In a radio interview Sunday, Gov. John deJongh Jr. said that rejecting a plan to sell the refinery digs a hole in the government’s budget and opens the territory up to potentially millions of dollars in liabilities if Hovensa sues and wins for back taxes.
"I’m extremely disappointed," deJongh said on WLDV 107.9 FM.
In September, Government House announced the tentative sale of the refinery, which closed in 2012, costing the Virgin Islands economy more than 2,500 jobs. It announced Atlantic Basin Refining Inc., a recently created V.I. company, had negotiated the purchase of the refinery. On Nov. 1, deJongh released a legislative proposal codifying the negotiated operating agreement for the refinery.
The operating agreement requires legislative ratification before the sale can be closed because it includes legislative action on tax breaks and other issues.
Many of the senators began expressing concern about the agreement’s provisions releasing Hovensa from all liability upon the sale and about the ability of ABR to pay for cleanup if the deal falls through, and they cited those same concerns Friday when voting to reject the plan.
DeJongh said the decision "has removed the possibility of the payment of $45 million in cash, that would have come from ABR’s purchase of the refinery from Hovensa."
"That is money we badly need to close our budget deficit," he said.
Hovensa is also claiming the territory owes it more than $200 million in tax refunds because it lost so much money the last few years of operation. DeJongh said Sunday he believed the vote to reject the operating agreement "has undermined our strategy to protect and defend the Virgin Islands from the lawsuit Hovensa will likely now bring for the massive income tax refund."
"As part of our negotiations we included a provision for mutual releases of obligations,” deJongh said. “We knew that Hovensa disagreed with us on the scope of the release they were providing. But it was a release that, in the view of our attorneys, covered all claims. It provided a defense that the senators who voted against the agreement apparently felt we did not need. Indeed we are now without a release from them and only the prospect of future litigation," he said
DeJongh said he would have a discussion with Governor-elect Kenneth Mapp and his team on the issues relating to possible litigation.
Addressing concerns that ABR had no financial resources of its own, but only hopes of getting loans, deJongh said Hovensa also had few resources and is legally distinct from its wealthy parent companies.
DeJongh said the initial payment at closing that would have provided the government with $45 million in cash "is one I am very certain they would be able to make."
While ABR would not be able to get financing until after the sale and after the agreement was ratified, deJongh said senators were wrong to think ABR would not be able to follow through.
"They thought that ABR did not have the equity or the financing but ABR showed them they had access to the financing. They just need the analysis that Samsung would have ultimately provided but you couldn’t get to the Samsung analysis unless we had an operating agreement," deJongh said.
But with the deal apparently dead in the water, deJongh said the government – and the incoming administration – would have to look at the various options that now exist.
Governor:
This is what happens when you spend the people’s money on things other than what you are supposed to. You cannot then expect the people to take the deal the rats are offering in order to fix the problems you and the rest of the government caused by living above the means of the average person living on these islands. Since the government employees and others think they need so much more than everyone else, we now have a huge problem. Greed, materialism, taking more than you actually need, etc., all lead to budget problems. The only way to fix these types of problems is to grow morally and spiritually. Money will not fix these problems, but a rise in consciousness will. Money will not fix these problems, but a return to Oneness will.
The people of the Virgin Islands have been badly treated. We are the victims of a systemic problem that prevails within our government. Companies and individuals have successfully deceived many of our elected officials. Our government has been cajoled by the best and they never saw it coming. We are supposed to be a tourist destination; yet, we potentially could be left with an iron eyesore monster, rusting away. You mean to tell me that during the merger deal between Hovic and PdVSA, our government did not mandate a required removal of facility and clean-up in the event of a shut-down. What!!!! I was on the inside of Hovic during this period and I will tell you what the Hess big wigs did. They invited the senators several times to the Admin Bldg. and had their chefs prepare lobster tails coated with creamy mushroom sauce for their distinguished guests. They pampered them into submission. Who lost? We did!
Now, our government feels like a woman who has been wined and dined and complemented and cajoled and sexed. Only to wake up during the middle of the night to find out that her partner has snuck away. What did I do, she thinks? Our government got screwed in the same way and is just starting to wake up!