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Cruz Bay
Monday, July 22, 2024


The League of Women Voters has concerns about the proposed sale of Chase Manhattan Bank to the local Virgin Islands Community Bank owned by businessman Jeffrey Prosser.
The league expressed those concerns July 22 in writing to Lt. Gov. Gerard Luz James II, commissioner of banking and insurance, posing several questions. But only after a second letter was sent, on Aug. 23, was a reply received.
The league wanted to know:
— Will the IDC benefits currently extended to VICB accrue to the new acquisition?
— Will a new entity cover overdrafts for the government, as Chase has been known to do?
— How will the territory be affected by losing an international bank? And how will other banks we affected?
— Will VICB be required or able to maintain Chase's status as a member of the Federal Deposit Insurance Corp.?
And finally, the league asked:
— "What are the ramifications for a community of our size of having a major bank and major communications utilities (the telephone company, a cellular phone service, two cable T.V. companies, a provider of Internet service and the only daily newspaper printed on St. Thomas) being under the same ownership?"
League President Erva Denham concluded her July 22 letter by saying, "We must be diligent in examining this transaction before the deal is concluded. Only if there is a full and complete review will this community be assured that this transaction is in its best interest, and not just in the interest of a few."
In his one-page reply James said the Virgin Islands Banking Board was addressing the league's concerns.
The lieutenant governor's letter, dated Sept. 1, said application for the proposed sale was only recently made to the FCIC — but did not give the exact date of the application.
James said the board has asked the IDC for information regarding the criteria used to grant VICB's existing tax benefits and whether these benefits would extend to the additional branches if the sale were approved.
A reliable source who was in government at the time the IDC benefits were granted to VICB told St. Thomas Source that the basis for the benefits was the potential loss of jobs when, at the time Banco Popular bought the CoreStates Bank branches in the Virgin Islands, it was barred from acquiring the branch on St. Croix.
The league's letter was written before John Tutein, vice president of Innovative Communications Corp., was indicted on five counts of bribery. Those charges allege that Tutein attempted to coerce at least one senator into supporting the so-called "Prosser bill" that would have exchanged 1,000 acres of land in St. Croix and $10 million in capital projects for 30 years of full tax breaks for 10 companies under ICC's umbrella — a deal that could have netted Prosser as much as $3 billion in tax breaks, by some estimates.
There has been speculation in some legal and banking circles in the community that resolution of the Chase deal may be delayed until after Tutein's trial, which is slated to begin Oct 4.
Asked if the league was satisfied with the lieutenant governor's reply, Denham said, "It's only preliminary. All he did was echo what our questions were. For one thing, we want to know what date that application was filed."
In his reply. James said the Banking Board is carefully scrutinizing the proposed transaction and is conducting a complete review of the proposal.
Denham said the league wants to see a written copy of the review and also wants to see the written recommendations when they are made to the FDIC.

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