING AGAIN

One administration official was a no-show and another gave much-awaited testimony Wednesday at a Senate Labor and Veterans Affairs Committee meeting called to address employment practices of Industrial Development Commission beneficiaries. And a third brought gloomy news on both employment and taxes.
IDC executive director Frandelle Gerard testified, along with Economic Research Bureau acting director Lauritz Mills. But, for the second time in three days, the absence of Labor Commissioner Sonia Jacobs-Dow impeded the hearing process.
On Monday, Jacobs-Dow failed to appear at a hearing for which she had been asked to testify concerning her department's troubled Workers' Compensation Division. Sen. Roosevelt David, the committee chair, said then that he would subpoena her to appear to answer questions about Workers' Comp.
Clearly frustrated at her absence again Wednesday, David read aloud from a letter he said he had received Wednesday morning from Jacobs-Dow's office. It stated that she had returned from a medical visit to Puerto Rico, and that her doctor had ordered bed rest upon her return. She also said her two assistant commissioners "who would be the appropriate representatives" were off-island. Attempts during the meeting to reach the third assistant commissioner, John Sheen, were unsuccessful.
Sheen was the only Labor official to testify at the Monday committee meeting, but he told the senators he did not have the information requested.
Addressing the ‘hot issue'
Although not a member of David's committee, Sen. Adlah "Foncie" Donastorg was very much in evidence at Wednesday's hearing. For almost a year, Donastorg has been demanding that Gerard provide information on the IDC benefits of the V.I. Telephone Corp. and on its personnel practices which he claims are in violation of IDC regulations. He had threatened to take the IDC and Gerard to court if he didn't receive certain documents by Tuesday.
In her testimony Wednesday, Gerard first provided information requested by David's committee. She said the IDC has heard from 28 applicants over the last two years. New IDC applications, she said, represent more than $1.9 million in new investment capital, more than $26.6 million in payroll outlays, and more than 1,338 new or retained jobs.
Completing her statement to the committee, Gerard then said, "Let's address the hot issue."
She proceeded to read off a chronology of events dating from Donastorg's first assault on Vitelco and the IDC last year.
There ensued much sparring between Donastorg and Gerard about who was in charge of the documents and who could release them. Gerard maintained that the IDC is preparing a report which is in the "preliminary stages," and that it cannot be made public until it is completed. The IDC has requested a full labor-compliance review of Vitelco and has enlisted the assistance of the Labor Department, she said.
She said that IDC compliance officer Margarita Benjamin is preparing the report and that, after commission review, it will become a public document. She reiterated, "The 'working papers' of the staff cannot be released at this time."
Vitelco work force below minimum for last quarter
In a letter sent to Donastorg on Aug. 14, Gerard wrote that Vitelco had not met the IDC requirement of a minimum 421 full-time employees for the last quarter, from March 31 through June 30 of this year. But she said the information needs to be corroborated by the Labor Department and then further reviewed by the IDC.
David said he would call another Labor and Veterans Affairs Committee meeting within 15 days. And he vowed to subpoena Labor officials to testify at that meeting – a vow he repeated throughout Wednesday's meeting, as one issue after another was left unresolved for lack of Labor Department input.
Benjamin was asked to testify on her position as the IDC's acting – and only – enforcement officer.
Asked by Sen. Donald "Ducks" Cole, another non-member of David's committee, who approves the appointment of an IDC enforcement officer, Gerard responded, "That's the million-dollar question."
Who knows where IDC belongs?
It is unclear what government department the IDC falls under, Gerard told the committee. Prior to the creation of the Tourism Department in the last administration, it was within the Economic Development and Agriculture Department, as was Tourism. Now, Gerard said, the Office of Management and Budget and the Departments of Finance and Personnel can't figure out where it belongs. The government section of the local telephone directory places it under the "Government Development Bank."
