April 11, 2005 — The Virgin Islands Port Authority paid nearly $400,000 more than it was worth for land to expand the Henry E. Rohlsen Airport on St. Croix, according to an audit report issued Monday.
From 2000 to 2003, the Virgin Islands Port Authority bought 98 parcels of land to expand the airport runway, overpaying individual land owners as much as $41,300, an audit released Monday by the Office of the V.I.Inspector General, said.
The Port Authority paid $387,200 more than the appraised market value for 13 of 61 parcels bought with federal money, according to Steven van Beverhoudt, the V. I. inspector general.
Auditors could find no documentation explaining the discrepancy, the report said.
The audit also questions why the authority gave 38 property owners the maximum $22,500 replacement housing payment without proof that the property owners actually lived in the houses. In at least two instances there were indications that the homeowners, in fact, did not occupy the properties in question. The auditors found no documentation indicating that the Port Authority had investigated the questionable occupancies.
Federal law authorizes such payments to displaced property owners so long as they have lived in the houses being purchased for a minimum of 90 days.
In one case, auditors found a letter to a homeowner that indicated the homeowner had already purchased another residence. The letter requested an independent appraisal of the new residence to "determine if you are eligible for the relocation fee of up to $22,500."
Though there was an appraisal found for another residence, that appraisal was dated July 19, 2002, three days after the VIPA letter went out. And the appraisal said the house was constructed in 2000.
Records suggest the homeowner may have been leasing the Yellow Cedar property, while residing elsewhere, van Beverhoudt said.
The homeowner was nevertheless paid the maximum amount of $22,500.
The replacement housing pay outs are based upon differentials between purchase price of the Yellow Cedar property and the purchase of a replacement house, as well as changes in interest rates and incidental costs involved in purchasing the new residence.
"It looks like they were just writing checks, without benefit of proper documentation," van Beverhoudt said Monday afternoon.
"These are federal funds," he pointed out, adding that Darlan Brin had requested the audit when he first took over the position of Port Authority executive director.
The report recommends an overhaul of the Port Authority's record keeping, including proper documentation of all future land acquisitions, but does not specifically call for a criminal investigation – though copies of the audit were forwarded to the FBI and both the local and federal departments of justice.
Brin said the lack of documentation made it difficult to explain the expenditures.
"I find that the acquisitions of properties cited are questionable from a documentation record-keeping standpoint," Brin said in a letter to van Beverhoudt included in the audit report. Brin did not return a call for further information Monday.
To see the entire report click here .
Editor's note: Shaun A. Pennington also contributed to this story.
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