Sept. 13, 2002 – The Public Services Commission voted on Thursday to suspend its investigation of Innovative Telephone's handling of the $1 surcharge the company collects on behalf of the government for 911 emergency services. Its reason was that a federal agency is about to do the same thing.
It also voted not to make the telephone company's financial records available for public scrutiny, rejecting the arguments of the hearing examiner for its Innovative rate investigation that the documents are public record under territorial and federal law.
Desmond Maynard, PSC chair, said the U.S. Inspector General's Office is initiating a federal audit of the surcharge funds. He suggested the PSC "might benefit" from the federal investigation and said he saw no reason to subject Innovative to two investigations. "If time is not a problem, why not wait?" Maynard said.
Sen. Emmett Hansen II, a non-voting commission member, objected to Maynard's suggestion. "I think it is ridiculous that the PSC would abdicate their statutory responsibility and oversight just because they heard that another entity is conducting a similar investigation," Hansen said. "The PSC needs to perform its function and conduct their own investigation."
Nonetheless, the commission voted unanimously to suspend its investigation.
Arnold Van Beverhoudt, Caribbean region audit manager for the U.S. Inspector General's Office, confirmed Friday that the office will initiate an audit the week of Oct. 7.
Frederick Watts, PSC hearing examiner, said he has paper "a foot tall" already assembled in his investigation, comparing phone company bills sent out with the records of payments to the Finance Department. However, Watts said, "If you want to suspend the investigation, so be it."
Sen. Adlah "Foncie" Donastorg, long a critic of the telephone company's financial operations, has accused Innovative of wrongful collection practices and has sued the company on behalf of the people of the territory in District Court. Additionally, on May 1, he announced that he had requested a federal audit of the emergency services surcharge operations and had filed a new complaint with the Public Services Commission, which regulates the phone company.
Donastorg contends that the approximately $60,000 a month Innovative has been turning over to the government does not represent anywhere near the total amount it has collected each month. The amount corresponds roughly to the number of customers, he said, and not "the actual number of telephone lines, which is, by informed estimates, well over 90,000."
At the same time, Donastorg says the intent of the law making Innovative the collector of the surcharge was to impose a fee of $1 per telephone subscriber, regardless of the number of lines that a customer may have. Innovative has in most cases been billing customers $1 per phone line. Donastorg says many customers have multiple lines — he, himself, having five, and thus having gotten five bills with five surcharges..
In May, Innovative Vice President Holland Redfield wrote to Gov. Charles W. Turnbull asking that the company be relieved of responsibility for collecting the tax. (See "Innovative wants to stop billing for 911 tax".) Turnbull subsequently turned over collection of the surcharge to the Water and Power Authority.
In another Innovative matter, the PSC elected to recognize a highly debated "letter of confidentiality" over the V.I. Sunshine Act.
The V.I. Source newspapers had requested copies of Innovative Telephone's annual financial reports which the company is required to file with the PSC. The Source wrote to Maynard in May requesting the documents, which the newspaper believes are public record under the V.I. Sunshine Act and/or the federal Freedom of Information Act.
In May, Kevin Rames, attorney for Innovative Communication Corp., the parent company of Innovative Telephone, filed a complaint with the PSC opposing the release of the records. Rames also contended that the PSC had not notified him and that the agenda was not circulated in a timely manner. PSC hearing examiner Fred Watts called Rames's arguments "ridiculous," saying he had corresponded "four or five" times about the matter with ICC attorney J'Ada Finch-Sheen.
Rames argued that the Sunshine and FOI Acts are not applicable in the case. He said in his complaint that the FOI does not apply to "states, local governments, the courts, Congress or private persons, and is not applicable to the PSC." Nor does the Sunshine act allow the Source access to sensitive financial information, the complaint said.
Rames cited a 1989 settlement agreement between Vitelco and several other entities including the Rural Telephone Finance Cooperative and the PSC which protects certain information. Watts said the agreement doesn't apply in the case.
At a PSC meeting on St. Croix in July, the matter was supposed to be heard. The Source was represented, but Rames didn't appear. On Thursday, Rames again was not present, but attorney Julio Brady was there to represent ICC. Brady made many of the same arguments that Rames had previously made and also said releasing the financial documents would give competitors an "unfair advantage."
Watts again argued that the documents should be released under the Sunshine Act. He also reminded Innovative that it had three months in which to submit an affidavit citing any complaints.
Brady said the material in the financial records is confidential, citing a letter Innovative had written to Claudius F. Moore, PSC accounts maintenance officer, requesting confidentiality for Innovative's records.
Moore said the PSC never agreed to that request and said that it was not incumbent on the commission to do so. "There was no written response," he said. "The PSC did not accede [to that request]. It is the PSC's position that such documents are not confidential." Watts added, "There is not one document saying we agree to that letter of confidentiality."
On a 4-3 vote, the commission defeated a motion to order Innovative to make the financial records public. Watts said it was the first such case the PSC has experienced, adding, "It's a poor way to make public policy."
Voting against making the documents public were Valencio Jackson, Luther Renee, Alric Simmonds and Alecia Wells. Voting to make them available were Jerris Brown, Vernon David and Maynard.
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