Delaware’s Behavioral Health Consortium approves opioid crisis abatement funding despite reports of Dover nonprofit Code Purple potentially misusing government funds.

After the State Auditor’s office flagged the Code Purple fraud concerns, all funding to the nonprofit was frozen and the Delaware Department of Justice began attempting to claw back $290,000 in distributed monies.

Attorney General Kathy Jennings also recommended freezing all grant awards until the distribution process could be evaluated by external contractor Social Contract — a decision she said her and Co-Chair of the Prescription Opioid Settlement Distribution Commission Lt. Gov. Bethany Hall-Long were in agreement on.

Jennings said the reports will make recommendations on how to install better guardrails to help prevent future fraudulent incidents, expecting one to be released in August and one in September.

But Tuesday, the consortium approved $1.9 million for the first two phases, Phase 1 A and Phase 1 B, of bridge funding for existing businesses and nonprofits in good standing, despite the Attorney General’s call for a freeze.

During Thursday’s Behavioral Health Resources Committee meeting, Executive Director of Delaware’s Prescription Opioid Settlement Distribution Commission (POSDC) Susan Holloway noted the third phase of the grant cycle, Phase 1 C, likely won’t happen until after the Social Contract reports are released.

“Phase 1 C, we do not have a date set yet – we haven’t had a date. I assume – it’s obviously up to the commission – that won’t happen until sometime later in the fall. And out of the $15 million, since $1.9 [million] was approved for bridge funding, the balance of approximately $13 million will be used as the budget for phase 1 C,” Holloway said.

She also remarked statewide fatal overdoses have largely been decreasing since September, which is when the settlement money began entering the community, and 2023 marked the first reduction of the aggregate number of fatal overdoses in Delaware in 10 years.

Although there has been a 1.8% decrease overall, she noted there has been a 147% increase in fatal overdoses among Black and Brown communities.

POSDC could also lose $45 million originally slated to help fund opioid treatment and prevention in Delaware following a U.S. Supreme Court ruling.

Jennings announced a tentative settlement with Purdue Pharma and the Sackler family in 2022 that was expected to bring the state close to $50 million to help abate the opioid crisis.

In late June, the U.S. Supreme Court ruled the bankruptcy court did not have the authority to release the Sackler family, owners of Purdue Pharma, from legal claims made by opioid victims.

In the original settlement, the Sackler family had agreed to pay $6 billion that could be used to settle opioid-related claims, but only in return for a complete release from any liability in future cases.

The new ruling means settlement negotiations will restart while the separate Purdue Pharma bankruptcy proceedings continue, which Deputy Attorney General Jason Staib says could jeopardize Delaware’s portion of the funding.

“As of today, the $45 million that Delaware was slated to get under the prior settlement that was baked into the Purdue plan is in limbo,” he said.

A statement issued by members of the Sackler family said they “remain hopeful about reaching a resolution that provides substantial resources to help combat a complex public health crisis.”