Lawmakers Wednesday continued to question why the company formerly known as Viya is receiving tax incentives after a corporate restructuring saw local executives laid off and a number of Virgin Islands jobs exported to Guyana.
The discussion came during the first half of a wide ranging Senate Housing, Transportation and Telecommunications Committee meeting that included infrastructure updates from the V.I. Public Works Department, Water and Power Authority, Information Technology Bureau, Management and Budget Office, Virgin Islands Next Generation Network, T-Mobile and One Communications — a rebrand of Viya.
Members of the 36th Legislature grilled Viya leadership about the layoffs during a March Committee of the Whole meeting. On Wednesday, newly installed One Communications chief executive Siobhan James-Alexander said she was aware of the senators’ concerns.
“Throughout the process we have been sensitive to the needs of our employees, particularly those who have served with us for so long,” she said during prepared remarks. “We have made every effort to smooth their transition back into the broader workforce or even retirement.”
Sen. Clifford Joseph asked about tax incentives the company receives through the University of the Virgin Islands Research and Technology Park.
“So, how is it that you’re moving jobs out of the Virgin Islands, or the territory, while benefiting from our territory?” he asked.
James-Alexander said the changes were part of the company’s attempts to remain viable in an increasingly costly industry and that One Communications is committed to its current structure and the Virgin Islanders comprising its workforce.
“We remain committed, however, to the current structure and engaging and ensuring that the Virgin Islands’ persons become part of our workforce,” she said.
Joseph seemed unconvinced.
“Financially, you’re gaining from the Virgin Islands, and then you don’t want the people here. It’s not making sense to me, personally,” he said.
Sen. Carla Joseph reiterated her concerns about the layoffs’ impact on the territory’s income tax base, and Senate Majority Leader Kurt Vialet returned to the issue of tax incentives.
“The reason why tax incentives were given to companies coming to the Virgin Islands was to maintain employees, to grow the workforce, to have a base that are going to receive additional benefits — health care, insurance, retirement,” he said. “And what Viya has been doing is systematically getting rid of those individuals, transferring those positions to Guyana and getting rid of Virgin Islanders that work in those area for over 20 years. So how can you say that that is a prudent financial decision? Prudent for who — for the company, or for the Virgin Islands?”
James-Alexander said she noted the senator’s comments.
“It is a balance between both employee and company, so the decisions that we make — we try to balance customer, company and employee,” she said.
“It’s a balance for One, and that’s why you rename — you’re hoping that we forget what Viya has done to the employees of the Virgin Islands,” Vialet replied before calling on the RTPark to be transparent and adhere to the same compliance rules as the V.I. Economic Development Authority. “And that is going to be codified so that no longer can companies come to the Virgin Islands and take advantage, and import and hire individuals that were held by locally qualified Virgin Islanders. That’s a definite no.”
Sen. Marise James went further, noting that previous iterations of the company began receiving tax benefits through the territory’s Economic Development Commission Program.
“In terms of companies and the benefits that they receive in the Virgin Islands, we really need to do a deep dive into both the Economic Development Authority and the RTPark, and how companies are able … to move from being an EDC beneficiary whose certificate expired in 2003 and then later become an RTPark tenant” around 2012, she said.
The EDA is one of the stated reasons for the U.S. Virgin Islands inclusion on the Council of the European Union’s list of noncooperative jurisdictions for tax purposes — sometimes called the “blacklist” — which lists countries and territories considered to have unfair or opaque tax practices in an effort to combat worldwide tax fraud, evasion and avoidance. In its assessment of the U.S. Virgin Islands, the council highlighted “harmful preferential tax regimes” like the EDA, exemptions for companies and aspects of the International Banking Center and Regulatory Act.
Since the most recent update in February, the list includes American Samoa, Anguilla, Fiji, Guam, Palau, Panama, the Russian Federation, Samoa, Trinidad and Tobago, the U.S. Virgin Islands and Vanuatu.
Lawmakers on Wednesday also received testimony from V.I. Next Generation Network President and Chief Executive Stephan Adams, who said a $2.1 million grant from the National Technology and Information Administration was terminated last week after the Trump administration said it was “created with, and administered using, impermissible and unconstitutional racial preferences.”
Public Works Commissioner Derek Gabriel provided testimony on subjects including Liberty VI’s undergrounding efforts, testifying that the company proposed “micro-trenching” to minimize the impact on the territory’s motorists. Gabriel said existing policy mandates that lines be buried 18-24 inches below the roadway and that the department added special conditions to its telecommunications applications, including a five-year warranty and agreements for line relocation when necessary.
“Our goal is to mitigate risk and minimize our liability in this regard,” he said. “The need to relocate a line or multiple lines may arise for the purpose of emergency road maintenance or an upcoming planned project. It is important to have these items in place up front, as — once installed — these lines effectively become part of our built infrastructure.”
Vialet pressed Gabriel for his thoughts on the workaround later, noting that the territory’s roads already boast nine-inch deep potholes.
“We are not in too big a favor of it,” Gabriel acknowledged. “I think that’s a fair statement.
