Trump Administration Slams Virgin Islands Housing Authority: $1.3 Billion in Hurricane Aid Vanishes
The Trump administration has halted disaster recovery funding for the U.S. Virgin Islands' housing authority, claiming rampant financial mismanagement and fraud have allowed billions intended for hurricane recovery to remain largely unspent.
Housing Secretary Scott Turner announced the funding freeze following a Department of Housing and Urban Development investigation that uncovered "widespread financial mismanagement, inadequate fraud controls, false certifications and improper payments" at the Virgin Islands Housing Finance Authority. This investigation is still ongoing.
A July 20 letter from HUD revealed that the authority's failures have deprived Virgin Islanders of approximately $1.3 billion in aid that Congress approved.
On X, Turner accused officials of prioritizing "kickbacks over helping families recover from disasters."
HUD's findings indicate that over half of the disaster grant funding was squandered on administrative costs. The authority attempted to claim $6.2 million from HUD for expenses already covered by the Federal Emergency Management Agency and made minimal progress on essential rebuilding projects.
Out of 95 planned single-family rental rehabilitation projects, only two have been completed. None of the 329 planned single- and multifamily housing projects have advanced, and as of May, just 2% of the funds designated for electrical grid recovery had been utilized.
The department further criticized the authority as "an abysmal steward of taxpayer funds."
Turner pointed to the former chief operating officer of the housing authority, who oversaw disaster recovery programs and is currently serving a federal prison sentence for fraud and money laundering.
This former executive inflated a lumber contract from $3 million to $4.5 million, accepted a $107,000 kickback, and allowed the lumber to "rot in the sun, rendering it useless."
The housing authority has not responded to requests for comment and retains the right to appeal HUD's decision to suspend funding.
This funding freeze comes nearly nine years after Hurricanes Irma and Maria wreaked havoc on the U.S. territory in 2017. HUD reported that while the Virgin Islands received $1.9 billion in disaster recovery funding, only about $570 million has been spent—less than one-third of the total allocation.
Scrutiny of the housing authority has intensified in recent months. Its executive director resigned in February after lawmakers expressed concern over $4.2 million remaining unspent despite a September deadline.
"The Housing Finance Authority is not building," Sen. Kurt Vialet stated at the time. "You can't be upset at senators being frustrated."
