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Lieutenant Governor in Hot Seat Over Airline Contract

Feb. 11, 2005 – On Friday, the second day of a marathon two-day full session of the 26th Legislature, senators voted to subpoena documents from Lt. Gov. Vargrave Richards in reference to the recent contract he signed with American Eagle.
Right before breaking for lunch, Sen. Celestino White motioned for the subpoena of the documents, which was approved by an 8-6 vote along majority-minority lines.
Senate President Lorraine Berry and Sens. White, Liston Davis, Adlah "Foncie" Donastorg, Norman Jn Baptiste, Shawn-Michael Malone, Terrence "Positive" Nelson and Usie Richards voted in favor of the subpoena. Sens. Craig Barshinger, Roosevelt David, Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Neville James and Ronald Russell voted against. Sen. Louis Hill was excused.
The subpoena orders the lieutenant governor to deliver a clear copy – "without redactions" – of the agreement between his office and American Eagle by Feb. 18. He was also asked to submit an explanation – including documentation – of the funding source of the contract agreement along with an itemization of the expenditures of the St. Croix Economic Development Fund from the date of the fund's inception to the date of the subpoena.
At a press conference in December, Richards along with American Eagle executives had announced the resumption of flights between St. Thomas and St. Croix. (See "Eagle Resumes Flights Between St. Croix, St. Thomas").
However, Richard did not make it public that the government had a contractual agreement to pick up the tab if American Eagle failed to make the "minimum revenue requirement."
According to the contract, American Eagle will provide three daily flights between the islands from Jan.1 to May 1, the expiration date of the contract. The flights operate seven days a week leaving St. Thomas for St. Croix at 7:50 a.m., 1:40 p.m. and 6:30 p.m. The flights depart St. Croix for St. Thomas at 7:30 a.m., noon and 6:51 p.m.
American Eagle is supposed to raise a required minimum revenue each month from the flights. If American Eagle's revenue for the particular month falls below the required agreed-upon amount, the government will have to pay the difference, according to the contract.
Upon hearing of the contract, many senators were upset that Richards did not come to the Legislature with this proposal before signing it.
On Thursday, Richards hand-delivered a letter and a copy of the contract to Berry. In the letter, Richards told Berry that the "trade secrets" of the contract had been redacted. He also provided in the package a letter from American Eagle explaining the reason for their redaction.
"Having served with you in the Senate, I am aware of the need for the Senate to be aware of contracts, which may require an appropriation," Richards wrote. "As you know, a funding source for this agreement, should it become necessary, was previously identified, and no legislative action is required at this time."
Richards urged Berry not to subpoena the trade secret portion of the document, telling her that he and American Eagle Representatives could meet with the Legislature privately.
"Companies doing business require such protection for competitive reasons," Richards wrote. "And our goal should be to attract and not discourage business."
Richards' pleas fell on deaf ears, however.
"We have been requesting this information, and it has not been provided to us," White said Friday as his reason for moving the motion. He added the Senate was unsatisfied with what was provided to them by Richards.
White told the Source Thursday that he had no knowledge of Richards' letter to Berry on Thursday, but he could still meet with the senators if he wished. White said he believes the government should not operate under "a cloud of secrecy" in acquiring government contracts.
"We're not going to divulge trade secrets," White said. "Our purpose is to find out the total cost to the government and where the money is coming from."
Berry said she had received Richard's letter Thursday evening but won't have time to respond to it until Thursday because of the full week of Senate sessions.
"I voted against the motion because I don't think it's necessary," David, Senate minority leader said. "They already have the contract, so what is it they're looking for?"
David said Richards had already provided Berry with the information and Sen. Usie Richards had even read the figures aloud – $3,140 per round trip – on the Senate floor Wednesday, so everyone knows what is going on.
David added that the majority's actions were "just a political plot" against the lieutenant governor, whom they believe is running for governor in 2006. He added that three members of the Senate majority had expressed plans to run for governor and this was an effort to "derail" Richards.

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