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In The Bronx, An Antipoverty Empire Tries To Shed A Power-Broker Past


July 2, 2001
Copyright © 2001 THE NEW YORK TIMES. All Rights Reserved.

Ramon S. Velez missed the National Puerto Rican Day Parade on June 10, but not his float, which broadcast a recording of his voice.
[PHOTO: Chester Higgins Jr./The New York Times]

Amid the cheering crowds, blaring music and billowing flags at the National Puerto Rican Day Parade three weeks ago, a quiet drama unfolded, not visible in any activity along the route. It presented itself in two absences.

For the first time in 35 years, Ramon S. Velez, who helped build the parade into both a cultural institution and a lucrative commercial enterprise, did not march. A float broadcasting his voice traveled the route instead. And for the first time in almost as long, the nonprofit social services giant that Mr. Velez founded and fashioned into a political machine displayed no contingent either.

Without formal notice, a page had turned in the history of the South Bronx, and of the Puerto Rican presence in New York.

For some three decades, Mr. Velez presided as the pre-eminent antipoverty baron of the South Bronx, whose operation controlled everything from school boards to jobs to many of the Bronx's elected officials, as well as millions of government dollars. He was praised for securing the South Bronx's fair share of the War on Poverty's milk and honey, for building up institutions like Lincoln Hospital and for boldly asserting Puerto Rican pride and power.

He was also accused of strong- arming rivals, be they political opponents or other social service organizations, and turning his fief into a patronage mill. He was lambasted for growing rich while serving the poor, and for serving them badly. And he was investigated dozens of times but never indicted, a fact he wore as a curious badge of honor.

Ramon Velez in 1973-----
Ramon Velez in 1973, chatting with a job seeker in Hunts Point.
[PHOTO: Don Hogan Charles/The New York Times]

But now Mr. Velez, 68, is in a Manhattan hospital, suffering from Alzheimer's disease. His decline over the past few years, first gradual and then precipitous, put his main organization, the Hunts Point Multi- Service Center, up for grabs, causing a succession struggle that pitted deputies, allies and his son and daughter against one another. Last year, it led to Mr. Velez's own board's deposing him and placing him on permanent medical leave.

When the dust settled this spring, a new man, an outsider, was at the helm of the center, which has been both neighborhood anchor and investigative lightning rod since its inception in 1967. Mr. Velez's successor, Manuel A. Rosa, is more government bureaucrat than political kingmaker. He says he is determined to shore up the center's finances and to remove all suggestions of impropriety from the organization, and its absence from the parade was a first step. His board, he said, wanted to distance itself from some of Mr. Velez's practices, among them using his social- service employees for parade and political work.

"I want to be as fair to the history as I can," Mr. Rosa said, "but I also want to tell people this is a new day for Hunts Point Multi-Service. This organization is too important to lose."

Symbol of Broader Change

The end of Mr. Velez's personal reign is seen, in some quarters, as a symbol of broader change in the Bronx and beyond.

The field of health care has become much more competitive and more costly. Mr. Velez's operating principle – that the number of government dollars gained equaled effective assistance to the poor – has been seriously undermined. Bronx politics, which he once controlled ruthlessly, has become a much livelier free-for-all. And the city's Puerto Rican population – the bedrock of Hunts Point's client base, and Mr. Velez's political base – is declining as that of other Hispanic groups grows.

"Whether you thought good or ill of Mr. Velez, you had to concede that his clout made Puerto Ricans impossible to ignore," said Angelo Falcón, senior policy executive at the Puerto Rican Legal Defense and Education Fund. "It is the equivalent of a major change down at City Hall. It's a very critical point in the history of Puerto Rican politics in the Bronx and the city."

There are two Puerto Ricans, Fernando Ferrer and Herman Badillo, running for mayor. But each faces the challenge of mounting a broader pitch to a city whose Latino makeup is much more varied than when Mr. Velez was at the peak of his power.

And some things have not changed much. Mr. Velez's son and daughter, although essentially exiled from his flagship medical operation, each have jobs running other organizations their father started. The last months of Mr. Velez's reign saw behind-the-scenes deal-making and maneuvering not uncharacteristic of Mr. Velez himself in his heyday.

And across the Bronx and the city, many local organizations that rose in Mr. Velez's wake continue to thrive. Not a few of their leaders copied his practice of empowering, and even enriching, themselves through those outfits.

As for Mr. Velez, his own history is lost to him. His daughter says he recognizes her and his wife, but few others. Until a recent surgery, he still shook hands and smiled like the politician he once was, but the gestures have been emptied of meaning. He is a blank canvas on which others now sketch their interpretations of his life and legacy.

The bare facts are agreed upon. Mr. Velez came to New York from Puerto Rico in the early 1960's. He was 28, born before the mass migration from the island to New York began. A social worker, he recognized both need and opportunity in the thousands of Puerto Ricans pouring into the Bronx. Starting with a $50,000 grant for a health clinic, he soon expanded into everything from housing to Head Start educational programs, although health care always remained at his operation's center.

Money and Power Flow

The millions from the War on Poverty and later government efforts – more than $300 million, by Mr. Velez's estimate – flowed, and his power flowered. With hundreds of employees, and thousands of patients and clients, he had a ready-made campaign machine, used for Republicans and Democrats alike. Presidents, governors and mayors sought his counsel and saw to it that the dollars kept coming.

There was no disputing that some of those dollars flowed into Mr. Velez's pockets. Besides an array of nonprofit organizations, he established for-profit corporations that provided the nonprofits with service or space, often at noncompetitive rates. Critics said ordinary people suffered from the shortfalls, enduring mediocre services for years.

