HUD Suspends Federal Funding for Virgin Islands Housing Authority
The Trump administration has halted federal funding for the Virgin Islands Housing Finance Authority (VIHFA), citing serious allegations of financial mismanagement, troubling audit findings, and criminal convictions of past executives involved in disaster recovery contracts overseen by the Department of Housing and Urban Development (HUD).
This suspension comes as HUD Secretary Scott Turner, part of the White House Anti-Fraud Task Force, ramps up scrutiny of federal grant recipients following numerous high-profile investigations nationwide.
Turner emphasized to Fox News Digital that the administration is committed to protecting taxpayer money. “We can’t let corrupt organizations mishandle billions anymore,” he stated. “VIHFA officials must prioritize supporting families over personal gain.” He also mentioned that HUD aims to be worthy stewards of the funds entrusted to them.
The suspension took effect immediately after Acting HUD Secretary Andrew Hughes communicated the agency’s findings in a letter to VIHFA official Dana Clendinen, warning of a ban on future federal contracts during the ongoing investigation.
A representative at VIHFA declined to comment when contacted, directing to a full voicemail box. Further attempts to reach out to VIHFA for a comment were made through their official contact page.
Efforts to obtain additional responses from Democratic Representative Stacey Plaskett and Governor Albert Bryan of the Virgin Islands were also initiated but remained pending.
Turner noted that nearly $2 billion had been allocated to VIHFA to aid reconstruction efforts following Hurricanes Irma and Maria in 2017, which translates to around $20,000 for each resident in the territory. Yet, almost nine years later, residents still lack promised housing and basic utilities due to ongoing mismanagement, characterized by inadequate infrastructure and lingering blue tarps as temporary roofing.
Audits have shown that recovery spending was notably delayed, with a significant portion of the funds misallocated for administrative costs. Moreover, the former COO was implicated in a corrupt scheme that hurt the agency’s internal controls.
Turner spotlighted the conviction of Darin Richardson, VIHFA’s former COO, who received a lengthy prison sentence for bank fraud and related issues. Prosecutors revealed he accepted over $100,000 in kickbacks from contractors. HUD’s letter indicated that the contract in question had been increased disproportionately, leading to wasted resources.
Additionally, reports indicated that VIHFA had failed repeatedly to provide truthful certifications about its internal financial controls and compliance with applicable laws. The agency attempted to overshadow its failures, yet HUD found substantial evidence of mishandling funds, lack of controls, and instances of fraudulent behaviors.
Despite receiving billions in disaster funds, audits highlighted a string of unresolved issues: a paltry completion rate for housing projects, and alarming discrepancies between high administrative expenditures and much lower investments into actual housing solutions for residents.
The HUD Inspector General was aware of potential misconduct but indicated VIHFA did not follow up on the information adequately. The oversight failures have left many questioning the integrity and competency of the housing authority.
With an official notice, VIHFA has 30 days to request a public hearing regarding the funding cut, or the decision will stand. This suspension represents a broader push by the federal government to combat fraud, stretching from substantial prosecutions in Minnesota to the U.S. Virgin Islands.
