The Devils and the Details

All the Devils Are Here
Every time our lawmakers convene in Richmond, I feel that the public is falling down the rabbit hole.

Lawmakers – with the public trying to stay abreast – chase the White Rabbit through corridors, into gardens and almost always get lost and confused.

 
There sits the Cheshire cat, the governor, smiling benevolently, yet wickedly, knowing he’s leaving in another 12 months, his legacy a budget for the next governor to massage.

There speaks the jabberwocky, the Speaker of the House.

In the garden, somewhere, lawmakers congregate, choose their Red Queen to off some heads and chase after another White Rabbit.

This time, it’s Joe Dorto, the CEO of Virginia International Terminals Inc., the Virginia Port Authority’s affiliate.

Off with his head, they say. He makes too much money. I think they’re envious.

Here are some tasty quotes.

In the private sector, “salaries, and particularly bonuses, aren’t done this way,” said Del. Joe May, R-Loudoun County. “Typically, when you have very good operating years, you receive substantial bonuses. And when you don’t have good operating years, you don’t.”

I guess Del. Loudoun missed the financial crisis on Wall Street when the financial Mandarins fled town with Brobdinagian bonuses. 
 
 I guess he missed the bonuses raked in by the royalty of the auto industry.

May’s bio lists him as a business owner.

He is also listed as a member of the Sons of Confederate Veterans.

Del. Jimmie Massie, a Republican representing Henrico County and a private equity investor, fired the second salvo.

“It’s not unsustainable as long as it has a gift of about $800 million in capital assets that the state of Virginia’s taxpayers are paying for to the tune of about $37 or $38 million a year,” Massie said. “Without that subsidy, they are not financially sustainable.” 


Here are some cold hard facts, sirs.

If not for Dorto securing 10-year contracts with all the shipping lines in the port prior to the opening of APM Terminals, APM would have taken that business from the state-owned ports in a heartbeat.

And where would the state be with empty terminals and millions in debt service – which, by the way, is paid by VIT on fees charged to the shipping lines.

Who pays for the VPA’s operating budget, including the salaries of four deputy directors and an executive director, the highest in the country?

VIT.

If not, the state and not VIT would be paying $40 million or more every year from the state’s budget.

Maybe this is political sniping is for a reason – to undermine Dorto and VIT to provide reasons to turn over the lease and operation of the port to a “bank” or a “foreign” entity

(Remember the brouhaha when DP World, an Arab-based company, bought the leases of another shipping line? You would have thought such a move, if allowed, would have violated the Constitution, created hotbeds of terrorist activity in middle America and ruined the soft and malleable minds of our teenagers.)

One more step, lawmakers.

While you’re at it, investigate the reasons behind paying four deputy directors of the VPA some of the highest salaries in the country.

Also question why a senior deputy director making close to $300,000 to basically sits on the sidelines and collect his salary, bonus and expense account.

Who, technically, is supposed to be running the VPA. But isn’t.

Keever, the VPA’s senior executive director, must be laughing all the way to the bank.

Feed your head, lawmakers. 

Breaking Bad

When the VPA began issuing combined VPA and VIT financial reports in the middle of the last decade, I thought this would backfire someday.

I think it has already.

The consultants, who were paid by tax dollars authorized by Gov Bob McDonnell and his Secretary of Transportation, Sean Connaughton, to evaluate the “port’s” financial position evaluated the dual financial reports issued by the VPA.

This is a mistake.

It’s perfectly acceptable by GAAP accounting standards. But it’s an accounting gimmick.

The VPA is a state agency.

The VPA should be evaluated on whether it’s over budget, under budget or right on the money.

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

VIT’s performance should be measured by revenues over costs and shouldn’t include depreciation or amortization, two gimmicks to show the impact of taxes on the company’s performance.

VIT doesn’t pay corporate income taxes or personal property taxes, so evaluate the organization on a more realistic yardstick.

But the public, lawmakers and consultants view the port in general terms.

Another mistake.