In response to our post about the booze bailout London-based Diageo is getting, the Governor of the US Virgin Islands, John DeJongh sent us this:
Your story, “British distiller gets billions for rum,” fundamentally misstates the law that supports the partnership between the U.S. Virgin Islands and Diageo. The revenue generated by this partnership is, by U.S. law, tax revenue of the Virgin Islands. It has helped us stabilise our current financial position due to the recession, address our pension deficit, and build roads and schools. This partnership is sanctioned by a Congressionally approved program that is not a “special tax”, but a fundamental part of the financial relationship between the U.S. and its territorial possessions; extended to the USVI in 1954. For Puerto Rico to cry foul as they continue to subsidise their rum companies under the same program, one that they have benefited from since 1917, is disingenuous. They were prepared to let Diageo take its production of rum destined for the U.S. market out of the United States. We were not. We are proud that Diageo will produce its rum on St Croix and pleased that this will generate great benefits to the people of the U.S. Virgin Islands for many years to come.
John P. deJongh, Jr