EDA's bad-loan list lacks names of senators
Published: September 10, 2013
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ST. THOMAS - After months of dodging its initial agreement to do so, the Economic Development Authority furnished an updated list of delinquent borrowers.
The list of 210 names sent Friday represents $6.4 million in delinquent loans made through the former Small Business Development Authority and the Government Development Bank since 1982.
However, the list still does not include many of the names or amounts referenced in an audit by the V.I. Inspector General's Office released in April that found Economic Development Authority's 2010 loan portfolio had a delinquency rate of 84.5 percent and that the Virgin Islands was owed about $8.5 million. The Economic Development Authority had lost millions of taxpayer dollars through negligent, insecure lending practices and through improper administration of its nine lending programs, the report stated.
Despite twice failing to comply with the territory's Open Records laws and provide the full list of who has borrowed the taxpayers' money and how much they still owe or have paid back, Economic Development Authority Director Percival Clouden said Monday that his office is not protecting anyone from exposure.
The audit report said that the Inspector General had "identified 14 loans, valued at $1,856,743, to include former and present senators, and other business leaders in the community."
A former senator received a loan in 1982 for $100,000, and as of 2010, the total pay-off balance was $143,232, according to the audit.
A current senator received a loan in 1985 in the amount of $20,000. As of September 2010, the principal balance was $8,449 with a total pay-off amount of $21,464.
Two lists furnished with a combined 288 names in May contained no such high-profile names and came with the qualifications that they did not contain deceased borrowers, borrowers with payment plans or whom the authority had judgments against, borrowers who had filed for bankruptcy or who have "offers of compromise."
The new list is accurate through Aug. 31, according to Percival Clouden, director of the Economic Development Authority.
Like the May list, it does not contain the names of former or current senators.
However, the information does state that Roberto Tapia, the chief of enforcement for the Department of Planning and Natural Resources who has been indicted for cocaine trafficking, federal program theft and bribe-seeking under RICO statutes, has a principal balance of $19,826 on a loan incurred in Sept. 2006. This amount is different from the amount of $21,383 for the same loan in the May list, of which the principal balance listed is $20,226 and the accrued interest listed is $1,157.
The new list contains only principal balances and does not disclose accrued interests owed.
Clouden said Monday he would have to review Tapia's file to determine what the loan was for.
Clouden was adamant that the same restrictions in releasing names applied to the May list are still valid Monday, but he offered no specifics about why such information was exempt from public disclosure under the Open Records laws.
"We are cognizant of the Sunshine Act, and we comply with the Sunshine Act, but loans are in a constant state of change. The balances do not remain the same every day," Clouden said.
Clouden also defended against the possibility that high-profile people, including the senators and former senators the Inspector General's report stated are part of the delinquency pool, had escaped exposure in the intervening months between the May and September lists.
"I am not hiding anyone," Clouden said.
Clouden said the Economic Development Authority had filed, since May, about 100 claims in small claims court and that it has hired a collection agency on St. Thomas and one on St. Croix to address deficiencies cited in the Inspector General's audit.
However, most of the loan amounts on the list reflect balances of much more than $10,000, the highest amount a plaintiff can seek in small claims court. Many loans on the list range between $30,000 and $150,000.
The difference of $2.1 million between the Inspector General's estimate of $8.5 million in outstanding loans and the figure of $6.4 million attached to the latest list is due to enhanced collection and negotiation efforts, including "charge-offs" and loan modifications, Clouden said.
"We are cleaning up the portfolio. We are asking delinquent borrowers and borrowers period to stick to their payment schedules, and if they cannot do so because of economic conditions or because their projections are not materializing, we are ready to do modifications to lessen their payments to keep businesses alive," Clouden said. "Keeping businesses alive, that is our mission."
Clouden said he did not know how much money, currently, the Economic Development Authority had let go through such modifications.
Despite the fact that the money loaned to its beneficiaries is public money, Clouden said the Economic Development Authority vigorously resists taking excessively punitive stances toward its delinquent borrowers and follows the same regulations that private lending institutions are required by law to follow when accounts become distressed.
For example, Clouden said, after a term of 90 days delinquency, the Economic Development Authority must cease accruing additional interest on a loan because the borrower is clearly in distress.
Clouden offered no comment when asked why the Economic Development Authority did not furnish lists of borrowers who had become current or had modifications to bring them out of delinquency, stating that he would call back to clarify his position.
As of press-time Monday, Clouden did not follow-up on his promise to call The Daily News back.
- Contact Amanda Norris at 714-9104 or email firstname.lastname@example.org.