Washington - The Maryland Comptroller's Office is examining whether VantageKnight President Manuel "Manny" Ortiz has complied with his tax obligations in that state.
The inquiry began after New Progressive Party Representative José Enrique "Quiquito" Meléndez asked to investigate whether the former government lobbyist used tax benefits in Puerto Rico to evade responsibilities in the U.S.
In a letter dated August 19, Comptroller's Compliance Division Manager Barbara Esker notified Meléndez that they would examine this matter to determine whether Ortiz meets the requirements of his tax return in the state of Maryland.
Esker warned the New Progressive Party (PNP) lawmaker that due to privacy regulations, the results of the evaluation will not be disclosed.
Last month, Meléndez asked the Puerto Rican government to investigate whether Ortiz failed to comply with the requirements of Law 20-2012, which allows a company to pay only a 4 percent tax for work done and income earned on the island.
He also asked the U.S. Internal Revenue Service (IRS) and the state of Maryland to find out if Ortiz evaded federal taxes.
The first answer Meléndez received was from the Maryland Comptroller's Office, which handles the state's tax matters, however, the Economic Development and Commerce Secretary and executive director of the Industrial Development Company (PRIDCO) on the island, Manuel Laboy, said publicly he will investigate whether VantageKnight, which was his contractor, abides by the rules regarding Law 20.
"We have no information on what happened to that investigation in Puerto Rico. The Tax decree should be canceled," Meléndez said, revealing the letter from the Maryland Comptroller's Office.
He said he is still waiting for an official response from the IRS, PRIDCO, and the Puerto Rico Treasury Department. "There is an open investigation in Maryland. It is appropriate to complete the investigations here. Those people (in Maryland) are going to ask for evidence," he added.
Ortiz, who is close to the Rosselló family and has a long career in Washington D.C. as a Democratic consultant, was a lobbyist for the government of Ricardo Rosselló Nevares, through PRIDCO, up until June.
He had contracts with that public entity for a total $1.6 million between the beginning of 2017 and last June.
In addition to the working for PRIDCO, last fiscal year, Ortiz reported to Congress income and expenses valued at about $2 million for lobbying efforts for private companies and the oil company CITGO, a subsidiary of the Venezuelan state-owned company Petróleos de Venezuela (PDVSA).
Neither lobbying for PRIDCO or private clients in Washington are included in the benefits of Law 20.
According to the statute, VantageKnight could have only applied to tax benefits in Puerto Rico for the work on the island.
VantageKnight, based in Washington, D.C., registered a subsidiary in Puerto Rico whose address is a property in Dorado that belongs to Ortiz.
Ortiz, whose family lives in Maryland, said a few months ago that he has an address in Puerto Rico to benefit from Law 20.
According to Laboy, VantageKnight in February 2018 received a tax decree under Law 20 to export consulting services.
In an August 13 statement, when Meléndez filed his complaints -after El Nuevo Día reports-, Ortiz said his company had complied with all the requirements of Law 20-2012 and with tax obligations at the state and federal level.
Espacios Abiertos (Open Spaces) a pro-transparency organization, has questioned the secrecy surrounding tax decrees, which prevents the public and the press from overseeing them.
It has also questioned that VantageKnight had a contract with PRIDCO at the time it obtained Law 20 benefits.
According to experts, unlike Law 22-2012, Law 20 does not require the beneficiary to be in Puerto Rico most of the year, but it does not allow "shell corporations."