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Carnival Committee Says No to Senate Audit

June 5, 2004 – The Senate Finance Committee attempted on Friday for the third time within a month to look at the finances of the V.I. Carnival Committee, and for the third time, despite having subpoenaed various documents, it received no satisfaction.
Carnival Committee officials Caswill Callender, executive director; Kenneth Blake, chair; and Derek A. Gumbs, treasurer, testified before the Finance Committee at a public hearing but refused to supply subpoenaed financial documents.
The original hearing, scheduled for May 10, had been postponed at the request of the Carnival Committee and re-set for May 25. Blake and Callender did not show up at the May 25 hearing. The two said they were not aware the meeting had been scheduled and that, despite documentary evidence to the contrary, they had received no invitation to attend.
On May 25, the Finance Committee moved to subpoena Blake, Callender and Gumbs as well as a list of all donors and the amounts, contracts with calypsonians, contracts for services, documents on revenues received for each event and expenses for each event going back to 2001. The subpoena for Callender to attend was later rescinded after Sen. Adlah "Foncie" Donastorg, Finance Committee chair, learned Callender had recently undergone surgery.
In a June 3 letter to Donastorg, the Carnival Committee objected "to the public disclosure of any documents or information that extend" beyond what is required by the V.I. Code. The letter, signed by Blake and Gumbs, cited the need of the Carnival Committee to protect "trade secrets" and "privileged transactions between itself and private entities."
Furthermore, Callender, who has served on the Carnival Committee since 1980, becoming its executive director in 1996, maintains that the government has no right to audit the committee. "The V.I. Code says nothing about auditing a corporation," he said.
The Carnival Committee is registered with the Lieutenant Governor 's Office as a non-profit corporation but receives a substantial portion of its operating budget from Virgin Islands taxpayers. In the last three years it has received more than $1.2 million from the government. Additionally, the committee is given free use of government facilities, vehicles, equipment, personnel and other resources for carnival.
Sen. Louis P. Hill, a Finance Committee member, suggested taxpayer support might amount to 50 percent of the Carnival Committee's total budget. But Blake took the same position as Callender, saying that "it must be interesting, and in some cases frightening, to each and every corporation as they wait for the outcome of this case. Just imagine, the Legislature being able to walk in and examine [a corporation's] sensitive documents, contracts, etc."
Attorney General Iver Stridiron and Inspector General Steven van Beverhoudt, who were invited to the meeting to field legal questions, disagreed with the Carnival Committee leadership's assessment of what the V.I. Code says.
Van Beverhoudt said he has been interested in examining the Carnival Committee finances since 2002, because "the committee has never been audited." Van Beverhoudt said that Callender and Blake rebuffed his attempts. "We want to audit them, but we're stuck here in this back and forth," he said.
Van Beverhoudt had asked Stridiron to look into the matter. In a September 2002 opinion, Stridiron wrote that the Office of Inspector General "has the authority and a duty to audit the books and accounts of the Carnival Committee." But the Carnival Committee has maintained its stance denying that the government has this right.
For much of the nearly six-hour meeting the senators maintained a conciliatory tone, trying to coax the Carnival Committee officials into accepting the need to turn over the documents.
Sen. Roosevelt David, a Finance Committee member, said that the Carnival Committee's actions have created a "cloud of suspicion" and urged the men to reconsider their position and "put the cloud behind."
Donastorg repeatedly directed the hearing back to "the fundamental issue." He said, "This is the people's money you are using, and the people have a right to clarity and accountability when it comes to their money."
Among those present for the hearing were John Hodge, chief instructor of the Territorial Court Rising Stars Youth Steel Orchestra, and Allan Fortune, the 2004 V.I. Carnival Calypso Monarch.
Hodge, who testified for close to an hour, outlined what he called a 20-year history of "disrespectful and arrogant treatment" by the Carnival Committee. Fortune, who performed as calypsonian "Brother Mudada," said he still has not received his $5,000 prize money or money he's owed for performing in the international show.
After rounds of questioning, the Finance Committee had been given to understand that:
– Callender, Blake and Gumbs do not know the current balance of the Carnival Committee's only checking account.
– The Carnival Committee leaders don't know how much money remains to be paid to 2004 vendors and performers.
– The Carnival Committee suspects it doesn't have enough money left to pay what it owes.
– The Carnival Committee ended up $90,000 short for Carnival 2003.
Donastorg asked Blake if the Carnival Committee would submit to an audit, and when Blake answered that it would not, the mood in the Senate chambers changed.
A visibly bristling Sen. Almando "Rocky" Liburd said, "Are we actually begging the Carnival Committee to allow us to audit them? I don't understand this."
Sen. Celestino A. White Sr., who is not a member of the Finance Committee, asked van Beverhoudt if he has the resources now to investigate the Carnival Committee. Van Beverhoudt said that because of budgetary and manpower constraints, he would not be able to do such an audit until 2005. White then asked van Beverhoudt what would happen if he attempted the audit and the committee resisted.
"Then it would end up in court and a judge would have to decide,'' van Beverhoudt answered.
At 10:50 p.m., Sen. Ronald Russell, a Finance Committee member, said: "I will not let any entity disrespect this institution." He shortly thereafter moved to "immediately petition the Territorial Court of the Virgin Islands to enforce the subpoena and for any other relief deemed necessary to protect the authority, responsibility and integrity of the V.I. Legislature."
After the motion passed, Donastorg said: "This is not personal. As the first branch of government, the Legislature has the responsibility to see that the taxpayers' money is being used properly."
Callender, ruffled after hours of questioning, took offense at the whole proceeding, saying that "Carnival Committee members are getting frustrated. We're not sure if we're going to be out there putting on a carnival in 2005."
Donastorg replied, "Carnival will still be here long after you and I are gone, Mr. Callender. And make no mistake, there will be a Carnival 2005."
Finance Committee members present at the hearing were David, Donastorg, Liburd, Sen. Shawn-Michael Malone and Russell. Members not present were Sens. Norman Jn Baptiste and Luther Renee.
In a recent interview, Callender said that on June 26 the Carnival Committee will hold a public symposium at which copies of its 2004 financial statement will be available. "We're putting the entire thing together right now, and anyone with questions about the work of the Carnival Committee is welcome to attend," he said.

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