Aug. 11, 2004 – The Grand Beach Palace Resort's top official failed to appear on Wednesday before the Senate Labor and Veterans Affairs Committee despite having been subpoenaed to testify.
In a letter to the committee, Luis Entrala Fabregas, resort general manager, said he would not appear because the subpoena issued to him was "insufficient and unenforceable."
The committee had invited the general manager and hotel attorney Derek Hodge to testify at an Aug. 3 hearing on the impending closing of the resort on Aug. 28 and its plans for its employees, who will be out of work. Neither appeared; Hodge wrote saying he had a prior commitment and Entrala wrote saying he could not appear without legal counsel. The committee then voted to subpoena them for Wednesday's meeting.
According to Entrala, he received the subpoena at 3 p.m. Monday informing him that he needed to appear before the committee on Wednesday. He said the V.I. Code states that a legislative subpoena "shall be sufficient if it furnishes the witness at least 72 hours notice."
Entrala also said in his letter that although the subpoena stated that the committee had unanimously approved it, it did not clearly indicate that a quorum was present. The V.I. Code also stipulates that the document must indicate that it was approved by a quorum.
According to the Source account of that hearing, all five committee members were present for the unanimous vote. (See "Resort Management Skips Meeting, Faces Subpoenas".)
Entrala further quoted another section of the V.I. Code, stating that "there shall be paid to the witness as fees and for traveling expenses, the same amount that would be paid according to law to a witness under similar circumstances if summoned to attend a session of the District Court of the Virgin Islands." No fee accompanied the subpoena, Entrala said.
Sen. Norman Jn Baptiste, the committee chair, said the idea of payments for witnesses who testify was news to him. "No one has ever made such an implication before," he said.
Entrala also stated that he had watched some of the Aug. 3 hearing on television and had heard several senators making what he termed derogatory references to Mexicans and defamatory allegations concerning the resort and its management team. Senators also spoke about instituting litigation against the hotel, he said.
"As a result, Palace does not intend to have me voluntarily appear before your committee or appear pursuant to a subpoena issued in violation of the very laws and rules cited in the subpoena," Entrala said. "We sincerely regret that, rather than working in a non-adversarial effort to allow for the reopening of the hotel at the earliest possible date, the Legislature and the government [have] taken such an anti-business and attacking posture on what is indisputably an unfortunate situation for all concerned."
Jn Baptiste asknowledged the subpoena was issued late but said that a quorum did indeed issue it.
Hodge also failed to appear again on Wednesday, this time sending word in a letter that he was in the midst of a week of depositions in St. Croix and saying that he had not received a subpoena.
"What these people are saying is 'We won't come unless you tie our hands,'" Sen. Celestino A. White Sr. said. He also said the committee needs to know that the workers will be taken care of when the resort closes on Aug. 28 for an indeterminate time for renovations.
Nearly 300 employees are to be let go, and the resort has announced that it will give them all one week's severance pay, regardless of how many years they have worked at the property under various owners and managements over the last 20 years. The Palace Resorts chain, based in Mexico, acquired the resort less than a year ago and thus is exempt from the territory's plant-closing act.
"Frustration leads to aggression," White remarked.
Sen. Adlah "Foncie" Donastorg accused the Grand Beach management of having demonstrated "another level of disrespect."
"Subpoenas are issued and no one seems to want to respond," he said, referring as well to the V.I. Carnival Committee, which failed to appear before the Senate Finance Committee, which he chairs, and to provide subpoenaed financial documents.
Labor Department Official Cites Other Subpoenas
John Sheen, acting Labor commissioner, told the committee that the Labor Department is continuing its efforts to obtain information from Palace Resorts and the most recent previous owners of the property, when it was known as the Renaissance Grand Beach Resort. Subpoenas were issued to attorneys for both companies on Monday ordering them to produce requested documents by 5 p.m. Wednesday, he said.
If the documents were not produced, the Attorney General's Office was to move to enforce the subpoenas, Sheen said.
White said that since the Attorney General's Office had pledged to move forward, he saw no need for the Legislature to issue any more subpoenas.
Numerous resort employees filled the legislative chambers, as they had at the Aug. 3 hearing. One said in testifying that he had something to tell Entrala, whom he claimed was watching the proceedings on television. "You can run but you can't hide," John Edwards, a Grand Beach waiter, said.
White warned the employees that the Legislature would not be able to give them back their jobs. "The best representation for the working man and woman are the unions, not the elected officials," he said.
United Steel Workers of America officials have accused the Palace Hotels management of bias against the Grand Beach employees because of a move earlier this year to unionize the workers. Two weeks ago the National Labor Relations Board ruled that the employees can proceed to vote on whether they want to be represented by the union despite the impending closing.
Jn Baptiste encouraged the workers to "keep faith" and said the senators would do all they could from their end.
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