West Indian Company chair and Mapp Chief of Staff Randy Knight told senators he asked WICO to pay the governor’s rent after the Department of Property and Procurement rejected the proposed lease as too extravagant, during a Committee of the Whole hearing Thursday.
The hearing was a continuation of a July 9 hearing (See Related Links below) at which WICO refused to turn over transcripts of the April meeting at which Knight proposed the idea. On Wednesday, WICO officials again refused to turn over transcripts, despite having lost the court case they cited as their reason.
At question is whether WICO’s actions were proper and whether the Legislature and the public have a right to see records of WICO board member’s discussions before deciding to rent a $12,500 per month, seven-bath, nine-bedroom villa for Gov. Kenneth Mapp, who is single and lives alone.
V.I. law requires the governor to live at Government House on St. Thomas, but the last four governors, including Mapp, have not lived there and Gov. Roy Schneider converted the residence to offices.
On April 14, WICO’s governing board approved a resolution, which Knight signed a month later, agreeing to pay Mapp’s rent at Villa Fratelli Cresta, indefinitely, starting at $12,000 per month, then increasing to $14,500 per month. WICO is wholly owned by the V.I. Government.
The villa is brand new and was completed in December 2014 and listed for rent Jan. 2, owner Jimez Ashby told the Senate. Ashby also owns A-9 Trucking, the principal trucking contractor for the Waste Management Authority.
Knight testified Wednesday that he brought the lease to WICO for payment only after the Department of Property and Procurement had rejected it, in part over its calling for a $50,000 security deposit.
Knight said his subordinate, Deputy Chief of Staff Rochelle Corneiro, brought the lease to Property and Procurement on Mapp’s behalf, then he, Knight, brought it to WICO, and also signed the board resolution approving the agreement he brought to WICO. The resolution, approved in mid-May, agreed to pay Mapp’s rent retroactively from January, 2015, onward. [Mapp WICO Lease Resolution] It also called for WICO to deduct the cost of the rent from WICO’s annual $700,000 payment in lieu of taxes to the government.
A lease was negotiated and drafted, but never signed. Knight provided a copy of the unsigned lease with his written testimony. It calls for $12,000 rent for January and February; $14,500 for March, April, May and June, plus additional charges each month for utilities and services, as well as a security and damage deposit of $50,000. It gives a total rent due of $226,000 through April of 2016 and allows for a one-year renewal. [Knight Testimony and Documents]
Knight said Property and Procurement rejected the lease "because the department … policy does not allow for such advance charges."
"I recalled that WICO had provided temporary housing to Gov. Turnbull when mold issues were being remediated at Catherineberg. Also, Ms. Corneiro mentioned to me that the residence’s owner was reaching out to her for payment, so I decided that a possible solution would be to bring this matter up at the next day’s WICO board meeting on April 14," Knight said
Knight said at some later point he asked WICO board member Michael Watson to try to negotiate "an adjustment." They agreed on $12,500 per month, inclusive of utilities for the five months. Later, after the rental became public and controversial, WICO rescinded the resolution and passed a new one with the new fee and rescinding the plan to offset the rent against what WICO owes the government.
Sen. Novelle Francis said he would like to "put this behind us," and regretted the controversy. Francis asked Knight if he had "any consideration to the public seeing this as excessive?"
"Quite frankly that is why it was a short term contract," Knight said.
Sen. Neville James broke in at this point to say the unsigned lease says it runs "through April 30, 2016."
"That is obviously a typo, senator," Knight responded.
James then pointed out that the lease also calls for a full year’s rent: "Below that it says the payment for rental due for this four-month term and the 12 month extended agreement will be $226,000 … So there was the ability for this agreement to be extended throughout 2015? James asked
"You are correct. But let me add, this is an unexecuted contract. And it was for things like this that the contract was not executed," Knight said. "The $50,000 was never paid and quite frankly would never have been paid. To me it was excessive," he added.
But at another point in the hearing, he also testified he only took the contract to WICO after submitting the same contract to Property and Procurement and being turned down.
Sen. Marvin Blyden asked when the contract was submitted to Property and Procurement. "Maybe January or February," Knight said. "It kind of lingered down there … and I believe that was April when they said that because of the deposit, the security deposit, the government doesn’t do that type of an arrangement. So that is when I, you know, had to think of an alternative on where we were going to get funding for the governor’s residence and that’s when I brought it to the WICO board."
Although Knight said he brought the contract to WICO after it was rejected "because of the deposit," when pressed on why WICO then approved the same contract, Knight pleaded ignorance of the contract’s content, saying he had not even read it.
"When a contract is sent down to Property and Procurement the onus is on them for legal sufficiency, for terms of the contract and all that type of thing. And I had really not read the contract, quite frankly and when it was sent over there, it is really their responsibility to review the contract for validity. And when we were told that because of the security deposit it could not go forward, that’s when we got it back," Knight said.
Blyden asked if the government was now paying even more to house Mapp, now that Mapp is now staying in hotels, with no fixed lease and no fixed residence.
"I don’t have the numbers in front of me but I think that conclusion can be drawn," Knight responded.
Sen. Sammuel Sanes asked "is there any documentation whatsoever, be it a lease, be it any type of document, that has the signature of Mr. Ashby and a representative of the government or a representative of WICO?"
"No there is not," Knight said.
Sanes then asked if there is an audit several years from now, "what documents will be at hand in order to clarify any questions an audit might have?"
WICO attorney Adriane Dudley deferred to WICO Executive Director Joseph Boschulte to answer.
"No we definitely have all the paper support for the transaction. We have the invoices, we have the resolution by the board that … " Boschulte said, whereupon Sanes interrupted, asking "Do you have the lease?"
"We do not have a lease. But in this situation we do not need a lease for this transaction for auditing purposes," Boschulte said.
