It was the fight the U.S. Virgin Islands could never win.

For two decades, the tropical U.S. territory’s top officials pushed to overturn an obscure regulation that limited the number of passengers on uninspected commercial charter boats to six. The regulation cost the islands hundreds of millions of dollars in tourism revenue and boosted the economy of its neighbor, the British Virgin Islands.


In 2014, the territory finally found a friend in Washington: House Transportation and Infrastructure Chairman Bill Shuster. The Pennsylvania Republican championed a provision that doubled the number of passengers permitted to be on board. That same month, Shuster hosted a fundraiser and collected more than $33,000 in campaign contributions from Virgin Islands donors who had never given to him before. Several of the donors told POLITICO they donated to Shuster specifically because he worked to change the regulation.

Nearly everyone involved in the process credits Shuster, who owns a timeshare in the Virgin Islands, with securing the change.

“He was instrumental in making that deal happen,” said Pash Daswani, president of Lucky Jewelers and head of the India Association of the Virgin Islands. Daswani attended a meet-and-greet with Shuster and former Virgin Islands Gov. John de Jongh in 2013 at which the need for changes to the so-called six-pack rule was discussed. Just days after the bill passed the House, Daswani gave Shuster $500.

Policymakers frequently raise money from individuals and corporations who have vested interests before Congress. But Shuster’s initiative in taking up such a parochial issue — the relaxing of the rule affected only the U.S. Virgin Islands’ situation — and the specificity with which donors connected their contributions to his work make this case unusual.

“[Shuster] came down to the Virgin Islands and gave a talk” about the boat regulation, said Steve Lammens, who cut a $1,000 check to the congressman, his first contribution to a federal candidate. “That was it. A one-time deal.”

Lammens said he “was given information” that Shuster’s panel had authority over the six-pack rule.

Noah Bookbinder, president of the liberal Citizens for Responsibility and Ethics in Washington, said the case appears to be “a naked example of policy being made because there is money there.”

“It does seem like a fairly stark example of an official being influenced by something other than what is in his constituents’ interest and what’s in the public interest,” said Bookbinder, whose group initially raised questions about the contributions and legislation to POLITICO.

Shuster’s spokesman, Casey Contres, said the Pennsylvania lawmaker’s fundraising is not linked to his work on legislation.

Royal Caribbean International's Explorer of the Seas is docked at Charlotte Amalie Harbor in St. Thomas, U. S. Virgin Islands. | AP Photo

“To assert otherwise is simply not the truth,” Contres said in a statement. “He raised money for his leadership PAC in the (U.S. Virgin Islands) which helps support and maintain our Republican majority. He is always grateful to those supporters from Pennsylvania’s 9th congressional district and across the country who believe in his vision for ensuring that the federal government maintains its role in the transportation and infrastructure needs of the country.”

Contres added that while Shuster often travels to the Virgin Islands with his family for a one-week vacation, he does not have a financial interest in the maritime industry there and doesn’t personally benefit from the legislation.

Shuster did not work alone on the boating rule. Rep. Duncan Hunter (R-Calif.), who chairs the maritime subcommittee, supported the provision. And Shuster had a willing partner in former Sen. Jay Rockefeller (D-W.Va.), who also vacations on the island. Rockefeller, who left the Senate in January, had not received any contributions from Virgin Islands residents since 2011. Hunter has not received any campaign money from island residents during his six years in Congress.

That powerful partnership — Shuster and Rockefeller — helped break a legislative logjam that stymied former Virgin Islands Del. Donna Christensen during her entire 18 years in Congress. She spent years lobbying officials at the Coast Guard and the Department of Homeland Security and introduced legislation to solve the problem. All of those efforts went nowhere.

“It took having two people who were willing to work with us and just get it done,” Christensen said. “What made the difference was concentrating on Congress and having two members — one in the House and one in the Senate — who were familiar with the Virgin Islands and [who] understood the issue.”

Shuster, who heads one of the most powerful committees in Congress, has come under increased scrutiny in recent months. He is dating a top airline industry lobbyist and moved legislation last year that was a top priority of the commercial airline industry. He is currently working on sweeping legislation to overhaul the Federal Aviation Administration and renew authorization for billions of dollars in highway spending.

