Feds Freeze Future VIHFA Funds, Bryan to Appeal

M.A. Dworkin

USVI - In what could be one of the most shocking slaps-in-the-face from the federal government to the USVI, the Trump Administration has suspended the USVI’s Housing Finance Authority (VIHFA) from receiving further federal funding after the Department of Housing and Urban Development (HUD) disclosed in a letter that has accused the VIHFA of practicing years of alleged financial mismanagement, falsifying audit findings, along with the conviction of a former executive in a disaster recovery contracting scheme. 

“The Trump Administration is changing the game when it comes to who we entrust with taxpayer dollars,” said HUD Secretary Scott Turner, a member of the White House Task Force to Eliminate Fraud. “Organizations riddled with corruption, mismanagement and crime will no longer be allowed to squander billions.”

The suspension over alleged waste and abuse at the VIHFA comes as the Trump Administration has ramped up scrutiny of federal grant recipients following a series of high-profile investigations nationwide.

“VIHFA officials cannot be allowed to prioritize kickbacks over helping families recover from disasters,” Secretary Turner said. “I promised that HUD would be a faithful steward of the American people’s hard-earned money, and we are keeping that promise.”

Mr. Turner said the suspension is effective immediately and was spelled out in a 13-page letter to VIHFA official Dayna Clendinen laying out HUD’s findings and alerting the VIHFA that they are barred from future federal procurement while an investigation takes place.

The HUD complaint cites slow recovery from the 2017 Hurricanes, $52.6 million in administrative costs, incomplete housing and mitigation projects, weak fraud controls and Former Chief Operating Officer (COO) Darin Richardson’s conviction, who was sentenced in March 2026 to 36 months in prison after being convicted of bank fraud, money laundering, making false statements and criminal conflict of interest.

“Nine years later, because of VIHFA’s blatant mismanagement of these critical disaster funds, USVI citizens still do not have the housing and electrical power they were promised,” the HUD letter stated, pointing to the continued presence of blue-tarped roofs and deficiencies in the Territory’s infrastructure and electrical grid. The letter also stated that none of the 329 housing-work mitigation projects had been completed, along with an enormous gap between the amount VIHFA spent on Administration costs and the amount directed toward residents and their homes.

“Whether poor management or something worse, the consequences are unacceptable - the residents of the USVI who were devastated by disaster are not getting what they need from VIHFA,” HUD wrote. 

Governor Bryan has vowed an appeal of HUD’s decision.

“We’ll be appealing that, and then getting to the bottom of what exactly is generating these kinds of harsh motives in the Virgin Islands,” the Governor said, expressing surprise at the fact the Administration was not notified of the HUD action or notified a pending suspension was under consideration. 

The Governor described the reporting that first broke in Fox News, was somewhat sensationalized and questioned the timing of the announcement.

“It’s kind of a shock today to read a letter coming from an individual who I’ve never met, never had a conversation with, never got a warning letter,” Governor Bryan noted. 

He said many of the deficiencies identified in the inspector general’s report originated over two, and three years ago, and had since been addressed or corrected by VIHFA officials.

“There are a lot of protocols that have been put in place since then,” the Governor stated and cited inflation and the Territory’s already elevated construction costs as significant obstacles to completing recovery projects.

The Governor said the Administration would file an appeal during the 60-day allotted period. He also questioned why the action became public knowledge at the beginning of early voting and why it was initially reported by Fox News.

“I don’t know if this is a political stunt today due to the start of early voting, or some other action,” the Governor wondered. “Why does the press have it? Why does Fox News in particular have it, and why are we only hearing about this now?”

Governor Bryan promised to do “some real investigation into what is going on.”

In effect the VIHFA’s existing federal funds are not affected, but future procurements would be disallowed until the matter is settled one way or another.