Benjamin explained after the meeting that the problem lies in identifying where the commission's budget falls. She said the budget fund for the IDC is not attached to any department. The IDC funds are separated from Tourism and from the Government Development Bank, and put into a miscellaneous account. Legislation is pending which would reorganize the IDC.
Cole commented, "It's a system set up to fail."
Committee member Gregory Bennerson listened and looked on in disbelief. "I have one word," he said. "Unbelievable." He added that he was sure Benjamin was getting a "real, and not 'acting,' salary," which Benjamin confirmed.
Under further questioning, Gerard explained that the IDC works with U.S. Customs and the Bureau of Internal Revenue to keep tabs on beneficiaries' activities, "closing the gap" on violators. But she said the commission has no authority to impose penalties on beneficiaries without going through a "lengthy process with hearings."
The Economic Research Bureau's Mills, another "acting" official, supplied some figures on the sagging V.I. economy. She said a rise in private-sector wages from $600 million in 1995 to $655 million in 1999 indicated a "flat" economy with no significant economic growth. In fact, she said, "The private sector actually employs fewer people today than 10 years ago."
From tax increases to tax avoidance
She said tax increases will bring tax avoidance measures, with individuals deferring capital gains and investing in tax-exempt securities or other methods to evade taxes. As a result, she said, taxes "are likely to dwindle."
Bennerson told Mills, "It's clear the administration didn't contact you on the new taxes in the budget." The 2001 budget proposed several tax increases, notably a rise in the gross receipts tax from 4 percent to 5 percent.
Mills also said inability to assess property and collect taxes will erode revenues. She called for an automated system of audit selection and surveillance.
Mills did not refer directly to current problems within the IRB. The Finance Committee is to meet again Aug. 22 in an ongoing effort to investigate the bureau's operations.
Gerard said the IDC will meet in executive session all day Thursday, Aug. 24. After that, she said, results of the preliminary report on Vitelco should be made public. The commission also will hold a hearing Aug. 25 on St. Thomas on six new applications for IDC benefits.

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One administration official was a no-show and another gave much-awaited testimony Wednesday at a Senate Labor and Veterans Affairs Committee meeting called to address employment practices of Industrial Development Commission beneficiaries. And a third brought gloomy news on both employment and taxes.
IDC executive director Frandelle Gerard testified, along with Economic Research Bureau acting director Lauritz Mills. But, for the second time in three days, the absence of Labor Commissioner Sonia Jacobs-Dow impeded the hearing process.
On Monday, Jacobs-Dow failed to appear at a hearing for which she had been asked to testify concerning her department's troubled Workers' Compensation Division. Sen. Roosevelt David, the committee chair, said then that he would subpoena her to appear to answer questions about Workers' Comp.
Clearly frustrated at her absence again Wednesday, David read aloud from a letter he said he had received Wednesday morning from Jacobs-Dow's office. It stated that she had returned from a medical visit to Puerto Rico, and that her doctor had ordered bed rest upon her return. She also said her two assistant commissioners "who would be the appropriate representatives" were off-island. Attempts during the meeting to reach the third assistant commissioner, John Sheen, were unsuccessful.
Sheen was the only Labor official to testify at the Monday committee meeting, but he told the senators he did not have the information requested.
Addressing the ‘hot issue'
Although not a member of David's committee, Sen. Adlah "Foncie" Donastorg was very much in evidence at Wednesday's hearing. For almost a year, Donastorg has been demanding that Gerard provide information on the IDC benefits of the V.I. Telephone Corp. and on its personnel practices which he claims are in violation of IDC regulations. He had threatened to take the IDC and Gerard to court if he didn't receive certain documents by Tuesday.
In her testimony Wednesday, Gerard first provided information requested by David's committee. She said the IDC has heard from 28 applicants over the last two years. New IDC applications, she said, represent more than $1.9 million in new investment capital, more than $26.6 million in payroll outlays, and more than 1,338 new or retained jobs.