Shuster has not recused himself from aviation legislation, despite his relationship with a vice president of Airlines for America, a lobbying group that represents all of the U.S. legacy carriers. Republican leaders have stood by Shuster.

The six-pack rule Shuster helped to tweak dates back two decades. Part of the Passenger Vessel Safety Act of 1993, it was intended to reduce boating casualties, improve enforcement programs and put in place monetary damages for violations. The Department of Homeland Security, which oversees the Coast Guard, sent a letter to Rockefeller after the House bill passed last year, citing concerns about passenger and vessel safety if the new rule was included in the final version of the bill, according to news reports.

After it went into effect in the 1990s, the rule had the unintended consequence of benefiting the British Virgin Islands, which did not have a similar law. The maritime industry accounted for $100 million to $130 million in revenue for the territory’s treasury, but that’s fallen to about $30 million since the rule’s implementation, according to the U.S. Virgin Islands Department of Tourism. The department estimates the territory has lost $2 billion in revenue since the six-pack rule went into effect.

Shuster first started meeting with Virgin Islands officials about the boating regulation in late 2013, holding a meet-and-greet event.

Around that time, Shuster’s campaign account, the Bill Shuster Victory Committee, spent more than $4,000 in the Virgin Islands. He paid for lodging at the Frenchman’s Reef Marriott and food at the Grande Cru Restaurant and Wine Bar. Also listed on his campaign disclosure reports is $1,000 to a luxury boat company, Just Because Luxury Charters.

His activities in the Virgin Islands then do not appear to have resulted in a windfall of donations: The only company to contribute to Shuster’s joint victory committee during that period was alcoholic beverage company Diageo, according to disclosure reports.

At the same time, Virgin Island officials and their hired D.C. lobbyists were working hard to make sure key members of Congress would fall in line to support boosting to 12 the number of passengers permitted on uninspected yachts. The Virgin Islands had their longtime lobbyist, Kevin Callwood of Callwood Associates, working the issue. The territory added Patrick Robertson of FTI Consulting, a onetime deputy chief of staff to Rockefeller, to lobby specifically on the rule.

On Feb. 6, 2014, Hunter introduced the Coast Guard and Maritime Transportation Act of 2014. Section 319 of the bill included a provision to allow 12 passengers on uninspected boats that dock in the Virgin Islands.

That same day, then-Del. Christensen sent a letter to Shuster thanking him for taking up the cause.

“It is something I have tried to get done with the Coast Guard for years and I very much appreciate your willingness to do this,” she wrote.

Two months later, Christensen went to the House floor and praised Shuster — among others — for his work on the issue.

“I can honestly say it is only because of their efforts and the support of Chairman Shuster and ranking member [Nick] Rahall that we are on the cusp of finally resolving the issue,” she said. Then-Virgin Islands Gov. John de Jongh also traveled to Washington in September to thank the Pennsylvania Republican in person.

And Hunter lauded Shuster’s work on the bill when it passed the House. “Chairman Shuster’s leadership was essential to making this bill possible,” Hunter said in a statement.

The provision was tucked into legislation that became known as the Howard Coble Coast Guard and Maritime Transportation Act of 2014. It passed Congress on Dec. 10 and was signed into law a week later.

Shuster returned to the Virgin Islands that month. His fundraising invitation for the Dec. 5 event did not mention the six-pack rule — though it did note his position on the Transportation Committee. His spokesman said that donors’ “intent does not equate to his intent. There was no nexus whatsoever behind PAC contributions and any official action taken.”

He raised $33,500 that month from Virgin Islands donors. That month Shuster’s Bill PAC account took in $75,500. Many of the Virgin Island contributors — businessmen, lawyers and developers — had previously given to Democrats as well as Republicans.

Peter Corr, who runs a private equity company in the Virgin Islands, said he found Shuster to be “incredibly pragmatic” and a “man of action” when it came to the charter boat rule.

There are other issues that he hopes Shuster can help the island with — more visas for sailors coming for regattas, for example. He contributed $1,000 to Shuster.

“He’s taken an interest in [the Virgin Islands] because he realizes that if the islands do really well … it’s better for the United States,” Corr said.