ST. CROIX — Three new rum companies that desired doing business in the territory through new rum distilleries were turned away by Governor Kenneth Mapp, said the governor’s senior policy advisory, Frankie Johnson, above left, on Friday.
The stunning revelation comes at a time when Mr. Mapp could least afford a faux pas, and was made on the popular Mario Moorhead radio program on 103.5 F.M. The Reef, when gubernatorial candidate Albert Bryan was relaying his plans for the territory to the listening audience.
Mr. Johnson called the show while Mr. Bryan was speaking about his ideas for the Government Employees’ Retirement System (G.E.R.S.), which includes an attempt to attract new rum companies to the territory and use dollars generated through the deals to shore up the pension system. Mr. Johnson contended that the Diageo agreement was a bad one that saw the local government giving away too many incentives.
Most of the rum cover-over funds go directly to the territory’s bondholders, with Mr. Mapp revealing last year that the September 2017 payment, which stood at $223 million, saw $175 million being paid to the territory’s debtees. Of the remaining $48 million, $18 million went to the government’s general fund, and the remainder to Cruzan Rum and Diageo for promotional fees and molasses subsidies, as per the 2007 agreement.
The Diego agreement, which has a lifespan of 30 years, has been derided by the Mapp administration as a prime example of a terrible deal, and Mr. Johnson attempted to enforce that argument on Friday.
But Mr. Johnson stumbled on a rebuttal from Mr. Bryan, and then revealed that the governor had rejected three rum companies during his tenure.
Mr. Bryan, smelling blood, pounced.
“If we’re saying that the governor had three offers to build distilleries here that’s shame on him. We had offers to build three distilleries in the Virgin Islands; that would have fixed our retirement system overnight,” Mr. Bryan said. He added that even if the agreements with each of the rum companies resulted in $20 million per deal to the government, “that’s $60 million for the Virgin Islands. You can’t lose what you don’t have.”
“If you have zero now and people are bringing $60 million, that’s $60 million more. That would have fixed our system, and that’s exactly why you need to change course, because you’re hearing from the governor’s special assistant telling you that three distilleries, not one, not two, three distilleries knocked on our door and he told them no. That’s not a good thing; I don’t know if we should applaud that. I mean that’s quite shocking from my perspective,” Mr. Bryan said.
The revelation by Mr. Johnson places the governor in a tough spot. Mr. Mapp will now have to field questions from reporters relative to Mr. Johnson’s remarks, while attempting to explain why he turned down the firms — and even why the community wasn’t made aware of the developments so that they could have had some input.
And with G.E.R.S. facing collapse in 2023 with debt hovering at $5 billion, this revelation provides ample ammunition for opponents of the current administration to paint it as ill-equipped to run the government’s affairs.
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