Innovative Communication Corp. on Monday praised Gov. Charles Turnbull’s line-item veto of a measure that would have allowed the Legislature to investigate the territory’s utility rates.
The legislation, which was an amendment to a wider transportation bill, was introduced by Sen. Adlah "Foncie" Donastorg. Donastorg has long criticized the way ICC manages the Virgin Islands Telephone Corp., the territory’s sole telephone company.
In his veto message last weekend, Turnbull said Donastorg’s amendment was "a blatant and intolerable violation" of the Constitution.
Holland Redfield, ICC’s vice president of corporate affairs, agreed. In an interview on WSTX radio on Monday, he said Donastorg’s effort was an "intrusion" on the executive branch by another branch of government.
"It not only applies to us but also WAPA," Redfield said. "This is bigger than Vitelco, bigger than Sen. Donastorg."
Donastorg has attacked Vitelco and ICC’s business practices for years. He has repeatedly called for an investigation of the phone company's rates. For almost two years, he has argued that the company is earning more than its guaranteed rate of return, ever snce Vitelco was granted close to 100 percent tax breaks under the Industrial Development Commission by former Gov. Roy Schneider.
Donastorg asserts that by placing employees from ICC’s other subsidiaries on Vitelco’s payroll, ICC is forcing telephone customers to subsidize its other enterprises.
Both ICC and IDC officials say the transfer of employees is legal and part of a consolidation process. Donastorg, however, has filed a complaint with the Public Services Commission and the IDC to look into the matter.
A preliminary IDC report on the senator’s allegations showed that for the four quarters prior to March 31, Vitelco had more than the 421 full-time employees required in its IDC contract. However, between March 31 and June 30, 2000, of the 452 employees in the company, 52 were found to be ineligible.
"By adding additional employees of other ICC subsidiaries to the Vitelco payroll, the employee deductions increase, causing an effect in Vitelco’s profit," the preliminary report says. "The significance of this effect will reflect on the income tax deductions and possibly on (the Public Services Commission's) assessment for rate increases."
Redfield, however, said the ICC and Vitelco have been submitting reports to the IDC concerning the consolidation process on 90-day, and some 30-day, intervals. He called Donastorg’s efforts to attack ICC and its owner, St. Croix businessman Jeffrey Prosser, a political "red herring."
"There just isn’t any subterfuge being created by the utility," he said. "The number of employees, hours; all of these requirements are being met."
Donastorg, meanwhile, has vowed to gather enough votes in the Senate to override Turnbull’s veto.
