76 F
Cruz Bay
Thursday, September 29, 2022
HomeNewsArchivesSenator Goes After Cooperative Going After Innovative

Senator Goes After Cooperative Going After Innovative

Sept. 22, 2004 – Sen. Luther Renee issued a statement over the weekend questioning whether an off-island lender has paid its taxes and licensing fees in the Virgin Islands.
Renee requested Louis Willis, Bureau of Internal Revenue director, to investigate whether the Rural Telephone Finance Cooperative should be a V.I. corporation, and whether, as such, it should pay taxes to the V.I. government. Renee claimed RTFC could owe the government "in excess of $300 million."
The cooperative, based in Virginia, has loaned several million dollars to Innovative Telephone Co. over a period of years. It filed a lawsuit in June claiming the phone company owes it $600 million. In a Sept. 10 meeting before the Public Services Commission, RTFC lawyers told the commission it owns enough stock to take over the company. As part of the loan agreement RTFC holds 100 percent of the common voting stock of Innovative. See (See "Phone Company Could Have New Owner in January").
Talk of a takeover is what put a burr under Renee's saddle. He said in his statement his only interest is in protecting the Virgin Islands and he has no interest in the allegations contained in the lawsuit.
The questions Renee wants Willis to answer are:
– Was the RTFC required to pay taxes to the V.I. government for interest earned on loans to Innovative?
– Is the RTFC required to be a bona fide V.I. corporation? If so, has it paid the annual $150,000 license fee annually collected from local and foreign banks?
– Is the RFTC required to get a business license in the territory?
– Is the RFTC required to obtain a banking license from the V.I. government?
Willis is off-island and not available for comment
Jonathan Siegfried, RFTC legal counsel, said from his New York office Wednesday, "RTFC believes we are in compliance with V.I. laws. Because we are good corporate citizens, we have reviewed these issues before. The RFTC has asked its tax counsel to confirm its original position."
Though local businessmen and attorneys contacted by the Source didn't want to discuss Renee's proposal on the record, two government officials commented.
Andrew Rutnik, Licensing and Consumer Affairs commissioner, received a copy of the statement. He said, "I didn't quite understand it. If you have a presence in the territory, you have to have a business license to do business. There is nothing in writing for a license for RTFC, so at this point, we have no input."
Renee sent copies of his statement to the Division of Banking and Insurance in the lieutenant governor's office and to the office of Licensing and Consumer Affairs. Yolander Samuel-Deterville, head of that division, did not return calls Wednesday. Lt. Gov. Vargrave Richards is off-island and could not be reached.
Banking and tax attorney Tom Bolt said, "RFTC is not a bank, not a depository institution, so they would not need to pay $150,000. Many lending institutions loan Virgin Islanders money. Just because they loan money, unless they are doing business in the Virgin Islands, they wouldn't fall under the V.I.'s jurisdiction."
"Whether they should pay taxes on interest earned, would be a question for Willis," Bolt said. "It may not be the best use of our resources to go after them, particularly if we do not have any jurisdiction over them."
Renee also said in his release that he understood from a Sept. 10 PSC meeting, that RFTC is a "for profit corporative." That claim was challenged by Siegfried and by Valencio Jackson, PSC chairman.
Siegfried said, "To the extent that he believes we are a for-profit corporation, he is incorrect. He must have misunderstood what he heard at the hearing."
Jackson said he couldn't comment on Renee's statement since Renee is a board member. However, he said he couldn't understand where Renee got the impression that RFTC was a for-profit corporation.
The RFTC Web site lists it as a "member-owned, not-for-profit lending cooperative created in 1987 to serve the financial needs of the rural telecommunications industry."
Renee was in a Senate Finance Committee meeting Wednesday, and unavailable for comment.
Back Talk

Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.

Publisher's note: Like the St. Thomas Source now? Find out how you can love us twice as much–and show your support for the islands' free and independent news voice… click here.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.




Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.