Leadership from Gov. Albert Bryan Jr.’s financial team appeared before the Senate Finance Committee Tuesday with nine days of cash-on-hand and after ending the 2024 fiscal year with a $152 million deficit. When Sen. Novelle Francis Jr., who chairs the committee, asked Finance Commissioner Kevin McCurdy to describe the territory’s financial health in a single word, the latter took a long pause before answering.
“It can be ‘stable.’ I would say ‘stable.’ Optimistically, ‘stable,’” he said.
The meeting offered the most comprehensive accounting of the territory’s finances since the government’s financial team appeared before the 35th Legislature in early September to present the 2025 executive budget. During that meeting, the testifiers requested a $50 million line of credit to help the government meet its obligations amid revenue shortfalls. Lawmakers later loosened restrictions on the $100 million line of credit they authorized in 2023 — meant to kick-start disaster recovery projects — allowing half to be used for vendor payments or payroll.
On Tuesday, McCurdy said $40 million of that had been drawn down and $11 million was repaid. Despite those efforts, the government still owes $66.1 million to its vendors — even after it used $33.6 million in funds received through settlements related to Jeffrey Epstein toward vendor payments.
“You took $33 million from the Epstein funds to pay vendor payments. You still have an outstanding balance of some $67 million,” said Senate Majority Leader Kurt Vialet later, “but yet you characterize the finances of this government as ‘stable?’ Just continue to remember that as we ask questions.”
That use was described as “government operations” in McCurdy’s testimony. He acknowledged that the majority was used to pay vendors when Sen. Carla Joseph asked him to elaborate.
The territory received millions of dollars in settlements after it pursued civil claims against people and businesses they claimed were involved with or enabled Epstein’s actions. According to McCurdy’s testimony Tuesday, the settlements amounted to $254.7 million, of which $156.1 million is available for use by the Virgin Islands government.
Portions of the settlements have always been set aside for legal fees, donations to charitable organizations combating human trafficking and to the V.I. Justice Department. During a regular session in late September, lawmakers divvied the remainder into the newly-minted Southern Trust Company Settlement Fund and the Survivors and Mental Health Healing Trust Fund, and they earmarked the settlement money for specific projects like the Estate Nazareth Sports Complex, school maintenance, construction of a cultural center on St. John, a behavioral health facility in Anna’s Hope, the renovations of the Seaview Nursing Home and Eldra Schulterbrandt Mental Health Facility on St. Thomas, and others.
Bryan line-item vetoed two provisions of that bill that he characterized as redundant or unnecessary. The 35th Legislature overrode the veto and the bill was enacted as Act 8920 in October.
In December, the 35th Legislature authorized using an additional $20 million from those funds to design and build nursing homes on St. Croix and St. Thomas. Bryan vetoed that measure as well, stating in his transmittal letter to then-Senate President Novelle Francis Jr. that redirecting the funds to the Seaview Nursing Home renovation would have “a greater and more immediate impact.”
Lawmakers were less than pleased Tuesday to hear that the money had been used without their approval, and they did not seem swayed by McCurdy’s explanation that the central government had the authority to spend it because it had been placed in the General Fund. Francis said the Legislature would have its legal counsel look into it.
“We have a different view on that, by the way, in that matter,” he said.
Sen. Alma Francis Heyliger pressed for a more detailed explanation, noting that the Legislature still decides how money in the General Fund is spent.
“I’m not sure what the question is,” McCurdy said. “What I spent — based on the agreement, there was $33 million that was transferred to the General Fund that was utilized for General Fund operations. That is my knowledge, and that is what I know.”
Sen. Marise James asked McCurdy if he’d read the settlement agreements — and he replied that he had — before asking if they addressed government operations.
“I cannot recall, no,” he said.
Francis Heyliger revisited the subject during a subsequent round of questioning and again prodded McCurdy about what authority he had to spend the funds.
“There is a mechanism that allows me to spend money. That is authorization needed from this body … and then by the director of [the Office of Management and Budget],” he said.
Francis Heyliger asked if that meant the director of OMB told him to spend the money.
“Senator, 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,” he said.
Francis Heyliger then referred to a section of Act 8920 that requires the Finance commissioner to submit annual reports to the Legislature detailing any expenditures from the settlement funds. McCurdy said he wasn’t sure if any such reports had been sent.
After Tuesday’s hearing, Sen. Novelle Francis Jr. told the Source that the use of the $33 million was not a new revelation.
“I think that what we want to do is to be able to narrow in on exactly how that money was used, and for what,” he said, and to “close loopholes that allow the governor to be able to access those funds without coming to the Legislature.”
Francis said a lot of times, “If funding comes in after the budget has been passed, then … the GVI believes that they have a free hand to that — when clearly … if it comes in, they still should come back to the Legislature to clear it.”
The controversial use of settlement funds was not the first instance of the Bryan-Roach administration tapping the General Fund without approval from the Legislature. In June 2023, lawmakers were outraged to learn that the central government had taken $45 million to help the V.I. Water and Power Authority settle its debt to Vitol and begin acquiring its liquid petroleum gas infrastructure. Bryan defended the payment during an interview with the Source last month, noting that the money was paid back.
“I didn’t put it in my pocket,” he said. “It was for the benefit of the Virgin Islands. And any time a situation exists that’s going to put the benefit of the Virgin Islands or the people in jeopardy, I have that authority as governor of the Virgin Islands. So if we lost the deal, they would have cut off the propane. We wouldn’t have been able to pay for oil, and we’d have been in darkness.”
More recently, lawmakers learned in January 2024 that of the $25 million in retroactive wage payments they appropriated, only $2.5 million had been out. The rest had been used to cover payroll.
On Tuesday, Francis said the Legislature is mounting a second attempt at paying out retroactive wages — this time using funds from the Epstein settlements.
“So we want to make sure that that’s earmarked specifically for retro pay and with specific timelines for this to be done,” he told the Source, “and we’re prepared to go to court if necessary. 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.”
