The Trump administration has taken significant action against a U.S. territory's housing-finance authority, suspending further federal funding due to alleged financial mismanagement and corruption.
The move targets the Virgin Islands Housing Finance Authority (VIHFA) after the Department of Housing and Urban Development cited years of poor financial management, dire audit findings, and the conviction of a former executive in a disaster-recovery contracting scheme.
HUD Secretary Scott Turner, a member of the White House Task Force to Eliminate Fraud, announced the suspension as part of the administration's efforts to crack down on federal grant recipients.
"The Trump administration is changing the game when it comes to who we entrust with taxpayer dollars. Organizations riddled with corruption, mismanagement and crime will no longer be allowed to squander billions," Turner stated.
The suspension is effective immediately, and HUD's deputy Andrew Hughes has written a 13-page letter to VIHFA official Dayna Clendinen outlining the agency's findings and alerting them to the investigation.
Audit reports have raised significant concerns about funding-related activities, questioning millions in costs and uncovering weak financial controls, inadequate project oversight, poor fraud-risk management, and inaccurate reporting.
HUD has also cited the prevalence of blue-tarped roofs and shoddy infrastructure, including a teetering power grid, as evidence of VIHFA's mismanagement of disaster funds.
The agency claims that nearly $2 billion in federal funding was intended for recovery after Hurricanes Irma and Maria devastated the Virgin Islands in 2017 – but nine years later, residents still do not have the housing and electrical power they were promised.
The suspension marks the latest front in the government's anti-fraud campaign, which has targeted high-profile investigations nationwide.
VIHFA will have 30 days to request a hearing on the matter or the funding suspension will be final, according to Andrew Hughes.
