A dramatic news story by a Texas NBC affiliate claiming that a V.I. Economic Development Commission-certified company has interests in African “blood diamonds” appears to have been spawned solely by court documents filed by a disgruntled former business associate of the company’s principal.
Using only court filings as its source, the story claims that “$20 million from electricity customers in Texas and 15 other states has gone to finance "blood diamonds" in Africa.”
Glacial Energy spokesman Brian Kennedy called the allegations “absurd.”
Glacial is a reseller of energy, electricity and natural gas, that moved some of its operation to the Virgin Islands in 2009 to take advantage of the EDC tax benefits program. .
“Glacial never had any investments in minerals,” though Glacial principal Gary Mole “invested in tin years ago,” Kennedy said in a phone interview Thursday. cassiterite, still the major source for tin today, is considered a conflict mineral due in large part to mining done primarily in the Democratic Republic of the Congo that finances ongoing conflicts in the war-devastated country.
The Dodd-Frank Act passed by Congress in 2010 attempts to hold investors and purchasers of conflict minerals feet to the fire by requiring users to prove where they purchased the minerals.
Kennedy was clear that though Mole had investments in cassiterite years ago, it was never connected with Glacial, and there were never diamonds involved. Further, he said, Mole divested his interests, which Kennedy said were in leased parcels of land in the DRC, “years ago. “
The troubles between Mole and Michael Petrus began, when a company, Franklin Power, that Mole had invested in went belly up. Petrus sued Glacial and began filing documentts.
“Mr. Petras’ claims are intended to promote a public scandal and exact a payout from Glacial,” Kennedy said in a prepared statement.
He told the Source Petras and Mole were associated for less than a year from 2004 to 2005.
Lawsuits against energy companies are not foreign to Petrus who has filed at least two against other energy companies in California and New York, according to PACER, a service providing online access to national courts documents.
A local attorney interested in the NBC Blood Diamonds story that had been circulating across the islands via email and text messages said Thursday, “It is a privilege of the law that lets you say anything you want to in a law suit,”adding,” there should be sanctions on people who make wild claims.”
The startling NBC headline: “Lawsuit: Power Company Deals in "Blood Diamonds" is accompanied by a large, blurred image of two fingers holding a brilliant cut, clearly focused diamond seen under a jeweler’s magnifying glass. The caption reads, “A lawsuit in federal court alleges power retailer Glacial Energy has run a "money laundering operation" which has secretly funneled almost all of its profits to a mining operation in an area of the Congo known for "blood diamonds.”
Adding to the spectacular overtones, the story makes reference to “Blood Diamond,” a 2006 action film staring Leonardo DiCaprio that dramatized the effects of mining of precouus metals in Africa.
In the Virgin Islands, Glacial employs 115 people in customer care, billing, pricing, contract administration, sales, human resources, legal, finance, credit/collections and IT being paid an average annual salary of $65.000, according to local spokesperson Mike Giery.
The company has contributed more than $250,000 to local charities as part of the EDC requirements.
The story also says Petrus claims his allegations were being investigated by a Texas public utility commission.
Kennedy said there was no evidence that he knew of to support that claim and added. Glacial will be moving to have Petrus’ claims dismissed.
