Puerto Rico official: No current contracts with VantageKnight
Lawmaker alleges former gov’s lobbyist violating tax decree
SAN JUAN — Puerto Rico Economic Development Secretary Manuel Laboy reacted to denouncements by a lawmaker regarding tax credits awarded to VantageKnight, a consulting and advisory services firm that specializes in public relations and legislative and regulatory affairs.
On Monday, New Progressive Party (NPP) Rep. José “Quiquito” Meléndez said he had referred an alleged scheme by the lobbying firm’s founder, Manuel “Manny” Ortiz, to the U.S. Attorney’s Office in Puerto Rico, the Internal Revenue Service and to Gov. Wanda Vázquez.
“Information has been received that attorney Manny Ortiz has an Act 20 decree…,” Meléndez said. “This person is not a Puerto Rico resident and doesn’t comply with the Act 20 requirements.”
Under Act 20, for export services, tax incentives such as a 4% corporate tax rate and a full tax exemption on dividends from export services are granted when becoming a bona fide resident.
In a statement Tuesday, Laboy said VantageKnight does enjoy investor benefits under Act 20 but “doesn’t have any contracts with the DDEC [Spanish acronym for Economic Development & Commerce Department] or with the [Puerto Rico] Industrial Development Co. [Pridco]” and that “it is not in the process of renovating [contracts], as has been asserted.”
Ortiz later tweeted that VantageKnight complies with all the stipulations of the tax decree.
“The operations meet all the requirements that this statute demands, and the entity has met each and every one of the obligations demanded by the act in Puerto Rico or at a federal level,” Ortiz said. “As a professional, I demand future declarations carried out in an irresponsible manner and solely seeking to attack my persona be avoided.”
Meléndez stressed the VantageKnight was established in Florida, operates from offices in Washington, D.C., and that the Puerto Rico State Department Registry of Corporations “indicates that its offices are located in a residence in Dorado.”
The lawmaker said VantageKnight has a nearly $700,000 a year contract with DDEC to lobby on behalf of the government of Puerto Rico and has billed Pridco about $1.6 million during the past two and a half years.
“Corruption is corruption. I have been making complaints against this man before because his relationship with Venezuela and with the Citgo oil company has been singled out,” the lawmaker replied Monday when asked by Caribbean Business why he was making the allegations now. “He is claiming that his business headquarters are in Puerto Rico, but the documents that his company files say otherwise. I think it would be fair for the governor to order everything investigated.”
Meléndez wrote to the governor, saying that “the Department of the Treasury and the DDEC should investigate whether said company and its owner are committing tax evasion crimes that are not only squandering hundreds of thousands of dollars of the Treasury of Puerto Rico but putting at risk the very existence of the mechanisms of acts 20-2012 and 22-2012 if it is determined that a person so close to our past governor and with large contracts representing the Government of Puerto Rico in the Federal Capital is abusing the benefits said laws provide to bona fide investors who fully comply with the requirements of these laws and generate jobs and significant economic activity on our islands.”
He also told the media that he would soon introduce a resolution in the House of Representatives to have the process of granting contracts under acts 20 and 22 investigated.
—Limarys Suárez and María Miranda contributed to this report.