Guest Opinion: Diageo Partnership
Guest Opinion by Dwane A. Callwood
I am amazed at how quickly we seem to forget here in the Virgin Islands. I am very concerned that the Governor is calling the Senate into Special Session to consider more borrowing to keep the territory afloat. I concede we are in tough economic times. However, I believe that borrowing should be our last resort. As such, other avenues should be pursued before we turn to more debt. Wasn’t it just a year ago that the current governor presented the Diageo catastrophe?
Hasn’t the Governor consistently refer to the contractual agreement between Diageo, Plc and the Government of the US Virgin Islands as a “partnership”?
Didn’t he aggressively take to the airwaves and talk shows to promote this “partnership” and all that our new “partners” would bring to the territory? Didn’t administration continually toss about the figure of $3 Billion in the form of “an average of $100 Million per year for 30 years into the VI treasury” thanks to the new “partnership”?
On June 26, 2009 Ryan Donmyer reported on Bloomberg.com that as a result of the contractual agreement between the VI Government and Diageo, our new partner an additional $2.7 Billion dollars in tax incentives (outside of the agreement). Governor DeJongh indicated that he had no idea his deal would help make the world’s largest liquor distiller the most unlikely beneficiary of the emergency Troubled Asset Relief Program approved by Congress just four months later.
Before proceeding to the bond market, would it not make sense to ask our new “partners” to perhaps give us an interest-free cash advance of $100 Million annually for the next five years and charge it against our share of the leftover “cover-over” revenues in years 26 thru 30 of our agreement? That’s not an unreasonable request for us to make. We are going to build them a taxpayer funded state-of-the-art rum producing facility that they will own outright, once construction is complete, and we’re even buying the molasses to be used in that facility. The contractual agreement has gone from lopsided to totally one-sided. According to the Governor, we are partners. Partners look out for each other. Don’t they?
Dwane A. Callwood
July 8, 2009
the government could start by reducing the size of the senate and laying off government workers like puerto rico has done,why is it we always try and beg money from the businesses down here instead of tightening our belts,there is so much waste in all agencies here,it’s pathetic
My question to this entire Diageo deal is that of recent, all we hear is that the money derived from Diageo will be used to pay back, to do this and to do that. But what is not being answered is what if Congress regulated the usage of the rum cover over money? (There is a Bill waiting to be acted on.) If the scenario changes to where it is regulated and Diageo is no longer receiving 45% of the money back, will the VI still have a deal with Diageo? Why are the Senators not feeding into this? Could you imagine Diageo pulling out and leaving us with $250 million + the cost of that debt to payback? This could mean near bankruptcy for the Virgin Islands! Yet our Senators, specifically the majority, keeps dancing to the Governor’s beat (to their detriment)!
ladlie…the Governor just needs to send home the thousands of employees he has hired at outrageous salaries! Then we would not be having this problem.
Remember the contract allows Diageo to pull out if the cover-over extension is revoked and this is a possible outcome considering Puerto Rico’s lobbying and the recent Bloomberg article. If that happens, we can add the recent $200m line of credit authorization and the $87m bond authorization, plus the amounts necessary to service these debts, and you can clearly see we are in serious financial trouble. I’m just amazed at how some people are so infatuated with this Governor that they can’t see he is doing many of the same things for which they blasted previous administrations. This behavior is why our politicians walk right over us…we allow them to.
I have to admit that Diageo really took advantage of the administration when they were negotiating that deal. That one is clear as ever.
Who is to say that sticky fingers “de Wolf” didn’t work a deal of his own with Diageo? It’s hard to see the bigger picture “Virgin Islands” when your only thinking about yourself.
i followed the whole Diageo deal, read the agreement several times, and found that there are a few million dollars in the Diageo bond issue that aint committed to nothing. Considering how the administration took a reprogramming to fix roads as a go-ahead to fix the Governor’s house, it scary to think what is going to happen to the uncommitted funds
Does the Lt. Governor have security improvements at his house too? Maybe that is where some of the money is going.
Kudos to those four? Senators that voted against the bond issue. Can CIF post the vote?
I would like to know who voted against it too. I know it was on the news, but we need a reminder.
Donastorg, James, Nelson, O’Reilly, Richards
Not so fast…you are so right. Why do you think there is so much passion in getting this thing enroute even in not knowing the fate of the bill that was introduced to the House??? Dollar dollar bills y’all!
Which James voted against it?
Neville of course.
I just heard an interesting idea on RR’s talk show. Is gov.de jongh really a Republican in Democrat’s clothing? Did our local Reps. find a way to get around the large numbers of Democrats in the territory. Does this explain the million$ campaign and dogged support from r.morgan, h. shumbum, and a.golden on the talk shows?
Not to forget h.redfield.
Interesting conclusion. I always felt that deJongh’s 2006 campaign was of the quality of someone like Karl Rove. It was well organized and used many of the same tactics we saw Rove use over the years. I think Gov deJongh ran an excellent campaign, but his governance is another story.
Campaigning and governing are certainly not one in the same. I see de Jongh as a figurehead more than anything else. Who is really in charge?
When you have millions being pumped into a campaign, of course you can do a lot. I heard it repeatedly that Stanford had a heavy hand in this campaign and the tactic used were replicates of other campaigns that Standford played a major role in!
De Jongh’s campaign was not a “grass root” effort or even the usual VI Dem. one. There seems to be a growing factionin the Dem. Party philosophy/policy : ANYWHERE THE MONEY IS WE ARE!!!!!
Stanford is now wearing an orange jumpsuit. Who would’ve thought that?
Neville James voted against the bond authorization. Wayne James voted for it.