Puerto Rico Must Open Books on Secret Rum Subsidies, Says Letter From Black Chamber of Commerce to Gov. Fortuno

Governor Must Address Rumored Puerto Rico Payments to Rum Companies by Releasing Contracts, Financial Information

Alleged Hidden Payments Mislead Citizens and Lawmakers; Payments from General Fund Exceed Self-Imposed Cap

WASHINGTON, Feb. 24 /PRNewswire-USNewswire/ -- In a letter to Puerto Rico Governor Luis Fortuno, National Black Chamber of Commerce President and CEO Harry Alford today called upon him to disclose his territory's direct and indirect payments and subsidies to its rum companies.

In the letter, Alford insisted Puerto Rico reveal all funding provided to its rum companies via formal and informal channels. That includes funding through the rum excise tax cover-over program, direct payments, indirect subsidies and allocations from the Puerto Rico general fund or other sources.

"I am concerned that Puerto Rican officials are misleading their citizens. It seems they are using money from their general fund to skirt their self-imposed cap on subsidies and provide significant, unreported payments to the island's rum makers," said Alford. "Governor Fortuno must publicly disclose his territory's financial statements and contracts with Bacardi, Destileria Serralles and other companies that already receive millions of Puerto Rico's dollars."

The Congressional Research Service recently reviewed the U.S. territories' rum investments. On Puerto Rico's subsidies, CRS reported: "The exact amounts and extent of these activities is unclear as there is not separate publicly available budget accounting."

Puerto Rican leaders, including Governor Fortuno, and their allies and lobbyists, have waged a smear campaign against two public-private partnerships secured by the U.S. Virgin Islands (USVI). They seek to retroactively undo the African American-majority territory's innovative agreements with Diageo and Fortune Brands. The USVI's agreements follow the territory's commitment to transparency, having been publicly vetted by the USVI Legislature and released online by Governor John deJongh.

"The hypocrisy and lies must stop now. It is time for Puerto Rico to open the books on its own rum subsidies before the residents of the Virgin Islands fall victim to Puerto Rico's harsh campaign," said Alford. "Puerto Rico's alleged scheme of secret payments allows their rum companies to get richer. But they won't be satisfied until they force Diageo out of the USVI. This is backroom dealing at its worst and most anti-American."

Full text of Alford's letter to Fortuno follows:

February 24, 2010

The Honorable Luis Fortuno

Commonwealth of Puerto Rico

La Fortaleza

Calle Fortaleza

San Juan, Puerto Rico 00901

Dear Governor Fortuno:

I am writing to express serious concerns about the troubling lack of transparency surrounding the Puerto Rico government's support for its rum industry. I urge you to release your rum industry contracts, to be transparent about payments to rum companies and to open your books – as the U.S. Virgin Islands (USVI) has done.  

As you and other Puerto Rican leaders and allies wage an attack campaign against the USVI and its legitimate, innovative economic development agreements, now is the time for Puerto Rico to disclose all direct and indirect payments to and relationships with its rum makers. This includes payments from cover-over revenue, the Puerto Rico government's general fund and other sources.

We have all heard rumors about discreet payments and indirect benefits to Puerto Rican rum companies and additional monies coming from the general fund to rum manufacturers – outside the cover-over program. I am concerned about these hidden government subsidies, which are not accounted for and are not publicly disclosed. This is in addition to the direct benefits collected from the Rums of Puerto Rico promotional agency. Now is your chance to do the right thing, to be transparent and to prove the rumors wrong.

Puerto Rico has a lengthy history of subsidizing its rum companies. This includes Bermuda-headquartered Bacardi Limited, the world's largest rum maker and a powerful multi-billion dollar company, as well as Destileria Serralles, maker of one of Puerto Rico's most popular rum brands. Both companies, which are high-profile enterprises with strong sales and healthy financial standing, are participants in the misinformation campaign against the USVI.

Transparency is the hallmark of business and good governance. In the spirit of collaboration between government and business, I respectfully ask you to provide full information on Puerto Rico's direct and indirect financial support for its rum industry – including the contracts with Bacardi – released on your government's Web site and sent to the relevant members of Congress. I ask you to do this by March 5, 2010.  

The USVI's commitment to open government is evident in the process for establishing its long-term public-private partnerships with two rum makers. The government's agreements with Diageo and Fortune Brands were publicly released by Governor John deJongh. They received full vetting and approval by the USVI Legislature. The agreements are available on Governor deJongh's official Web site. The USVI has nothing to hide.

The Puerto Rico campaign against the USVI continues to hide the fact that Puerto Rico, along with its corporate allies and their lobbyists and front groups like the National Puerto Rican Coalition, is actively working to retroactively undo the USVI's agreements. Should that happen, Diageo would be forced to leave the United States. This is the scenario that Puerto Rico desires and that clearly benefits Puerto Rico, which would receive tens of millions of dollars in rum excise tax cover-over revenue should Diageo relocate to a country included in the Caribbean Basin Initiative. I am gravely concerned that Puerto Rico's leaders are pursuing dangerous federal legislation in order to compel a company to leave America for the territory's own selfish benefit. That's unpatriotic and bad for the American economy.

Across the nation, citizens are issuing calls for improved government transparency. I respectfully but strongly urge you, as the Governor of Puerto Rico, to show your leadership on this issue by releasing the contracts, payments and any other relevant information by March 5, 2010.

Sincerely,

Harry C. Alford

President and CEO

National Black Chamber of Commerce®

SOURCE National Black Chamber of Commerce