Government Offices, Drug Companies In Anti-Rossello E-Mail Campaign… Influential Commonwealth Party Member Favors Statehood Party Candidate

April 16, 2004
Copyright © 2004 THE PUERTO RICO HERALD. All Rights Reserved.

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Government Offices, Drug Companies In Anti-Rossello E-Mail Campaign

Active Democrats in Washington on and off Capitol Hill received a number of e-mails from lobbyists for Puerto Rico’s local government and congressional staff working for Resident Commissioner Anibal Acevedo Vila ("commonwealth" party/D) apparently intended to discredit statehood party gubernatorial candidate Pedro Rossello (D). Rossello leads Acevedo in the polls for governor this year.

Most of the e-mails passed along news articles on charges filed against the manager of Rossello’s successful campaign for re-election as governor in 1996 and against the statehood party’s secretary from 1991 to 1996. The charges were that the two received a few hundred thousand dollars from contractors in relation to contracts for work on a $372 million water project that is generally considered a major Rossello contribution to the lives of many Puerto Ricans.

The two former Rossello campaign aides have strongly denied the charges but the e-mails all noted their past relationship to Rossello, in an apparent effort to tie him to the charges. A couple of the e-mails suggested that three people with more recent -- and much closer -- ties to Rossello were also going to be indicted this week. They were not. Two of the three individuals publicly explained why they were not involved in the alleged scheme. No suggestions were actually made in the e-mails that Rossello had any tie to the alleged illegal acts.

The most extensive e-mail sent by a lobbyist for the local government was written by a communications consultant in Puerto Rico for major international drug companies with operations in the territory the day before it was received by leading Democrats in Washington. These facts suggested that the local government and drug companies were working together to discredit Rossello. Since the recipients included Democrats who are not in public office -- members of the campaign team of Democratic presidential candidate John Kerry -- as well as government officials, this e-mail raised questions about the use of local government and drug company funds for political purposes.

Acevedo and other members of the administration of Governor Sila Calderon ("commonwealth"/no national party) have worked closely with drug companies to recreate a $3 billion a year exemption from federal taxation for drug company profits from Puerto Rico. A scaled-down version of the tax exemption expires at the end of next year.

Rossello opposes the plan as have the U.S. Senate Committee on Finance -- specifically including Kerry, the U.S. Department of the Treasury, and the chairman of the U.S. House of Representatives Committee on Ways and Means.

Instead, Rossello has supported an extension of a tax credit that has been supported by the Finance Committee and the Treasury Department. It would provide a credit against taxes for spending on wages, capital investments, and local taxes in Puerto Rico by companies based in the States.

Drug companies prefer the 85-100% tax exemption that they have gotten Calderon and Acevedo to champion because of the size of their Puerto Rico profits. The profits are so great that the federal taxes on the income far exceed the companies’ economic contributions spending in Puerto Rico.

The drug companies’ paper also included other allegations regarding Rossello. One was that he is not legally qualified to run for governor again because of his extended, temporary absences from Puerto Rico since 2001.

Another allegation was that Rossello’s government pension was too high because it was calculated on the basis of his claim that he had worked as a summer intern for the government while a college student 40 years ago. The Calderon Administration alleged it could find no record of his employment.

The ostensible main point of the drug companies’ paper was that Rossello’s lead in the gubernatorial race had evaporated because of the allegations.

Rossello has been endorsed by a number of U.S. senators as well as most of the nation’s Democratic governors. Acevedo has not been able to generate as much support except in the House of Representatives in which he serves. He has been conducting a major effort to try to convince national Democrats to withdraw their support of Rossello.

Drug companies may be trying to help Acevedo diminish national Democratic support for Rossello in the hope that this would diminish his local support. This would increase Acevedo’s slim chance of election and make it possible for the companies to obtain continued support of the tax exemptions plan.

Other controversial e-mails were sent around the Congress by a junior press aide to House Minority Leader Nancy Pelosi (D-CA). The aide, Federico De Jesus, is the nephew of the Calderon-Acevedo Administration’s Secretary of Justice and the son and nephew of "commonwealth" party activists.

