Other Peoples' Money. It is a hallmark of capitalism...find a way to accomplish a goal without using any of your own money - or at least, as little of it as possible.
That is not simply a principle for individual wealth, but it is also the formula for business success. The borrower always hopes to get the best deal. The lender always hope to get the best deal. For instance: home loans...borrowers thought they were getting the best deal by minimizing their monetary outlay through ARMs. Likewise, (predatory) lenders thought they were going to get the best deal through the influx of cash that would come in later years. My, how we were wrong!
There's much to be gleaned from the current economic crisis, and untold sums ($700 Billion and rising) it will cost the American Taxpayer to clean up a mess they didn't (really) create. Yet, we see in our own Virgin Islands preparations are being made that could put us on the same dastardly course.
As we've been discussing in previous posts (post 1, post 2, post 3), the Virgin Islands Legislature is considering a bill that would provide $34 Million of TAXPAYER funding to enable Crucian Holdings LLC to open their privately held fish farm on St. Croix. It became the duty of Virgin Islands Watch to investigate this issue and tell you what you need to know...tell you the things no other media source in the Virgin Islands will tell you.
Earlier today (Wednesday, 24th), I told you that Senator Jean-Baptiste's office would call me back. At that time, I highly doubted it: why would a Senator from the Virgin Islands call me - someone not living in the VI, especially on something so controversial? However, much to my surprise, I received a call from Senator Jean-Baptiste.
So, first - I want to applaud the Senator for stepping into the fire without fear. We spoke for about 40 minutes, and I peppered him with numerous questions on this bill. He answered all of my questions, even ignoring phone calls to continue our dialogue. By that action alone, I gather that he must mean well...for even I know: he didn't have to speak with me.
It seems an ideal time for the Virgin Islands to be looking at this issue. Here we have the Federal Government bailing out corporations by the hundreds of billions in taxpayer dollars. And, we're about to sing the same tune.
I framed the dialogue with Senator Jean-Baptiste with that as the back drop. Reminding him that Senator Barack Obama is against the bailout and that the Democratic Party has essentially called it a farce, I aske Senator Jean-Baptiste what he thought of the Federal bailouts. He called it the "metamorphosis of Corporate Welfare." He went on to say that it "sends the wrong message" for the government to be bailing out corporations. He called the policy "not something I support," and that it's "not the best option."
So - I asked, why is it proper for the Virgin Islands Government to be proping up corporations? And, the response was that those getting Federal bailouts "chose to do things the wrong way and are facing the consequences."
He went on to compare this situation to that of an individual applying for a home loan. Yet, when you or I apply for a home loan we will have to pass a test of credit worthiness. To his credit, Senator Jean-Baptiste said that his bill only authorizes the PFA to provide funding...it doesn't demand the provide the funding. Supposedly, the PFA will perform due dilligence to ensure CH's ability to pay. I asked Senator Jean-Baptiste if he would be willing to mandate that this process be open to the public - taking advantage of technology - and he was open to that. Nevertheless, we still must ask: what is their track record?
Crucian Holdings LLC had no website until after Virgin Islands Watch articles. They now have a web domain, but there is nothing on the site. However, through searching, I have found that Crucian Holdings LLC used the services of Fine Print Consulting Services, LLC to help their efforts. Fine Print Consulting is headed by Adlah "Foncie" Donastorg (former - and now returning - Senator). Does anyone else think this smells fishy?
But, that's a different story - may be more there...
Crucian Holdings LLC is headed by A. Bruce Weber and Peter Conforto. The duo appears to have numerous business holdings (here, here, & here - at least). These businesses seem somewhat successful.
So, I asked Senator Jean-Baptiste his rationale for this bill. He said that he looked at the world food situation, the capacity limits upon local fishermen, and the possible contamination of seafood imports from China. He said that those factors coupled with the need to "enhance agricultural projects" in the Virgin Islands made this seem like a good opportunity. As he said, he "is going to try to do something" to move the development of the Territory forward.
Yet, with all of these factors, it seems as if there would be numerous paths through which Crucian Holdings LLC (CH) could acquire the money they need. But, Senator Jean-Baptiste said that CH doesn't have the capital and so they are seeking a loan. Hunh?
It cannot be that they don't have the capital - I know that's what they said, but it must be (in the spirit of Other Peoples' Money) that they don't want to use their capital. Now, that is fine. But, if I understand loans correctly, the borrorwer is usually required to put up some collateral. What collateral are they putting up for this loan? Have we valued their business holdings? And, are their other holdings being used as collateral?
Again, according to Senator Jean-Baptiste, CH has stated that they will use a NOAA grant to repay the loan. My initial question to the Senator was, "if they can get a NOAA grant to repay the loan, why not get the grant instead of the loan?" Senator Jean-Baptiste replied that CH said that due to the Presidential & Congressional Elections, the process would take too long.
