Calderon’s U.S. Corporate Tax Exemption Plan Threatened By Her Support Of Pataki… Senate Territories Committee May Be Led By Status Choice Advocate… England May Leave; Would It Affect Vieques Issue?

October 25, 2002
Copyright © 2002 THE PUERTO RICO HERALD. All Rights Reserved.


A leading congressional supporter of the government of Puerto Rico’s federal economic objectives warned this week that Governor Sila Calderon’s ("commonwealth" party/no national party) plan to campaign for New York Republican Governor George Pataki’s re-election could cost congressional support of her administration’s economic objectives.

Representative Charles Rangel of New York, the leading Democrat on the U.S. House Ways and Means Committee, delivered the warning.

Rangel is a strong supporter of the New York gubernatorial candidacy of Pataki’s opponent, Democratic State Comptroller Carl McCall.

The Ways and Means Committee has jurisdiction over Calderon’s top federal proposal: that the profits that companies based in the States receive from territorial subsidiaries be permanently exempted from taxation. It also has jurisdiction over another priority objective: closing half of the gap between the rates that Medicare pays hospitals in Puerto Rico and the rates that it pays everywhere else in the country. Rangel has been one of the Congress’ strongest supporters of the corporate tax exemption proposal and was championing the Medicare rate increase before Calderon became governor.

His ire exploded when Calderon announced that she would campaign in New York for Pataki. He was especially upset because Calderon had earlier promised him that she would not campaign for Pataki. She made the promise after telling reporters that she would support Pataki. When Rangel expressed disappointment with this statement, she called him to say that it had been "misinterpreted." Rangel knew that Calderon had said she would support Pataki but was satisfied by her pledge not to campaign.

Calderon’s announcement a week ago of her plan to campaign for Pataki followed her joint launching with Pataki of a drive to register residents of New York of Puerto Rican origin to vote in New York and other statements of praise of the New York governor.

She made the announcement of her plan to campaign for Pataki in "announcing" that the U.S. Navy and Marine Corps would end training at their only range on the east coast of the U.S. for practicing combat amphibious invasions on May 1, 2003. She gave Pataki much of the credit for the federal decision.

In fact, the decision had been made — and announced — several times before and Navy officials said that the Calderon "announcement" was surprising since nothing new on the issue had occurred. The first announcement that May 1, 2003 was the date that the training would end was made in early 2000 by then President Bill Clinton and then Governor Pedro Rossello (statehood party/D) after they reached agreement on the date.

The second "announcement" was made later in 2000 when Clinton signed into law legislation that originated in Congress that required the end of training by May 1, 2003, presuming the residents of Vieques voted in a referendum for the training to end.

The third set of announcements were made by Administration officials — including the President — throughout the Bush Administration. They have said that they were working to end the training by May 1, 2003.

The date was called into question in some people’s minds when Congress repealed the May 1, 2003 requirement with the Bush Administration’s support. However, administration officials continued to say that they were working towards a May 1, 2003 end and the new requirement for the replacement of the range did not preclude meeting the May 1, 2003 goal.

Calderon’s plan to campaign for Pataki next week also resulted in sharp criticism from New York Democratic leaders of Puerto Rican origin. Rangel was quoted as saying "What I’m saying is mild compared top what [Reps.] Nydia Velazquez and Jose Serrano feel." Serrano was particularly vocal. So, too, was Bronx Borough President Jose Rivera. Shielding Calderon from some of the resentment, however, were lobbyists working for her administration on the voter registration drive.

Also coming in for criticism related to the New York gubernatorial race was Calderon’s Resident Commissioner in Washington, Anibal Acevedo Vila, who claims to be a Democrat. He has declined to support the Democratic candidate, saying both McCall and Pataki were good on Puerto Rico issues.

Two statehood party leaders, Senate Minority Leader Kenneth McClintock and Orocovis Mayor Juan Colon, presented a contrast to the stances of Calderon and Acevedo Vila on the New York gubernatorial race. They were in New York campaigning for McCall.

McClintock, Puerto Rico’s Democratic National Committeeman, has been a particularly active national Democrat. By contrast, Puerto Rico’s Democratic committee chair, "commonwealth" party Senator Eudaldo Baez Galib, publicly justified Calderon campaigning for Republicans as well as Democrats.


An advocate of Puerto Ricans choosing the territory’s future political status will probably chair the lead U.S. Senate committee on territories issues if Republicans win a majority of the seats in the 100 member body in next month’s elections. Further, the chairman could be a strong critic of Puerto Rico’s current status, which denies the 3.9 million residents of the islands — U.S. citizens — voting representation in their national government.

The development could have a major impact on the issue since some Senate Republicans have blocked most efforts to have the federal government enable Puerto Ricans to choose a fully democratic governing arrangement.

It complements the possibility that the U.S. House of Representatives lead committee on territories issues will be headed by a status choice supporter if Republicans retain control of the House.

The combined support of the two committee chairs could prompt the Bush Administration to act on its support for a choice.

Pete Domenici of New Mexico is in line to chair the Senate committee, the Energy and Natural Resources Committee, if Republicans win a majority in the Senate, where Democrats now have a one-seat advantage. Republicans are so hopeful that they will reclaim a majority of Senate seats and retain control of the House that they are already planning a joint Republican White House-congressional agenda for next year. (Because of a number of toss-up races, most independent analysts, however, are unwilling to predict which party will have a majority in the Senate after the elections.)