Today, Hunts Point runs three clinics, including one housed in a new building, as well as a methadone clinic, day care programs and programs for the elderly, and more – a total of 23 government-financed programs. It has 380 employees, from well-compensated executives to social workers. Although Mr. Velez's influence waned somewhat in recent years, the money still flowed in, including more than $6 million in federal funds secured by Representative José E. Serrano, long backed by Mr. Velez, to build housing for the elderly, and about $20 million in city contracts in the past two years.

But then Mr. Velez fell ill, and the succession intrigue began. His daughter, Marisa Velez, 29, presided over Hunts Point for six months last year, before, she says, she was tricked into resigning by others in the organization. She was replaced by a Velez deputy, William Frame, and then a few months later, by her half brother, Ramon Velez Jr. In between came a board meeting, from which she was barred, and at which her father was placed on permanent medical leave – with the approval of her half brother.

To her and her mother it was a demeaning denouement. Her father always tried to help the sick, Ms. Velez said. "Then when he came down with illness, he was treated in such a poor manner by the people he helped, the people he put on the board. Because they wanted power, they really degraded him."

Her father, she said, still has no retirement package, although she concedes that he managed to accumulate a private pension of well over $1 million.

Those who made the decision to remove Mr. Velez, her brother among them, say they were trying to protect his legacy. "I had to do what I had to do at the moment," Mr. Velez Jr. said.

Mr. Velez Jr. left Hunts Point Multi-Service in January, and its board began an open search for a new director. Marisa Velez applied for her old job. She did not get it. Mr. Rosa did.

Raised in the Bronx, schooled in Maine, he earns praise from almost all quarters as honest and earnest. He has worked for government officials and government agencies – most recently the city's Health and Hospitals Corporation, where he was an assistant vice president. He is more interested in lobbying in government offices than in trying to determine who occupies them.

"Not my style," he said of politics.

Scrutinizing Every Dollar

He is gingerly trying to respect what Mr. Velez did while essentially turning it on its head. He is conducting a top-to-bottom review of the organization. He plans to cut costs and reorganize. He will not rule out layoffs – a sharp departure at a place where loyalty once guaranteed employment. With the board's mandate, he is scrutinizing every dollar, including vendor contracts that may or may not be linked to Velez enterprises.

"The board has pretty much made a decision to try to remove itself from anything that will raise questions in that fashion," he said.

The motivation is as much practical as philosophical. Government revenues are harder to get and harder to keep. And the health care landscape has changed significantly over the last decade. The rate at which the government pays for Medicaid visits has been frozen for years, and Hunts Point soon will have to shift all Medicaid patients into managed care plans. In 1998, the center got $13.9 million in Medicaid reimbursement from the state. It got just $11.2 million last year. And the state, saying it overpaid, is seeking to recoup nearly $500,000 of that – bad news for a center already facing a $300,000 deficit in its health-care operations.

Patient visits to Hunts Points' clinics are down a third from their peak, and Mr. Rosa recognizes that he has to improve the quality of care to change that. Hunts Point has been accused of inferior service, and some practices have raised red flags. In 1999, for example, the center was fined and placed on probation by the state because its pharmacy was misbranding and repackaging drugs.

Recognizing that health care today is about marketing as well as medicine, Mr. Rosa said he also planned aggressive advertising beyond the Puerto Rican community – to Dominicans, Mexicans and others crowding into the Bronx. The Bronx's Puerto Rican population has declined 9 percent since 1990, according to census figures, the first drop after at least four decades of steady growth.

"We are very proud to have been identified as a Puerto Rican organization," Mr. Rosa, who is 46, said. "But as the world changes, we have to change."

George Rodriguez, a board member and long one of Mr. Velez's loyal allies, agreed. "We have to work on the new arrivals the way the Italians and the Jews did with us in the 1950's," he said.

Political Reorientation

The decline in the Puerto Rican population requires a political reorientation too. "We now have to call ourselves Hispanics, not Puerto Ricans," said Michael Nunez, a former Velez deputy who is president of the South Bronx Board of Trade, a separate organization.

Even without changing demographics, Mr. Velez – who had briefly served on the City Council, but was better known for the campaigns he backed – had been on the political defensive in recent years. His candidates had increasingly met defeat, most notably at the hands of his longtime rival, State Senator Pedro Espada Jr., who used a competing string of health clinics as a political base.

"The residuals of his political strength were people the community did not support," Senator Espada said.

As a result, Bronx politics today is more like a brawl than the well- organized boxing match, complete with predictable outcome, it once was. Mr. Velez has no heir. "That is the price of machine politics," Mr. Falcón said. "You develop a cult of followers, but you don't develop many leaders."

Mr. Velez's real heirs, his children, have landed on their feet. Ms. Velez is running the South Bronx School of Technology, another venture started by her father. It happens to rent space from Hunts Point Multi-Service, which is a little like parties in a divorce continuing to share a house. Mr. Velez Jr. returned to running a nonprofit housing group also started by his father, South Bronx Community Management, which has control of Don Pancho Development, Mr. Velez's for-profit company.

And the Velez tradition of appearing to feed off a mix of poverty programs and real estate deals is not entirely dead. Mr. Velez Jr. sold the building that used to rent space to Hunts Point's clinic to a group that included Mr. Frame, his father's former deputy, who then turned it into a homeless shelter. Mr. Frame left Hunts Point Multi-Service this year.

So while Ms. Velez, still bitter, complains that Hunts Point Multi- Service is "a completely different animal" than it was under her father, Mr. Rosa, the unlikely heir to that throne, believes things are not yet different enough.

"The past is past," he said. "You thank Mr. Velez for his efforts, and his family, you give them their just due, but if you're going to build on that vision, you have to do it on the realities of today."

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