On Monday, Gov. Albert Bryan Jr. announced a $6 million settlement with Pafford Medical Services and expressed support for more than $22 million in retroactive pay, as the 36th Legislature weighed tapping into the Jeffrey Epstein-related settlement funds to cover urgent expenses and government arrears.
“It was real heartening to kind of huddle at Seatrade with members of the Legislature and quickly hash out some of the issues that we have before us, and we find that we generally tend to agree more than we disagree,” he said. “And even in the things we disagree with — we’re all adults. We should be able to disagree better.”
The government initially contracted Pafford in the wake of hurricanes Irma and Maria, and the company continued bolstering the territory’s health care infrastructure through the COVID-19 pandemic and beyond. Rumors that the company might pull out of the territory swirled in May 2023 amid reports that the government owed the company $34 million. Health Commissioner Justa Encarnacion told the Source at the time that the delayed payments were caused by an internal audit process triggered by the use of federal funds.
Pafford announced last August that it would cease all of its operations in the U.S. Virgin Islands, citing $10 million in unpaid bills. While lauding Pafford’s contribution to health care in the territory, government officials mostly shrugged in response to the departure.
“At the end of the day, the ambulances will run in an emergency and patients who need critical care will have access to that care,” Government House Communications Director Richard Motta Jr. told the Source at the time.
Later that month, the government paid Pafford $2.5 million — largely to cover services the company rendered to the Caribbean Kidney Center during the 2024 fiscal year.
On Monday, Bryan said the agreement was important because “it not only resolves the obligation, but it also saves our government — and, ultimately, you taxpayers — nearly $2 million to be negotiated off of this settlement.” Bryan said.
“So it’s a savings for us, and … I really feel good about paying, because Pafford was there when we really needed them most, and we really wanted to pay them within the money that we have,” he said.
The bill lawmakers passed Monday night also freed up $22.5 million in Epstein settlement money to pay retroactive wages owed to survivors of deceased retired government employees, retired government employees and active government employees by no later than May 30.
The Legislature’s most recent attempt at paying out retroactive wages came in late 2023 in the form of a supplemental budget bill. Lawmakers were dismayed the following January to learn that of the $25 million they appropriated, only $2.5 million had been paid out. The rest of those funds were used to cover government payroll costs.
Following a Senate Finance Committee hearing in February, Sen. Novelle Francis Jr., who chairs the committee, told the Source that the 36th Legislature was determined to make sure funds earmarked for retro pay get where they’re supposed to go.
“And we’re prepared to go to court if necessary,” he said at the time. “I think that the community has been more than patient in us being able to make good on this retro pay, and it’s — in all fairness — it’s due to them.”
Bryan has continually maintained that an appropriation by the Legislature means only that money will be spent if and when there’s money to spend.
“They created an obligation,” he said Monday. “An obligation is just a promise to pay if we have the money. We never had the money.”
Asked what’s different about the territory’s finances this time around, Bryan said it wasn’t about finances and noted that “there’s $130 million — cash — that we have in the bank because of the Epstein cases.”
The settlement agreements require that portions of the funds be spent on specific initiatives, and the 35th Legislature carved out other appropriations toward the end of the most recent budget cycle in September. Bryan has also long appeared rankled by a stipulation stating that the central government can’t tap into the funds during states of emergency. When Sen. Ray Fonseca, who chairs the Senate Health Committee, called for a state of emergency over the territory’s ailing hospitals in January, Bryan all but scoffed at the idea during an interview with the Source.
“Imagine a senator calling for a state of emergency after the Senate voted to not allow the governor of the Virgin Islands to touch any of the Epstein money in a state — for any reason — even in a state of emergency,” he said at the time. “You know, I think what he’s saying is there needs to be concern, alarm, but a state of emergency is a declaration that would allow me to use any existing funding to help the situation.”
Despite safeguards implemented by the 35th Legislature, the central government did previously tap into the Epstein funds. Finance Commissioner Kevin McCurdy acknowledged during the February Finance Committee hearing that the government used $33.6 million in settlement funds to pay vendors. Amid prodding from lawmakers, McCurdy determinedly avoided getting into specifics.
“Senator,” he said in response to questions from Sen. Alma Francis Heyliger, “what I am saying is: $33 million was spent for operations of the General Fund. That’s all I’m saying. I’m not saying anything else.”
Asked during Monday’s briefing how the government can avoid burning through the settlement money amid loosening restrictions, Bryan said the executive branch is looking at “prioritization, leadership and choices, to make sure that doesn’t happen.”
“We have a lot of money that I’m not going to cast out just thinking, ‘because I only have a year and a half left,’” he said. “We’re actually doing the kind of planning that makes sure, that ensures that the Virgin Islands have stability. Now, when the next person comes, I don’t know. But for us — if you look at the last six and a half years of the Bryan-Roach administration — we have been very fiscally prudent, we have managed our finances, we have taken care of the retirement piece, and we have been able to do a lot of projects that would have never, ever happened by creating trust with our D.C. partners — even now with the Trump administration. We have a great relationship. They call us to find out if we need anything, and I think that’s a step in the right direction.”
