Editor’s Note: This is a developing story. The Source will provide updates as more information becomes available.
Gov. Albert Bryan Jr. acknowledged the territory’s receipt of a letter from the U.S. Housing and Urban Development Department Monday in which the federal government announced a suspension of future disaster recovery funding to the V.I. Housing Finance Authority due to years of financial mismanagement, dismal audit findings and a former chief executive’s kickback-related conviction.
Referring to the letter during a Government House press briefing Monday as both a “very serious allegation” and “an overreach,” Bryan initially suggested that HUD’s funding freeze was based on reports by the department’s inspector general that were “completed over two, three years ago — where they identified some of those weaknesses.”
“And those have been addressed or corrected,” he said.
The most recent HUD audit was released in April. It rated the semiautonomous agency’s fraud management capacity “at or below the lowest desired goal state … because some anti-fraud activities were disorganized, uncontrolled, and reactive, while other anti-fraud activities expected in a fraud risk management program were absent altogether.”
In March 2025, former VIHFA chief operating officer Darin Richardson was convicted of crimes including criminal conflict of interest related to a HUD-funded contract to manage disaster recovery lumber. A subsequent chief operating officer, Stephanie Berry, sued the agency and its leadership in 2024 while alleging that the VIHFA “will stand to lose millions of dollars through recapturing of federal funds due to noncompliance with policies and procedures.” Berry’s wrongful termination lawsuit argued that federally funded projects are at a standstill because of the VIHFA’s leadership. The case is ongoing, with a hearing set for July 30 in V.I. Superior Court on St. Croix.
On Monday, Fox News reported that HUD Deputy Secretary Andrew Hughes sent a 13-page letter to VIHFA executive Dayna Clendinen alerting her to the funding suspension and accusing the agency of “blatant mismanagement of these critical disaster funds,” according to the outlet’s reporting.
“It seems very sensationalized,” Bryan said Monday after noting that he hasn’t met with officials from HUD or the Federal Emergency Management Agency during his recent visits to Washington, D.C. “because we don’t have any problems.”
“When you read the letter — to the tone of the letter — and you know it’s very unprofessional,” he said, wondering aloud if the action was some sort of political stunt. “So we’re going to do some real investigation into what is going on. From what I read in the letter, there is 30 days to appeal the process, so we’ll be appealing that and then getting to the bottom of what exactly is generating this kind of harsh motives for the Virgin Islands.”
The HUD letter comes on the heels of legislation introduced in Congress which, if enacted, would end birthright citizenship for Virgin Islanders and citizens in other U.S. territories for those born after Jan. 1, 2027. That bill was introduced by Rep. Morgan Griffith, R-Va following a US Supreme Court decision upholding birthright citizenship nationwide and a subsequent comment from Vice President JD Vance in which he called ending birthright citizenship in U.S. territories “a great idea.”
Asked Monday whether the funding suspension includes funds that have already been obligated to the territory, Bryan said the letter wasn’t clear.
“So I really need to get with HFA and see if they have more information that we do,” he said, “and then definitely I’m probably going to D.C. to speak to the HUD.”