1) Why is that our problem?
2) Does the government stop functioning because of the elections?
I went to the NOAA Grants Management Division website. Here's what I found:
Apparently, they lied to Senator Jean-Baptiste...unless one of them will contact us and tell us something different.
CH wants the farm as part of their "vertical integration" strategy. Such a strategy offers compelling benefits. Because of these benefits, they are ripe to harvest extraordinary profits. That being the case, why must we subsidize their endeavor? Most likely, if the $34 Million loan is approved, they will apply for EDC benefits. The profits they will accrue will effectively pimp the Virgin Islands.
Are you ready to be used?
What's worse: this vertical integration strategy includes CH taking the fish to market through a restaurant chain, "Crucian Cafe." If we are aware of the problem Ethiopia had with Starbucks (see here), we would understand the importance of this. How can CH profit from the use of the term "Crucian?" They will already be milking the Virgin Islands taxpayers, raping our land and resources, and benefitting from both their business model and our tax breaks for businesses. You mean to tell me we're supposed to give them free reign to profit off of our identity?!
Ridiculous!
All that said, I am grateful to Senator Norman Jean-Baptiste for his time and openness. I have invited him to visit the blog and leave his comments for further follow-up. He said that he is definitely willing to shelve this legislation should it become apparent that the people are against it, but he simply wanted to take a "brave and courageous stance" to do something.
To close our conversation, I asked if he would be willing to at least open the legislation up to require competitive bidding. He said that he is "amenable to this" and would not mind doing so...that it was something he "can embrace."
Look at your power! You have the ability to shape legislation!
So, it is left for us to decide. We must decide if there is any form of this legislation that we find acceptable.
For myself, I don't agree. If they want a loan they should get it from a bank. And, if the banks (who are in business to make money) refuse a loan, why should government do differently? Or, is the Virgin Islands Government about to get into the business of profiting from entrepreneurial ventures and thus, reduce your taxes?
I still say: NO DEAL!
What do you say?
Answer the call: Virgin Islands for the Virgin Islanders...those at home and those abroad!
That is not simply a principle for individual wealth, but it is also the formula for business success. The borrower always hopes to get the best deal. The lender always hope to get the best deal. For instance: home loans...borrowers thought they were getting the best deal by minimizing their monetary outlay through ARMs. Likewise, (predatory) lenders thought they were going to get the best deal through the influx of cash that would come in later years. My, how we were wrong!
There's much to be gleaned from the current economic crisis, and untold sums ($700 Billion and rising) it will cost the American Taxpayer to clean up a mess they didn't (really) create. Yet, we see in our own Virgin Islands preparations are being made that could put us on the same dastardly course.
As we've been discussing in previous posts (post 1, post 2, post 3), the Virgin Islands Legislature is considering a bill that would provide $34 Million of TAXPAYER funding to enable Crucian Holdings LLC to open their privately held fish farm on St. Croix. It became the duty of Virgin Islands Watch to investigate this issue and tell you what you need to know...tell you the things no other media source in the Virgin Islands will tell you.
Earlier today (Wednesday, 24th), I told you that Senator Jean-Baptiste's office would call me back. At that time, I highly doubted it: why would a Senator from the Virgin Islands call me - someone not living in the VI, especially on something so controversial? However, much to my surprise, I received a call from Senator Jean-Baptiste.
So, first - I want to applaud the Senator for stepping into the fire without fear. We spoke for about 40 minutes, and I peppered him with numerous questions on this bill. He answered all of my questions, even ignoring phone calls to continue our dialogue. By that action alone, I gather that he must mean well...for even I know: he didn't have to speak with me.
It seems an ideal time for the Virgin Islands to be looking at this issue. Here we have the Federal Government bailing out corporations by the hundreds of billions in taxpayer dollars. And, we're about to sing the same tune.
I framed the dialogue with Senator Jean-Baptiste with that as the back drop. Reminding him that Senator Barack Obama is against the bailout and that the Democratic Party has essentially called it a farce, I aske Senator Jean-Baptiste what he thought of the Federal bailouts. He called it the "metamorphosis of Corporate Welfare." He went on to say that it "sends the wrong message" for the government to be bailing out corporations. He called the policy "not something I support," and that it's "not the best option."
So - I asked, why is it proper for the Virgin Islands Government to be proping up corporations? And, the response was that those getting Federal bailouts "chose to do things the wrong way and are facing the consequences."
He went on to compare this situation to that of an individual applying for a home loan. Yet, when you or I apply for a home loan we will have to pass a test of credit worthiness. To his credit, Senator Jean-Baptiste said that his bill only authorizes the PFA to provide funding...it doesn't demand the provide the funding. Supposedly, the PFA will perform due dilligence to ensure CH's ability to pay. I asked Senator Jean-Baptiste if he would be willing to mandate that this process be open to the public - taking advantage of technology - and he was open to that. Nevertheless, we still must ask: what is their track record?
