May 20, 2005 – Sen. Adlah "Foncie" Donastorg, chairman of the Senate Government Operations and Consumer Protection Committee, will issue subpoenas to members of the Economic Development Commission next week to attend a June 2 hearing.
The commission had been previously invited to testify at a March hearing of the committee; however, the majority of the commission members did not show up.
Donastorg had called the March hearing to take testimony from the EDC on its decision to approve a renewal tax benefit package for Innovative Telephone despite pleas from Donastorg and other legislators and public officials to not do so.
The senator said Thursday he did not understand why the EDC would grant a renewal of benefits for Innovative Telephone – "one of the largest violators of the EDC program in recent history" – at a time when the territory is struggling to meet its financial obligations.
"They seem to be far removed from reality," Donastorg said of the EDC members.
Innovative Telephone's benefit package had expired in September 2003. Despite telling its regulating body, the Public Services Commission, that it would not seek a renewal of its benefits, the company reapplied for an extension of its certificate early last year. It's request was met with staunch opposition; however, because the telephone company had failed to meet several of the terms of its previous benefit package. (See "Senators Oppose EDC's Settlement with Innovative").
Donastorg said he wanted to know the EDC's reasoning for granting a renewal package for a company that had clearly been in violation of its previous terms and thus called the March committee hearing. However, only two commission members appeared – Randolph Allen and Louis Willis. EDC Chairman Dean Plaskett and members Kent Bernier, Willis Todman, Mary Ann Pickard, and Jose Penn did not attend the March 22 hearing.
At the hearing, Willis told the committee that he had voted in favor of the benefit renewal because he felt the telephone rates would go down by doing so. Under questioning from Sen. Celestino A. White Sr., Willis also revealed that Gov. Charles W. Turnbull had called him to attend the meeting and told him to "vote the right way." (See "Senators Probe Vitelco Tax Break Decision").
Senators decided to subpoena the other EDC members at the March hearing. Donastorg said he waited to receive a hearing date from Sen. President Lorraine L. Berry before issuing the subpoenas. He learned this week that he was given the June 2 date for his committee hearing.
Donastorg said in a release that he expects the hearing to be "enlightening" and hopes the EDC will comply with requests to provide a copy of the transcript of the executive session where its members voted on Innovative Telephone's renewal package.
The tax breaks granted to the phone company are retroactive to the day after its first benefit package expired – Oct. 1, 2003. The new package provides the company with 100 percent exemptions on all taxes except income taxes and a 1 percent exemption on custom duties.
"This is just beyond ridiculous," Donastorg said. "We have been trying to find out if Vitelco paid taxes over the past year. Now we have the answer. How are the hardworking men and women of this territory supposed to feel when they diligently pay their taxes on time each year?"
Turnbull has to approve the new benefit package for Innovative Telephone before it can be implemented.
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