If you recall my last article about the “Rum Wars” in the Caribbean, you will then remember that the “Rum War” started over two years ago when Puerto Rico failed to negotiate a renewal of the Captain Morgan Rum production facilities with Diageo Spirits on their island Territory.  What transpired was a search by Diageo to find a new production location and started their search with Jamaica and Guatemala. When the United States Virgin Islands learned of Diageo changing production locations they jumped into the competition by having the USVI Governor John deJongh contact Diageo and propose they consider the USVI’s as their location on the island of St. Croix. The short story is Gov. deJongh and the USVI prevailed and signed an agreement two years ago to begin producing Captain Morgan Rum for the next 30 years.

So, at the end of 2009 Puerto Rico went into a panic because Gov. deJongh of the USVI was successful in having the USVI  now get the proceeds from the “rum cover-over tax” that is provided to the U.S. Territory who produces the rum.  We are talking about MILLIONS of dollars!  A political war began in Congress with friends of Puerto Rico proposing that the 100+ year old “rum cover-over tax” reserved for the island Territory that produced the rum be distributed by population in the Territories instead of to the specific island.  Puerto Rico has 4 million residents.  The USVI has 160,000. That would mean the USVI would produce the rum and the lions share of “rum cover-over tax” would go to Puerto Rico.  Fortunately, the bill has never made it to a vote so nothing has changed and at this point.  The USVI is proceeding with their Diageo contract and begin producing Captain Morgan.

A brand new chapter in the Rum War began this week. The lobby group for Puerto Rico, National Puerto Rico Coalition, has changed tactics and personally attacked key leaders in the USVI. Now it has become personal and the verbal exchanges have become quite vigorous. V.I. Delegate to Congress, Donna M. Christensen, on Thursday bitterly denounced the tactics being used by the National Puerto Rico Coalition (NPRC), accusing the group of willfully misrepresenting the truth in the latest round of the Rum Wars.

Here is what the lobbying group, NPRC, did. Earlier this week representatives of the NPRC held a press conference in Washington asking the Department of Justice and the Securities and Exchange Commission to investigate Christensen, Rep. Charles Rangel and Assistant Secretary of Interior Anthony Babauta to find out whether or not any of them stand to benefit from the territory’s public-private partnership with Diageo’s St. Croix production facility.

Her voice bristling with indignation, Christensen fired back, saying the Puerto Rico lobbying group has taken “a page out of the Republican playbook,” launching personal attacks on its adversaries when it can’t win an argument on its merits. “These charges are outrageous and unfounded and are nothing more than a desperate attempt to spread falsehoods and innuendo since their year-and-a-half campaign to derail legally binding agreements has failed miserably,” Christensen said.

Diageo had tried for over a year to negotiate an extension of its rum production agreement with Puerto Rico without success. “The suffering of the Puerto Rico citizens, the loss of jobs and dire economic conditions, that is on the watch of the leaders in Puerto Rico. The result of Diageo leaving Puerto Rico is their fault,” Christense said. “Diageo tried to negotiate a new contract … The blame is on Puerto Rico for not doing their job.” It appears that Puerto Rico is making a disparate attempt capture a portion of the “rum cover-over tax” that they will now loose because of their ineptness.  It seems similar to what one experienced in the third grade when someone got the ball you wanted to play with and you wanted it back – childish behavior.

In a written statement on Thursday, Diageo’s vice president for North America, Virginia Sánchez, expressed confidence in that Congress “will see that any changes made to existing cover-over program which may impact our agreement will be extremely harmful to the economy of the USVI today and in the future.” The Diageo representatives previously said “no member of the U.S. Congress had any kind of role in the negotiation or the approval” of the agreement with the V.I. government which extends for a period of 30 years.  Sánchez said that allegations that there were deals made in dark rooms are “pure fiction”. The Rum War is not over yet, but the USVI does seem to be ahead of Puerto Rico two to nill and we are in the third quarter of the match.  More to come.  Contact me anytime for information regarding the lifestyle happenings in the Caribbean.