Crucian Holdings LLC had no website until after Virgin Islands Watch articles. They now have a web domain, but there is nothing on the site. However, through searching, I have found that Crucian Holdings LLC used the services of Fine Print Consulting Services, LLC to help their efforts. Fine Print Consulting is headed by Adlah "Foncie" Donastorg (former - and now returning - Senator). Does anyone else think this smells fishy?
But, that's a different story - may be more there...
Crucian Holdings LLC is headed by A. Bruce Weber and Peter Conforto. The duo appears to have numerous business holdings (here, here, & here - at least). These businesses seem somewhat successful.
So, I asked Senator Jean-Baptiste his rationale for this bill. He said that he looked at the world food situation, the capacity limits upon local fishermen, and the possible contamination of seafood imports from China. He said that those factors coupled with the need to "enhance agricultural projects" in the Virgin Islands made this seem like a good opportunity. As he said, he "is going to try to do something" to move the development of the Territory forward.
Yet, with all of these factors, it seems as if there would be numerous paths through which Crucian Holdings LLC (CH) could acquire the money they need. But, Senator Jean-Baptiste said that CH doesn't have the capital and so they are seeking a loan. Hunh?
It cannot be that they don't have the capital - I know that's what they said, but it must be (in the spirit of Other Peoples' Money) that they don't want to use their capital. Now, that is fine. But, if I understand loans correctly, the borrorwer is usually required to put up some collateral. What collateral are they putting up for this loan? Have we valued their business holdings? And, are their other holdings being used as collateral?
Again, according to Senator Jean-Baptiste, CH has stated that they will use a NOAA grant to repay the loan. My initial question to the Senator was, "if they can get a NOAA grant to repay the loan, why not get the grant instead of the loan?" Senator Jean-Baptiste replied that CH said that due to the Presidential & Congressional Elections, the process would take too long.
1) Why is that our problem?
2) Does the government stop functioning because of the elections?
I went to the NOAA Grants Management Division website. Here's what I found:
In fiscal year 2006 GMD processed 1,931 awards to support research and conservation initiatives coordinated by state and local governments, non-profits, and colleges and universities. GMD awarded funds totaling $1.036 billion to over 300 recipients. That's more than 25% of NOAA's annual budget committed to making progress in understanding the link between our global economy and our planet's environment.So, 3) How does CH qualify for a NOAA grant? Aren't they a business? Are they conducting research and/or conservation initiatives? Are they a state or local government? Are they a non-profit, college or university?
Apparently, they lied to Senator Jean-Baptiste...unless one of them will contact us and tell us something different.
CH wants the farm as part of their "vertical integration" strategy. Such a strategy offers compelling benefits. Because of these benefits, they are ripe to harvest extraordinary profits. That being the case, why must we subsidize their endeavor? Most likely, if the $34 Million loan is approved, they will apply for EDC benefits. The profits they will accrue will effectively pimp the Virgin Islands.
Are you ready to be used?
What's worse: this vertical integration strategy includes CH taking the fish to market through a restaurant chain, "Crucian Cafe." If we are aware of the problem Ethiopia had with Starbucks (see here), we would understand the importance of this. How can CH profit from the use of the term "Crucian?" They will already be milking the Virgin Islands taxpayers, raping our land and resources, and benefitting from both their business model and our tax breaks for businesses. You mean to tell me we're supposed to give them free reign to profit off of our identity?!
Ridiculous!
All that said, I am grateful to Senator Norman Jean-Baptiste for his time and openness. I have invited him to visit the blog and leave his comments for further follow-up. He said that he is definitely willing to shelve this legislation should it become apparent that the people are against it, but he simply wanted to take a "brave and courageous stance" to do something.
To close our conversation, I asked if he would be willing to at least open the legislation up to require competitive bidding. He said that he is "amenable to this" and would not mind doing so...that it was something he "can embrace."
Look at your power! You have the ability to shape legislation!
So, it is left for us to decide. We must decide if there is any form of this legislation that we find acceptable.
For myself, I don't agree. If they want a loan they should get it from a bank. And, if the banks (who are in business to make money) refuse a loan, why should government do differently? Or, is the Virgin Islands Government about to get into the business of profiting from entrepreneurial ventures and thus, reduce your taxes?
I still say: NO DEAL!
What do you say?
Answer the call: Virgin Islands for the Virgin Islanders...those at home and those abroad!
Posts
10 comments:
I think the money could be better spent doing an economic improvement program. I mean, there are so many small businesses that are folding because of increased power bills and landlord price gouging. Couldn't we use that money for grants for small businesses, the businesses that really make us a community?
