$100M loan used as a bargaining chip — Penn

Eighth District Representative Marlon Penn has claimed that the government’s recently announced $100 million loan is being used as a political bargaining tool to entice lawmakers into crossing the political aisle.

During the budget debate in the House of Assembly, Penn criticised the absence of a clear spending plan for what he described as the single largest loan ever borrowed by the territory.

“The public is yet to see a spending plan for this money. That is unheard of,” he said while likening the allocation process to a giveaway segment on the popular Oprah show.

“The [way the] Premier is handling this money… ‘you get a million, you get two, you get three, every one gets a million’. That’s the way we’re dealing with the public’s funds,” Penn said.

Penn raised concerns that the funds were allegedly being used for political leverage. “It seems like it’s used as a bargaining chip to get people to cross the floor,” he said. “That seat cost a lot of money”.

Penn warned that the loan’s cost, combined with its mismanagement, could have a lasting impact on the Virgin Islands. “At the end of this process, that particular loan is going to cost the taxpayers of this country over $70 million in interest,” he explained.

Missed opportunity to renegotiate

Meanwhile, Penn also pointed out a missed opportunity to renegotiate the terms of the loan, which he believes could have saved the territory millions. “It was irresponsible for us not to renegotiate, especially on the heels of the announcement of the [US Federal Reserve] discussing the drop in interest rates,” Penn said. Penn argued that even a minor reduction in the loan’s interest rate could have saved the territory $5 million to $6 million over its 18-year lifespan.

He criticised the government for failing to take fiscally responsible steps. “What responsible leadership would say you should have had no right doing that?” Penn questioned, urging lawmakers to act in the public’s best interest.

Penn also stressed the broader implications of financial mismanagement for the Virgin Islands’ economy. He criticised the practice of using savings to pay off loans, calling it unsustainable. “You cannot pay your debt from your savings as a country,” he said. Penn urged the government to implement innovative revenue-generating measures instead of relying on increased taxation.