The V.I. Public Services Commission will address Thursday a motion from bankrupt former Vitelco owner Jeffrey Prosser asking the PSC to reconsider its recent approval of transfer of control over Vitelco and the Innovative cable TV companies. The motion is signed by Prosser, his wife Dawn, and Jeffrey Moorhead, a former PSC hearing examiner overseeing Vitelco, who is now working for Prosser as an attorney.
On May 5, the PSC voted to let National Rural Utilities Cooperative Finance Corporation (CFC) take ownership of Vitelco and Innovative. CFC is the financial arm of the Rural Telephone Finance Cooperative (RTFC), which is the largest single lender to Innovative’s parent company, ICC, and holds a $525 million judgment against it. In January 2009, CFC announced it would make a credit bid—a bid financed by what Vitelco owes it—to acquire Vitelco, local cable companies and the other ICC-owned companies.
Last year, the PSC appointed attorney Ronald Belfon as hearing examiner and in early November, Belfon held public hearings throughout the territory on the question of the proposed transfer. The deadline for written testimony was prior to the hearings. However, the former owner of Vitelco filed nothing with the PSC about the transfer of Vitelco until sending a letter dated Nov. 5—after the Nov. 2 deadline for written comments and after the hearings were over.
Prosser’s latest motion appears aimed at delay. By law, interested parties have 30 days to formally contest a decision of the PSC. Prosser’s motion for reconsideration of the May 5 ruling was filed June 4: the 30th day.
Prosser makes a wide range of accusations in his filing. Many appear to be contradicted by the court record. In the motion, he refers to a "witness bribery scheme" involving his former butler Arthur Stelzer and says the bankruptcy judge referred Prosser’s motion for an investigation to the U.S. Attorney’s office.
In reality, U.S. bankruptcy Judge Judith Fitzgerald denied Prosser’s motion to refer Stelzer to the U.S. Attorney’s Office, ordering that the motion for referral be denied “with prejudice” because “ … the allegations in the motion … have not been substantiated and have been proven to be baseless and without merit regarding Arthur Stelzer.” She expanded on her objections to the motion at some length in the order.
Prosser and Moorhead also say Stelzer’s testimony in January revealed "a quid pro quo arrangement existed to wit: in return for the payment of Stelzer’s legal fees being paid by either ICC or Vinson and Elkins … Stelzer was to appear and truthfully testify at the Prosser bankruptcy proceedings."
In reality, Stelzer said over and over again there was no quid pro quo at all while Prosser attorney Norman Abood repeatedly tried to add words to Stelzer’s testimony. The closest Abood came to success was the following exchange:
Abood: "What is your understanding of what you’re to do in exchange for them paying your fees?
Stelzer: "Just – "
Abood: "Provide testimony?"
Stelzer: "Well, if I’m called for whatever, just to come tell the truth."
Abood: "And provide testimony?"
At this point, Fitzgerald stopped Abood.
"The witness’s answer is that if he’s called, he’s to come and testify and tell the truth. That’s the answer to the question. Is there a new question?" Fitzgerald said.
Prosser’s claim that Stelzer gave testimony in exchange for the payment of his legal fees is also self-refuting because Stelzer’s legal fees came after and as a result of his testimony, so had he chosen not to testify, he would have had no legal fees to pay.
Making false statements about Stelzer in official documents is nothing new to Prosser. When denying Prosser’s motion to refer Stelzer to the U.S. Attorney’s Office, Fitzgerald chastised Prosser and his attorneys for falsely accusing Stelzer of committing perjury. Fitzgerald previously ordered Prosser’s attorneys to cite the alleged false testimony but to no avail.
"The failure to cite the record thereby demonstrates that despite counsel for Mr. Prosser’s assertions that such testimony exists, in fact, it does not," Fitzgerald wrote.
Prosser also claims to the PSC that RTFC "fraudulently changed and altered a loan document between ICC and RTFC." Prosser first made this claim in a motion to the U.S. Bankruptcy Court in 2006. But he withdrew the motion "with prejudice," a few months later, before providing any witnesses or evidence. Because it was withdrawn "with prejudice," he is not allowed to repeat the same claim to the court.
In 2008, he made the same claim again, prompting opposing attorneys to ask the court to strike the document, the court record, and to sanction Prosser’s attorney’s for ethical misconduct and "outrageous falsehoods." In August 2008, Fitzgerald ordered Prosser’s allegation stricken from the court record. In May of this year, Fitzgerald issued an "Order on Correcting False Statements" requiring Prosser’s attorneys go back and correct a series of false statements they made about Stelzer in an array of court filings.
Prosser’s motion for reconsideration will be heard at the PSC’s regular meeting this Thursday in the Port Authority Conference Room of the Henry E. Rohlsen Airport on St. Croix. The meeting begins at 10 a.m. but the commission expects to be in executive session for the first hour or so.
It will be a busy day at the PSC. On the table will be a petition for an increase in the V.I. Water and Power Authority’s LEAC (Levelized Energy Adjustment Clause) for July 1 through Sept. 30. Electricity and water shortages and the potential for water rationing will also be discussed.
There is a Power Point Presentation with information on the LEAC on the new PSC Website: http://www.psc.gov.vi/
V.I. Waste Management Authority wastewater fees, regulatory responses to FCC Broadband, Universal Service Fund Initiatives and Choice Communication’s application for Eligible Telecommunications Carrier are also on the agenda.
Editor’s note: The U.S. Bankruptcy Court denied a motion from Prosser to refer charges to the U.S. Attorney’s Office, not, as an earlier version of this story said, to the U.S. Attorney General. This story has now been corrected.