"And you are saying for the record that can withstand an audit?" Sanes asked.
"Correct. It is very similar to when you book a hotel room and you get your hotel lease, ah, folio, and you pay, I mean there is no lease arrangement with the hotel. You just pay, you have the supporting documents to show and then you sign and we pay the piece, so from an auditing standpoint that’s sufficient," Boschulte responded.
Sen. Justin Harrigan asked if WICO had any legal obligation to paying Mapp’s rent at a villa. Boschulte referred to WICO’s lease of Catherineberg to the government for a dollar a year.
"But then you took on the cost of this villa, which is much more than a dollar a year," Harrigan said.
Dudley’s response seemed to say both that there is and there is not an obligation to pay the rent, citing the legal authority of "tradition," and the fact that the law requires the governor to reside at Government House.
"There is no statutory obligation on the part of WICO," Dudley said. "But because of our lease of Catherineberg, and the tradition of providing temporary housing when such is necessary, it is our feeling that yes, we have an obligation," she said. But she went on to say she "wouldn’t call it a quote-unquote legal obligation, except pursuant to the lease."
"And that could be construed as a legal obligation inasmuch as we’ve got the lease. I think I would have to consider it carefully, in answer to your question because of Senator Roach’s very cogent point that the Organic Act does not provide for Catherineberg as the official residence," she said.
At one point, WICO sent Ashby a check for $107,563.56, saying "it was imperative that the board authorize payment of the invoiced amount of $107,563.56," Knight said. But ultimately, the government-owned entity paid $62,500, he said. He said it "was understood that a rebate of some kind would have to be negotiated," although there was no contract. "And WICO did in fact receive from the owner a refund check for $45,036.56."
He later said there was no contract and only an amorphous, changing, "verbal understanding."
Sen. Novelle Francis asked Ashby what caused him to reduce the rent and send a check back to WICO.
"After the back and forth about the lease not being signed and six months without getting payment I just agreed to move forward and get it over with," Ashby said.
Although several senators declared they personally liked Mapp, the controversy and lack of transparency gave them little choice but to keep asking questions.
Sen. Almando "Rocky" Liburd said "the governor and me are cool and people can see that." But he also said "there are too many issues surrounding the governor that are not cleared up from the outset. Someone gives half a story and you have to come back. Something is wrong with how you are operating and that is why you are here."
"The governor is my good friend. I want to put that on the record," Senate President Neville James said. "I sat here over the hearings for Gov. deJongh do you think I really want to go through this again?" he said later. But he later said he disagreed with WICO about turning over its records.
Sen. Myron Jackson reiterated his view that the governor should live at Government House as provided in the law.
"The problem I have as an elected official, is when government employees and board members and those of us given the public’s trust, when we come up short in upholding the law," he said.
"So someone made the decision that the villa was going to be where the governor was going to reside, until whenever, whether it be next year two years or five years from now, when we finally address this problem and that does not sit well with me," Jackson said.
James asked who determined that Government House is not suitable for residency.
"I believe the architect William Taylor has taken that position," Knight said. He went on to say Government House is not compliant with the accessibility requirements of the federal Americans With Disabilities Act.
"Hold on a second, the governor needs ADA compliance for his residence?" James asked.
"Well for visitors," Knight said. "Furthermore, I think you have to look at, in future administrations a governor that had a large family, for example.You don’t always have a single governor," he continued.
"But if I am a single governor, I can look at the Organic Act and say I can live at Government House?" James asked.
"Like I said, we need vision," Knight responded.
Roach said he read Taylor’s assessment that Government House could not be used to live in and said it was not acceptable, because it is very brief – only two paragraphs of a multi-page report, and the problems it cites, the report itself says are easily fixable.
Roach read the entire section about Government House, showing that it cited lighting, soundproofing and ADA accessibility. He quotes Taylor saying he had proposed solutions to the lighting and soundproofing and "the go-ahead is expected." Taylor also wrote "a solution for the disabled access to the building has been proposed. Approvals pending."
"It is not ADA accessible but it is being presently used for government offices. It has been used for government offices since the conversion from the residence. And if you use this letter it also says there is a solution to the ADA issues," Roach said.
More than anything else, senators objected to WICO’s refusal to turn over transcripts of its April meeting.
Roach said it dismayed him that WICO kept "moving the target," with new justifications for not releasing the transcript of the hearing, after losing the case they cited to justify it to begin with. He said the the Legislature specifically required WICO to keep those records and make them available.
"Now attorney Dudley says that there are other pending cases that suggest that public records are still a different issue and can’t be released. And won’t be released to us," Roach said. "So here we are, the entity that created WICO as a public entity, being told that we can’t get at the records that we said had to be created … and that should not be acceptable to the Legislature," he said.
Blyden asked the Legislature’s legal counsel on duty to say if the Legislature had a legal right to the transcripts and minutes. The attorney, who was not identified by name during the hearing, said the Legislature explicitly directed WICO to submit extremely detailed financial information to the Legislature on a quarterly basis, in the acts taking ownership of WICO. She read the entire section of law, pointing out that the same passage says WICO must prepare verbatim transcripts of all meetings.
"The last sentence basically does not say that the transcripts need to be prepared to be submitted to the Legislature. But … the intent here, in my opinion, based on the total reading of (the section of law) is that these documents should be made available to the Legislature in addition to all of the other information that is stated in the previous sentence," she said.
Dudley said she disagreed and WICO would not turn over the records.
"We go way back. But I disagree with your position on releasing the minutes, and what we will do I don’t know," Liburd said to Dudley.
James also said he disagreed.
"We are in disagreement … and at some point we are going to find something to address that. Our legal counsel has spoken, that is our position and we want that (transcript) and I will be forwarding documentation to you in that regard," James said.