Legislation would be devastating to the Virgin Islands

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by Dorothy R. Leavell

(NNPA) – Senator Robert Menendez of New Jersey has introduced legislation that would devastate America’s only African- American majority state or territory, the U.S. Virgin Islands. The territory’s economic development initiatives play by the rules Congress established, will strengthen the local government’s fiscal health and will keep jobs in the United States. We urge Menendez to reconsider his bill, which could force the Virgin Islands into economic ruin and was introduced to satisfy Puerto Rican demands.

Powerful Puerto Rican leaders are lobbying to overturn the Virgin Islands’ public-private partnerships with two rum makers, Diageo and Fortune Brands. The agreements invest in the territory’s rum industry for the next 30 years, growing rum-related local government revenue from $90 million to $240 million annually. Puerto Rico wants to see this money diverted from the Virgin Islands to its own coffers and is pressuring Congress to make it happen through a tax quirk.

We understand the politics involved and know that Puerto Ricans are influential. But there is no sugar coating the anti-Virgin Islands campaign: this is a Puerto Rican cash grab, clear and simple. After years of a “big brother”-“little brother” relationship, the smaller, less influential Virgin Islands now has made smart business decisions that will help it recover from the global recession. Puerto Rico is using its political heft and campaign dollars to try to push its little brother back down.

Congressman Don Payne, the Congressional Caribbean Caucus chairman and the first African-American to represent New Jersey in Congress, wrote to Menendez just days ago on the issue. He expressed concern about “unnecessarily punitive” legislation that could “create unnecessary havoc at a sensitive economic time.” Virgin Islanders need Payne, who understands the challenges faced by the United States’ Caribbean territories, to keep fighting for fairness. We hope others join him.

Diageo, whose contract to purchase Captain Morgan rum from a Puerto Rican rum maker expires in 2011, decided several years ago that it will leave Puerto Rico. Harming the Virgin Islands by blowing up the Diageo agreement will not bring the company back to Puerto Rico. But it might force Diageo to leave the United States and head to a foreign country, taking American union jobs and significant economic impact with it.

Menendez’s legislation would retroactively cap the Virgin Islands’ investments in local economic partnerships. That could unwind the deals, even with construction already begun, workers hired and bonds issued. The Virgin Islands’ Governor John deJongh has been clear that his territory’s economic stability is riding on these agreements. Numerous African-American members of Congress and business leaders agree. Will Menendez stop to listen? And if not, what is his plan to help the Virgin Islands replace the revenue lost if the deals are overturned?

The bill, named the “Reinvesting in U.S. Territories, Not Corporations Act,” won’t solve the economic problems in Puerto Rico, where Governor Luis Fortuno seems unable to prevent jobs from fleeing. And it will create decades of pain for the Virgin Islands just as it is poised to revive its economy. We think it should be called the “Un-American Act.”

The National Puerto Rican Coalition’s campaign against the Virgin Islands is infused with racial undertones. The group organized a national Hispanic boycott of Diageo and also is actively pressuring members of Congress of Hispanic background or with large Hispanic populations to attack the Virgin Islands.

A “black versus brown” economic war would be like quicksand. As the country struggles in the recession, the last thing we need is a fight between minority communities over economic issues. African Americans and Hispanics need every opportunity to head back to work, start or expand small businesses and get ahead as the recovery begins. That means uniting rather than letting special interests and lobbyists divide us.

If passed, Menendez’s bill would sacrifice the interests of Virgin Islands’ Black population to please Puerto Rico. Will he do the same in New Jersey, where the black and Hispanic populations are of roughly equal size? What about other states, or other industries, where African Americans are doing good things that could be undercut by damaging federal intervention.

Sen.  Menendez should listen to those warning of the consequences of retroactive legislation on the Virgin Islands’ economy. We strongly urge him to reconsider and are confident the Senate will see his bill for what it is: bad legislation.

Dorothy R. Leavell is chair of the NNPA Foundation.

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