Small business always makes an economy. Really, we are seeing (in the Federal gov't) what happens when we rely on Big Corporations.
Wow!
When will the madness stop?
When will officials care to do the right thing or something that makes sense?
Senator Baptiste appears to have the right spirit and I am grateful to that but why is the government lending $$ to corporations?
We all know the conditions of the schools, the hopelessness of our public education system, the languishing of many youths, the disrespectful nature of teacher's pay and so much more that suffocate our little islands.
The Tanzanian proverb: "How are the children?" For they know, their state tells much of the community.
Senator, do the sensible thing, stop facilitating corporate greed and the appearance of impropriety. When will real change come? Who will initiate the revolution of our minds that our people will someday be able to live with purpose and dignity.
humbly,
a sun of the V.I.
r. jalani horton
Having seen the preliminary information memorandum for Crucian Holdings, LLC, I can promise you, sir, that you are missing a few details that may answer a few of your *questions*. Job creation, revenue, economic stimulus for St. Croix are only a few benefits to this project. Comparing this to a $700 billion wall street bailout has got to be one of the more ridiculous things I've read in ages. Get your facts straight and get back to us...
So "Anonymous," are you suggesting that Senator Jean-Baptiste (the author of the legislation) doesn't have the facts straight? Because, he's where I got my information.
Job creation?! Did you do the math?! The median income in the VI is about $48K/annum. At $34 Million and 300 jobs, you're looking at more than $113K per job. Frankly, it would be better for our people if we took 300 people and gave them $75K!
Revenue? For whom? The owners! Do you realize that EDC benefits would give them 99% tax reduction? Add to that the insanely low tax rate (that event Senator Jean-Baptiste said the PFA should have given counter testimony to), and you have a ridiculous rape and pillage!
And, please explain the economic stimulus to St. Croix? I would love to hear that...
Their product will not be sold in the VI. And, being that they plan on using a "vertical integration" strategy, I highly doubt any local shipping companies will benefit - as Vertical Integration mandates that the COMPANY OWNS ALL ASPECTS of harvesting raw materials and getting them to market.
But, if I'm missing details (and if Senator Jean-Baptiste is missing them as well), please fill us in...
Truly, I'm interested in knowing - otherwise, I wouldn't have bothered contacting the author of this bill to find out the facts.
Refer to the comments made by Jalani, prior to yours. In speaking of benefit to the VI...please tell me how this proposal will address some (or any) of those concerns.
This is very interesting. Sounds like a president is being set for businesses to look to the local government to pay for start up cost etc. Does the VI Government have access to that kind of dollars to give to a for profit organization? Once started, where do you draw the line?
Still not understanding the repayment plan, if there is such a thing.
LJay...
Thanks for joining the discussion. There is no money - the PFA has said so. And, once we start you can't draw the line. We've seen that ourselves - in the VI - when you look at Jeffrey Prosser and Innovative and compare that to Crucian Holdings LLC. And, Nationally, we're feeling the brunt of that with these bailouts and buy offs.
And, even Senator Jean-Baptiste said there's no clear repayment plan.
We must stay aware and let as many people know as possible.
Please see detailed response of Crucian Holdings, LLC sent today to your email address.
Richard P. Bourne-Vanneck, Esq.
Manager-Member
Thanks for your comments, Sir! We are reviewing your memo and considering the best option to present your argument and engage the dialogue. VI Watch was formed to have this dialogue - not to simply espouse an agenda. Our only agenda is that which truly promotes and defends the Virgin Islands. If you are vindicated - so be it - we are happy. Yet, our readers will decide...
After reviewing the response from Crucian Holdings, LLC, I wanted to saw a few things.
First, we are sorry to hear that there were numerous inaccuracies in the reporting on this project. We analyzed the news as reported in both the VI Daily News and The Source. We went the additional step of questioning Senator Norman Jean-Baptiste for about an hour.
Neither the Senator nor the newspapers have informed us that we have misquoted them, so the inaccuracies cannot be due to our analysis.
Yet, I have posted the RESPONSE by Crucian Holdings, LLC for your own review.
But, I must question: why is it that the Senator promoting the bill did not know the things said in this response? Can it be that this information was not provided to Senator Jean-Baptiste? Or will Crucian Holdings say that the Senator neglected to truthfully answer my questions? What do you think?
Lastly, on behalf of many Virgin Islanders abroad, I do take offense that Attny. Bourne-Vanneck of Crucian Holdings has characterized Virgin Islanders in the states as having "chosen to live outside the Virgin Islands." I beg to differ: it is very few people that choose to leave the VI - never to return.
I believe it is this short-sighted view that keeps us stagnant. It is a view that ignores the impact of certain economic and social policies that prevent Virgin Islanders from returning to their beloved homeland.
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