Concerns over a perceived lack of transparency within government came to the forefront of Tuesday’s Committee on Budget and Appropriation, as senators peppered members of the governor’s financial team with questions about the availability of public website data and the transfer of $200 million in federal funds from a local bank account to a JPMorgan Chase investment account without the Legislature being notified.
Committee Chair Sen. Donna Frett-Gregory also expressed concern over the absence of Office of Management and Budget Director Jenifer O’Neal from Tuesday’s hearing, which left Finance Commissioner Bosede Bruce in the hot seat. Frett-Gregory said the hearing was originally set for Feb. 17 but was switched to accommodate O’Neal’s schedule.
Over nearly eight hours, the hearing covered a range of topics, including the availability of data on both general department and agency websites, along with the government’s transparency website, which has remained down for the past few months. Frett-Gregory said the committee received a testimony at midnight the day before to be read into the record, which was lacking in data and other supporting documents that Bruce said were difficult to obtain from the other agencies, including their expenses from the past month.
While Bruce said it was a technical issue between the agencies’ computer systems — the last reporting listed online is from October 2022 — Sen. Novelle Francis probed further into the status of the government’s transparency website, which Bruce said was also taken down because of integration issues. Once fixed, the site would be back up no later than the first week of March, she added.
Within the last 30 minutes of the hearing, Bruce was also asked to explain why $200 million in federal American Recovery Plan Act (ARPA) funds were recently transferred without explanation from a local bank account to an investment account on the mainland, which, as the questions progressed, was revealed to be housed at JPMorgan Chase.
Bruce said the money was sitting there when she assumed her role about a year and a half ago and had been invested in a certificate of deposit (CD) account bearing interest of 1 percent. The move to JP Morgan Chase yielded a 4.5 percent interest rate and Bruce said if she had invested the money earlier, the government would have received $10 million in earnings instead of the $500,000 it received by keeping it in the territory.
The issue for Frett-Gregory, however, was that the Legislature wasn’t aware of the move, and since there are no rules governing how the interest earnings are used, the government could make the decision to use the money in any way it wants. Asked whether no other bank in the territory could have given a 4.5 percent yield, Bruce said, “no.”
“There was no conversation over the year and a half I have been here about other options,” she added.
Though Bruce said nothing had yet been planned for the interest earnings, Frett-Gregory pushed back, saying the ARPA funds were invested without the knowledge of the Legislature.
“So when you receive the interest, what’s the conversation?” Frett-Gregory questioned. “The government can’t arbitrarily decide what it’s going to use the funds for. It’s about the transparency of the government. If we are moving investments outside of the territory, that is information that should be provided. We shouldn’t be getting texts and info from people who have intel around stuff like this. We should be aware.”
On a related note, Bruce also said earlier in the hearing that there were not yet plans in place on how more than $40 million received so far from a settlement reached last year with convicted sex trafficker Jeffery Epstein’s estate will be used.
So far, the funds are in a separate account with $42.3 million incoming and no expenditures, Bruce said in response to questioning from Sen. Novelle Francis.
“Is there any accounting happening with that funding? What’s happening in that area?” Francis further asked.
“Not as yet. No budget has been received from anywhere,” Bruce said.
Committee members also delved into questions about the government’s plans for the V.I. Water and Power Authority, which has been approved for $97.5 million in ARPA funds with $20.4 million left to transfer. According to testifiers, WAPA will be receiving $5.1 million a month for the next four months — March through June — to help with fuel costs.
Frett-Gregory suggested a sub-committee be formed to look over future funding and budget requests.
“The expectation is this body, as a whole, has to figure out what we are doing with WAPA and how we are going to get out of the predicament we’re currently in,” Frett-Gregory said. “We can no longer make decisions while we are in the dark and the discussion needs to happen sooner rather than later.”
Changing topics, meanwhile, Sens. Marvin Blyden and Ray Fonseca delved into figures provided by Bureau of Internal Revenue Director Joel Lee about hotel room revenue, which Lee said was the “highest for any year on record.” Unsatisfied with data on the dollar figure of revenues collected, the senators said the territory wasn’t pulling in what it could be earning and further requested information from Bruce on total per passenger spending for airport and cruise visitors.