Domenici is currently the top Republican on the Budget Committee but is reportedly more interested in the Energy Committee in light of the importance of energy in his State’s economy. He has been a supporter of a Puerto Rican status choice and is sympathetic to the idea of Puerto Rican statehood. New Mexico is the country’s most Hispanic State so the idea of a Hispanic State of Puerto Rico is natural to New Mexicans as well as attractive to its Hispanics.

Domenici’s Democratic opponent in this year’s election is Gloria Tristani, who has a Puerto Rican parent and has lived in Puerto Rico, but is considered unlikely to win. Tristani also supports a Puerto Rican status choice and likes the idea of a State of Puerto Rico, but she has not taken sides publicly on the issue.

The likelihood that a Republican chair of the committee would be a status choice advocate became clear this past week when the next ranking Republican on the committee, Don Nickles (OK) announced he would not try to unseat Senate Republican Leader Trent Lott (MS). Nickles said he would instead seek to chair the Budget Committee.

Nickles has been a leading opponent of Puerto Ricans choosing the island’s status because he opposes Puerto Rico becoming a State. He has suggested concern about a Hispanic State and expressed concern about the cost of Puerto Rican statehood.

Nickles personally favors independence for Puerto Rico and has worked with the territory’s "commonwealth" party to block a status choice.

Lott has been the Senate’s other pre-eminent opponent of Puerto Rican status choice. He has worked closely with Governor Calderon due to his friendship with her lead lobbyist in Washington, Charlie Black.

The current chairman of the committee is another New Mexican, Democrat Jeff Bingaman, who would retain the chairmanship if Democrats retain a majority in the Senate. He personally supports a Puerto Rican status choice and is a strong critic of the "commonwealth" proposals of Calderon and Resident Commissioner Acevedo Vila, but he has backed away from addressing the issue.

One reason for Bingaman’s reticence on the issue is the criticism he got from Representative Luis Gutierrez (D-IL) when he called the commonwealth proposal the "free beer and barbeque" option for Puerto Rico’s future status. Another reason is that he does not think the issue can advance in Congress while Calderon and Acevedo are Puerto Rico’s principal representatives. A third reason is that he is preoccupied with the effort to enact a new national energy policy.

The current top Republican on the committee is former Chairman Frank Murkowski, but he is running for Governor of Alaska.

Republicans are even more confident of retaining control of the 435 seat House of Representatives, although their current majority is just six votes. (While some analysts also rate the House as a toss-up, others think that the Republicans will retain control even if they lose some seats.)

The current chairman of the lead House committee on territorial issues is James Hansen of Utah, but he is retiring. A critic of the "commonwealth" proposals of Calderon and Acevedo, he is also not an advocate of statehood for Puerto Rico. He has been the House’s leading opponent of Puerto Rican efforts to force the U.S. Navy and Marine Corps to stop training at the only range they have on the east coast of the U.S. for practicing amphibious combat invasions, a range on the island of Vieques, Puerto Rico. He has been so disgusted with Calderon’s efforts on the Vieques issue that he has been unwilling to seriously delve into the status issue.

Next in line on the Republican side of the committee and who may chair the Resources Committee is James Saxton (R-NJ). (Duncan Hunter of California is actually next in line but he is expected to opt to chair the Armed Services Committee instead.) Saxton is Chairman of Congress’ Joint Economic Committee and the Armed Services Military Installations Subcommittee, the subcommittee that has lead jurisdiction over the Vieques range issue.

Saxton has not been involved in Puerto Rico issues other than Vieques. If he does not take a Republican chairmanship of the Resources Committee, the chairman will probably be someone who has been involved with territorial issues, Elton Gallegly of California. Gallegly: previously chaired the territories subcommittee that the Committee formerly had; is a protégé of an active advocate of Puerto Rican statehood, former Representative Robert Lagomarsino of California; and was aided as subcommittee chairman by Manase Mansur, best known as the lead House staffer on the Puerto Rico status choice bills in the 1990s.


Navy Secretary Gordon England is reportedly thinking about resigning his position. The Washington Post attributed the possibility to frustration with Defense Secretary Donald Rumsfeld. Other reports say that England will be offered a high position in the Homeland Security Department that the Congress is expected to create in response to a request from President Bush.

England has been a key actor in the Bush Administration’s policy on the Vieques issue. He took over lead responsibility for it after congressional Republican leaders criticized the President’s Senior Advisor, Karl Rove, for his actions in response to requests from Calderon lobbyist Charlie Black and Calderon ally New York Governor Pataki.

England assumed responsibility for the decision to have training at the Vieques range end May 1, 2003 without the referendum on Vieques required by federal law at the time. The decision had really been made, however, by Deputy Defense Secretary Paul Wolfowitz at Rove’s urging. Rove, in turn, acted on the issue at the request of Black and Pataki. They lobbied the issue on behalf of Calderon who wanted the referendum to include an immediate end to training option.

The Wolfowitz/Rove decision resulted in a request to Congress to repeal the requirement for the referendum. That gave range closure opponents such as Representative Hansen, House Armed Services Committee Chairman Bob Stump (R-AZ) and Senate Military Installations Subcommittee Ranking Republican James Inhofe (OK) the opportunity to lead the Congress in repealing the requirement for an end to training by May 1, 2003 as well as the referendum.

The Bush Administration — represented by Wolfowitz and England — agreed to the repeal of the May 1, 2003 date and the substitution of the date when the Secretary of the Navy certifies that the Navy and Marine Corps have an at least as good alternative for the Vieques range. Republican congressmen were, therefore, upset when England continued to work for a May 1, 2003 closure of the range.

The "Washington Update" appears weekly.

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