State of Siege

Layer after layer of intrigue dogs the dust up between Secretary of Transportation, Sean Connaughton, and Joe Dorto, president and CEO of Virginia International Inc. the manager of the state-owned marine terminals. 

Strip away the façade of consultant reports, cash flow statements and the ridiculous microscopic minutiae of amortization and depreciation.

What do you get?

Whether this a clash between a soon-to-be-departing Administration seeking to bolster its street credentials, on one hand, or a personal vendetta, on the other hand, is for readers to decide.

But here are some cold hard facts.

VIT is a non-stock, non-profit company.

The key word here is “non-profit.”

VIT pays no federal or state corporate income taxes or personal property taxes.

VIT finances the VPA’s budget from terminal revenue, which includes overseas offices and consultants. 

VIT pays the debt service on cranes and equipment.

VIT pays for the odd assortment of subsidies to offset higher costs. 

Should APM Terminals or JP Morgan Chase (note that JP Morgan is an underwriter of the $293.4 million in bonds to construct and design Rt. 460) win the bid to operate the port, will they finance the VPA’s budget and pay the debt service on the cranes and equipment?

Or will the state have to pick up the tab?

VIT is set up like the Rt. 460 Funding Corporation of Virginia, a quasi-government entity to manage the future, four-lane highway between Suffolk and Petersburg, a project costing $1.5 billion, most of which the state will finance.

It is a non-stock, non-profit corporation, as well.

Connaughton and the 11-member Virginia Port Authority board of commissioners have hired six consultants (at state expense) to discredit VIT’s balance sheet, economic impact and so on and so forth.

Six consultants. 

The economist James Koch: to challenge the port’s economic impact on the state.

The shipping experts: Drewry Consultants to attack the long-term “sustainability” of VIT’s financial performance. 

The number crunchers:  financial services firm, PFM, and KPMG, to provide business management services.

And last but not least: the sweet singers of spin, two public relations companies, Virginia Beach-based Rubin Communications and Powell Tate, a Washington, D.C. firm,

To keep stakeholders informed.

To solicit feedback and input.

For $15,000 a month for four months.

Two footnotes.

In retrospect, VIT may have fed some of this frenzy by insisting for years that it’s a private company.

And where’s Jeff Keever, the VPA’s deputy director? You would have thought he would have served as the interim executive director instead of Rodney Oliver, the VPA’s director of finance?