EDA refuses to release names of loan recipients


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ST. THOMAS - Once again, the Virgin Islands Economic Development Authority is refusing to release the names of loan recipients who were given millions in public funds.

In April, The Daily News requested the names of delinquent borrowers. The V.I. Inspector General's audit had found that the EDA's 2010 loan portfolio had a delinquency rate of 84.5 percent and that the Virgin Islands was owed about $8.5 million.

The EDA lost millions of taxpayer dollars through its negligent, insecure lending practices and through its improper administration of its nine lending programs, the report stated.

According to the report dated April 2 and released on April 3, the deadbeat borrowers included former senators, business leaders and local contractors. As in all its audit reports, the Inspector General did not give the borrowers' names.

On April 3, The Daily News asked for the names. That request was followed with a formal request citing the V.I. Open Records Act on May 7.

EDA President and Chief Executive Officer Percival Clouden initially told The Daily News that a reporter could have the list of delinquent borrowers the next day. He said the disclosure of the names was something he wanted to make public to help with the collection of the past due amounts. 

The next day, the EDA failed to provide the names. One month later, the EDA sent a partial list of only the delinquent loans the agency deemed collectible. The agency said the list had been scrubbed of borrowers who were dead, on payment plans, filed for bankruptcy or were in litigation.

In May, The Daily News made a second formal request for the complete list of delinquent loans, regardless whether the EDA felt the loan was collectible.

Clouden released a list in September. However, the list did not include senators, business leaders and others that the audit referenced.

That September list did contain 210 names and represented $6.4 million in delinquent loans made through the former Small Business Development Authority and the Government Development Bank since 1982.

In October, The Daily News formally requested a list of all loans given out by the EDA - not just delinquent loans - to include the name of the recipient, the amount of the loan, the borrower's stated purpose for the loan and the loan's current status.

The EDA is now refusing to release the list, citing potential lawsuits from loan recipients.

"There's no real hold up. We provided a list already," Clouden said.

He said any questions about the EDA's position on the disclosure should be directed to the authority's legal counsel, attorney Henry Smock.

Smock told The Daily News that a disclosure of the borrowers "has raised some issues of right to privacy and the possibility of facing lawsuits from some of our customers."

He said the EDA has decided to withhold the names of borrowers because it thinks the V.I. law is not clear and the courts should decide the matter.

The Government Development Bank was formed after the territory's Open Records law already was on the books, but Smock said he believes lawmakers probably never thought about how the laws would affect a government bank.

Smock recommended that the newspaper file a lawsuit seeking a declaratory judgment action in V.I. Superior Court. 

"It's not a question of trying to hide anything. We don't want to be exposed to any lawsuits, and we believe there should be some clarification on that," he said.

The territory's open public records law was enacted in 1972. The Government Development Bank, which is the lending arm of the EDA, was established six years later, in 1978.

According to the V.I. Code, "public records" includes all records and documents belonging to the territory or any branch of government or in any department, board, council or committee of any branch of government.

The Daily News' position is that the money the EDA lends is taxpayer money, the list of loan recipients is a public record and the public should not have to go to court to obtain the information.

"It's unconscionable to put the burden on the public to go to the expense of seeking court-administered solutions to what is a very clear-cut situation," Daily News publisher Jason Robbins said.

"Claims that the open records law does not adequately consider agencies such as the Government Development Bank don't hold any water," Robbins said. "The law came first, and later when the bank was created, our legislators saw no need for exemption and obviously intended for the bank to operate in the full light of public scrutiny.

"Nothing has changed and our question remains: What are they hiding?" Robbins said.

Robbins said the newspaper is reviewing all options and will proceed along the path that best ensures continued public access to public information.

- Contact reporter Aldeth Lewin at 714-9111 or email alewin@dailynews.vi.

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