Completing her statement to the committee, Gerard then said, "Let's address the hot issue."
She proceeded to read off a chronology of events dating from Donastorg's first assault on Vitelco and the IDC last year.
There ensued much sparring between Donastorg and Gerard about who was in charge of the documents and who could release them. Gerard maintained that the IDC is preparing a report which is in the "preliminary stages," and that it cannot be made public until it is completed. The IDC has requested a full labor-compliance review of Vitelco and has enlisted the assistance of the Labor Department, she said.
She said that IDC compliance officer Margarita Benjamin is preparing the report and that, after commission review, it will become a public document. She reiterated, "The 'working papers' of the staff cannot be released at this time."
Vitelco work force below minimum for last quarter
In a letter sent to Donastorg on Aug. 14, Gerard wrote that Vitelco had not met the IDC requirement of a minimum 421 full-time employees for the last quarter, from March 31 through June 30 of this year. But she said the information needs to be corroborated by the Labor Department and then further reviewed by the IDC.
David said he would call another Labor and Veterans Affairs Committee meeting within 15 days. And he vowed to subpoena Labor officials to testify at that meeting – a vow he repeated throughout Wednesday's meeting, as one issue after another was left unresolved for lack of Labor Department input.
Benjamin was asked to testify on her position as the IDC's acting – and only – enforcement officer.
Asked by Sen. Donald "Ducks" Cole, another non-member of David's committee, who approves the appointment of an IDC enforcement officer, Gerard responded, "That's the million-dollar question."
Who knows where IDC belongs?
It is unclear what government department the IDC falls under, Gerard told the committee. Prior to the creation of the Tourism Department in the last administration, it was within the Economic Development and Agriculture Department, as was Tourism. Now, Gerard said, the Office of Management and Budget and the Departments of Finance and Personnel can't figure out where it belongs. The government section of the local telephone directory places it under the "Government Development Bank."
Benjamin explained after the meeting that the problem lies in identifying where the commission's budget falls. She said the budget fund for the IDC is not attached to any department. The IDC funds are separated from Tourism and from the Government Development Bank, and put into a miscellaneous account. Legislation is pending which would reorganize the IDC.
Cole commented, "It's a system set up to fail."
Committee member Gregory Bennerson listened and looked on in disbelief. "I have one word," he said. "Unbelievable." He added that he was sure Benjamin was getting a "real, and not 'acting,' salary," which Benjamin confirmed.
Under further questioning, Gerard explained that the IDC works with U.S. Customs and the Bureau of Internal Revenue to keep tabs on beneficiaries' activities, "closing the gap" on violators. But she said the commission has no authority to impose penalties on beneficiaries without going through a "lengthy process with hearings."
The Economic Research Bureau's Mills, another "acting" official, supplied some figures on the sagging V.I. economy. She said a rise in private-sector wages from $600 million in 1995 to $655 million in 1999 indicated a "flat" economy with no significant economic growth. In fact, she said, "The private sector actually employs fewer people today than 10 years ago."
From tax increases to tax avoidance
She said tax increases will bring tax avoidance measures, with individuals deferring capital gains and investing in tax-exempt securities or other methods to evade taxes. As a result, she said, taxes "are likely to dwindle."
Bennerson told Mills, "It's clear the administration didn't contact you on the new taxes in the budget." The 2001 budget proposed several tax increases, notably a rise in the gross receipts tax from 4 percent to 5 percent.
Mills also said inability to assess property and collect taxes will erode revenues. She called for an automated system of audit selection and surveillance.
Mills did not refer directly to current problems within the IRB. The Finance Committee is to meet again Aug. 22 in an ongoing effort to investigate the bureau's operations.
Gerard said the IDC will meet in executive session all day Thursday, Aug. 24. After that, she said, results of the preliminary report on Vitelco should be made public. The commission also will hold a hearing Aug. 25 on St. Thomas on six new applications for IDC benefits.