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Tuesday, October 4, 2022
HomeNewsArchivesIG: V.I. COULD BE THE BIG LOSER IN PROSSER DEAL

IG: V.I. COULD BE THE BIG LOSER IN PROSSER DEAL

In a letter to Sen. George E. Goodwin, V.I. Inspector General Steven van Beverhoudt said the benefits to businessman Jeffrey Prosser's Innovation Communications Corp. are "endless" under the so-called "Prosser bill."
He recommended that the bill not be approved.
"There is no limit to the tax exemptions possible. Figures have ranged from $180 million to $4.5 billion over the 30 years of exemptions," van Beverhoudt said.
Van Beverhoudt said though he did not have the staff or the expertise to do the cost-benefit analysis requested by Goodwin, his preliminary review of the bill led him to conclude that the "‘deal' is not in the best interest of the Virgin Islands, and the Virgin Islands can potentially be the big loser."
The letter was written in response to Goodwin's request last week that the inspector general "immediately review Bill no. 23-0060 and audit this deal to determine whether or not we the people and the government of the Virgin Islands have been taken for a ride or do we stand to benefit from this deal."
In the six-page letter to Goodwin, van Beverhoudt went through the bill section by section, pointing out major concerns ranging from the actual value of the 1,000 acres Prosser would convey to the V.I. government to who would make up any shortfalls in the monies allotted for public projects that are to be built under the bill to the total lack of control over the money by the Public Finance Authority, to the number and types of businesses that could become tax-exempt under the ICC umbrella.
"The entities can do just about anything from communications, to retail sales, to construction, to manufacturing, to whatever . . . all tax free," van Beverhoudt said. "For example, one of the entities can acquire a construction business to build the projects required by this agreement, and pay no taxes. In addition, materials and supplies for the projects can also be imported, tax and custom duty free. This example results in Innovative paying itself to construct the various projects."
He also pointed out that if the 300-room hotel that is part of the package gets built, it will likely include a casino. Under the terms of the "Prosser bill," not only would the hotel and casino receive full tax benefits, but the various fees required by the Casino Control Commission would be uncollectible.
He also said the bill creates an unfair advantage over other companies and added, "With Mr. Prosser's recent acquisitions and expansion, it is safe to assume that he will continue to expand his empire."
Van Beverhoudt questioned another provision of the bill that "'prohibits anyone from reviewing, questioning or issuing opinions that may in any way affect the agreement.' It also requires the government to correct any challenges that may arise from the federal government or the Territorial and District Courts. How can the Virgin Islands government pass a law to overrule a federal law or a court decision?"
Van Beverhoudt recommended that the agreement not be approved, suggesting that a thorough cost-benefit analysis and legal review be done.
He said he believed an analysis would "show that the Virgin Islands would not be getting an equitable share of benefits."

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