There is something very strange going on in the business community when a Chamber of Commerce president defends a local monopoly and criticizes an independent agency for trying to level the playing field.
But that's what both St. Thomas-St. John Chamber of Commerce President John deJongh and VI Senator Anne Golden did when they criticized the VI Banking Board's decision to attach restrictions on its approval of VI Community Bank's purchase of Chase Manhattan Bank's local assets.
DeJongh was quoted as saying the Banking Board and other "government" agencies "must not continue to stifle private sector expansion and investment in our weak economy." Both deJongh and Golden cited the decline in the financial sector as reasons to oppose the Banking Board decision.
First of all, the Virgin Islands Banking Board is one of the most independent agencies there is, with four of its six members employed by the private sector. For nearly 10 months, the Board met regularly and rigorously studied the proposed sale of Chase Manhattan Bank, talking to bankers, regulators and financial experts about the proposed acquisition and its effect on the territory.
Secondly, there is ample evidence and information to show that Jeffrey Prosser's purchase of Chase would do more to HARM the current financial sector than to improve it. With VI Community Bank's already unfair tax benefits automatically applying to such a large entity as Chase, other banks might be compelled to pull out of the territory. Removing Chase from the tax rolls would also hurt the economy, something the senators who criticized the Board's decision don't seem to be concerned about.
Then there is the question of government deposits currently made to Chase. If Prosser purchased the bank, would he use these government deposits to fund his private ventures? And would he honor payroll checks even if there were insufficient funds in the government accounts? The implications for such a monopolistic communications firm such as Prosser's ICC controlling the purse strings for an entire island, is, to say the least, troubling.
Sen. Golden applauded the VI Community Bank for its "investment in the community under the Community Reinvestment Act," but she failed to mention that almost every other territorial bank has also complied with this Act by reinvesting in the community. The real question to ask is why VICB got gigantic tax breaks other banks did not, and if the VICB was in full compliance of its agreement with the Industrial Development Commission.
I can't speak for the Banking Board, but their condition on restricting a portion of the VI Community Bank's Board of Directors seems reasonable, when one considers the interlacing relationships that Prosser's companies have controlled in and out of government. Consider the fact that Prosser's wife sits on the VICB Board, along with Daily News CEO J'Ada Finch Sheen, and of course, convicted felon Ann Abramson. With the help of his buddy Roy Schneider, Prosser was able to stack both the Industrial Development Commission and the Public Utility Commission with his cronies, and defer taxes for his companies, effectively shutting out other telecommunications companies from doing business here.
If our Chamber president was really serious about bringing new business here, he should start by talking about reforming our unfair tax system that grants some companies unfair benefits over others. VICB's acquisition of Chase would, by undercutting the competition, create a very noncompetitive environment for business in the U.S. Virgin Islands.
Editor's note: Michael Burton is the former Public Relations officers for the Lieutenant Governor's Office, which has oversight on banking issues for the territory. He was also a reporter for the V.I. Independent.
