The weather has been cold all week in Washington, D.C., but for Gov. John deJongh Jr. the climate in the nation’s capital has been simply tropical. Rushing from meeting to meeting to sit with lawmakers and explain the territory’s position in the rum cover-over controversy, DeJongh told reporters Wednesday, “All I’m feeling is heat.”
The governor has been in the nation’s capital since Monday. He held a conference call with V.I. media Wednesday evening to discuss his progress in telling the territory’s side of story in the growing rum controversy with Puerto Rico.
There were other things on the agenda – namely, the territory’s position in the pending health care bill and the Omnibus Spending bill passed last week by the House, which contains $33 million for a variety of projects in the territory. But the rum controversy simmering between the territory and Puerto Rico took top billing and kept the governor moving from one meeting after another with lawmakers to “educate and reinforce to them why those agreements are important” to the territory’s economic stability.
At issue are agreements between the territory and both Diageo Corporation, the world’s largest alcoholic beverage company, and Fortune Brands, the international spirits company that owns Cruzan Rum. The two agreements use funds from the cover-over program to help the companies build and expand on St. Croix, ensuring they will do business on the island for the next 30 years.
Puerto Rico has complained that the deals are an inappropriate use of the money. According to P.R. officials, the Diageo deal will result in almost $3 billion going to the company over the 30-year term of the deal. They have launched a campaign alleging that the territory used cover-over money and other incentives to lure the company away from Puerto Rico—a charge the governor, Delegate Donna Christensen and Diageo officials strongly deny. As a result, P.R. officials have called for a “cap” on the amount of such funds that can be used as a direct subsidy to the company.
DeJongh and Christensen have met with officials from both sides of Congress, including House Speaker Nancy Pelosi, arguing that lawmakers should not second-guess how the territory goes about creating economic growth. Diageo will benefit from the deal, the governor has said, but the territory will benefit far more. The deals were a legal use of the funds, and changing the law now to retroactively invalidate the agreements endangers the territory’s entire economic development program, a program which has allowed the U.S. Virgin Islands to avoid mass layoffs of government workers when other jurisdictions, including Puerto Rico, have had to do so.
One of the lawmakers DeJongh met with this week was Sen. Bill Nelson, D-FL, who has announced plans to submit a bill to strictly limit the amount of direct subsidy that can be given a company in the spirits industry to 10 percent, from all sources.
“It was a cordial meeting,” the governor said.
DeJongh said he was able to explain the cover-over program to the senator, but Nelson had to leave for a vote on the Senate floor before he could express his own position. The governor said this won’t be the last meeting.
“This is not the end of the conversation … this is the beginning,” deJongh said.
Other lawmakers deJongh and Christensen met with this week included Sens. Jon Kyl, R-AZ; Robert Menéndez, D-NJ; and Jeff Bingaman, D-NM; and Reps. Xavier Becerra, D-CA, and John Lewis, D-GA. The governor said he hoped to arrange a meeting with Sen. Chuck Schumer, D.-NY, before he leaves Thursday.
He also said he’d met with media members, including a senior writer for The Hill and the editorial board of the Washington Times, which recently ran an editorial supporting the territory’s position in the controversy and urging Congress not to derail the economic development work in the territory by changing the cover-over rules.
In his conference call with reporters, he also said the government has received support from local labor leaders, including the V.I. Labor Council and the Steelworkers local, which both sent letters to Congressional leaders.
“That’s an indication the labor unions understand the importance of the agreements,” the governor said.
