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Prosser Tells Court Legislature Would Consider a Bill to Purchase Vitelco; It Didn't

Nov. 29, 2006 — In documents filed in District Court on Nov. 22, Innovative Communication Corp. owner Jeffrey Prosser states that senators were scheduled to consider a bill on Tuesday authorizing the purchase of the V.I. Telephone Co. and other ICC companies by the local government. That is not what happened, however.
The bill considered during Tuesday's full Senate session would appropriate $300,000 from the General Fund to the Office of Management and Budget to pay for a feasibility study to determine whether the purchase would be in the "best interest of the territory."
In a letter sent Friday to Senate President Lorraine L. Berry, Gov. Charles W. Turnbull wrote that the bill allows the government to do its "due diligence" and "investigate" the merits of the acquisition.
Turnbull submitted the bill after holding two closed-door meetings to discuss the matter with his financial advisors and members of the government's financial team. The meetings were held in the Public Finance Authority building on St. Thomas
During Tuesday's meeting, however, senators loudly opposed the bill, and voted to hold it in the Committee of the Whole "until further notice." Taking their cue from comments made by Sen. Usie R. Richards, senators agreed that the study, as proposed, should be funded by the PFA.
"The whole reason that this bill was sent to us is because the governor is trying to find a way to start the discussion in the Legislature and have us sanction the bill so that it looks like we're supporting the study," Richards said after the meeting. "That's not going to happen."
During the meeting, PFA Director Kent Bernier Sr., after extensive questioning from Richards, admitted that the authority did have enough money in its operating account to cover the $300,000 appropriation.
While senators seemed amused by the back-and-forth between Richards and Bernier, they were taken aback when Sen. Louis P. Hill read the District Court documents on the floor.
"Jeffrey Prosserhereby declares under penalty of perjurythat it is my understating that a special session of the U.S. Virgin Islands Legislature is being called for Nov. 27, 2006," Hill read. "At the special legislative session, the legislature is expected to consider legislation: 1) authorizing the governor to conduct due diligence and investigate whether the acquisition is in the best interest of the Virgin Islands; 2) approving the acquisition; and 3) conferring upon Gov. Turnbull the requisite authority to execute on behalf of the government definitive documentation to effect the acquisition."
The documents go on to state that ICC has terminated one of its investors "which would have precludedICC from entering into negotiations with the government" or any other potential investor. Additionally, Prosser asks the court for more time to finalize negotiations with the government and "complete the acquisition."
Senators were silent after Hill went through the documents and asked Nathan Simmonds, head of the government's financial team, "whether Tuesday's session was called for this purpose."
Simmonds said the bill, as written, does not ask for senators to approve the purchase. "That's clearly not why we're here," he said. "This bill is simply appropriating the $300,000 to do a due diligence study."
In a presentation made before the Senate early Tuesday morning, Simmonds explained that the government began to consider the deal after "receiving an offer from ICC" to sell certain companies — including Vitelco, St. Thomas-St. John and St. Croix Cable TV, and V.I. Powernet, among others.
"The government clearly has a vital interest in ensuring the integrity of the telecommunications system in the V.I.," Simmonds said.
He added that the study could take several months, given the "complexity of the proposed acquisition."
Taking Simmonds' statements into consideration, some senators said they would wait until the "deJongh-Francis administration" takes office before the bill is brought back to the floor.
One of the few remaining government-owned phone companies was sold by Guam last year to a private investor. The company, which is comparable in lines and subscribers to Vitelco was sold for between $130 and $150 million. Guam also took the step of opening up the industry to competition.
With a population of about 57,000, American Samoa may be the only government under the U.S. flag to still retain ownership of its phone company. The phone lines are a fraction of those in Guam and the territory, as the average income is substantially lower.
All senators were present during Tuesday's session.

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