De Jesus widely distributed news articles that mentioned Rossello in the charges against his two former campaign aides. The articles were also distributed by Acevedo staff members on an anonymous basis.

De Jesus did not distribute a news article the same day revealing a federal charge against the Calderon-Acevedo Administration’s first Secretary of Agriculture. The charge was in connection with fraudulently obtaining $10 million in federal farm loans while he was in the cabinet -- an issue of much greater relevance to federal officials than the allegations against the former Rossello campaigners.

News of De Jesus’ e-mails was revealed by Puerto Rico Senator Orlando Parga (statehood/R). He noted De Jesus’ selective and partisan distribution of Puerto Rico news and use of government equipment for the purpose.

Parga called upon Pelosi to prevent her young staffer from engaging in Puerto Rico political activity from her government office. De Jesus was then told by Pelosi’s communications director to stop distributing Puerto Rico politically-related articles.

This was not the first time that De Jesus’ activities have created a public controversy. He earlier got press attention on Capitol Hill for an excessive verbal attack on someone who disagreed with him.

Influential Commonwealth Party Member Favors Statehood Party Candidate

The Puerto Rico "commonwealth" party member with the most influence in national Democratic Party circles this week acknowledged that he has helped the statehood party’s candidate for governor of the territory in this year’s election.

Miguel Lausell, who chairs the Democratic National Committee’s (DNC) effort to raise funds from people of Hispanic heritage, said that he has spoken to top Democrats in Congress on behalf of Rossello in specific instances.

Lausell’s help to Rossello does not indicate that he now favors statehood or is switching parties in Puerto Rico. He remains a leading advocate of Puerto Rico becoming a sovereign nation in a free association with the U.S. He also says that he also finds Independence Party candidate Ruben Berrios to be an acceptable choice for governor. The only candidate he objects to is Acevedo.

Lausell like Rossello because of the former governor’s commitment to resolving the question of the territory’s ultimate political status. Rossello advocates a Puerto Rican choice among all of the options that would give Puerto Rico democracy at the national government level. In addition to statehood and free association, the options include independence.

By contrast, the candidate of his party, Resident Commissioner Acevedo does not have a serious position on the status issue. Acevedo alternatively advocates two different statuses for the territory.

  • In one, Puerto Rico would be recognized as a nation to which the United States is bound and have the powers to veto U.S. laws and enter into nation-to-nation agreements with foreign countries. Additionally, the U.S. would continue to grant citizenship to persons born in Puerto Rico and continue all current federal aid programs. Federal officials have uniformly said that this proposal is impossible, unworkable, and undesired. The U.S. Government’s rejection of Acevedo’s proposal casts doubt on the seriousness of his support for it; it clearly is not an option for the future status of the territory. Acevedo rarely mentions this proposal in official Washington. He says, however, that it is his preference between his two positions.
  • The other status that Acevedo sometimes supports is a continuation of Puerto Rico’s current status as an unincorporated territory of the U.S. This status does not permit a democratic form of government at the national government level. Acevedo primarily promotes this status to federal officials. He does not, however, acknowledge that the status is that of a U.S. territory. Instead, he generally refers to Puerto Rico as a "commonwealth." He also sometimes terms Puerto Rico a "country" or a "nation."

These positions have convinced Lausell that Acevedo will not act any more seriously on the status issue than has incumbent Calderon.

For Lausell, Puerto Rico obtaining a status that is democratic at the national government level is not just about the inherent right of all people to democracy. It is also about Puerto Rico obtaining the power it needs to confront its economic and social problems and progress. Puerto Rico would obtain substantial power if it either got votes in the federal government or if it could determine its own national policies.

As Lausell recognizes, Puerto Rico is stagnating at best and falling behind at worst because of its lack of power and opportunities due to its territorial status.

Another reason that Lausell will not support Acevedo is the lackluster record of the Calderon-Acevedo team during the past few years. Lausell know this firsthand from his friendship with national Democratic Party leaders. Lausell also knows firsthand how seriously their antagonistic and unrealistic approach to official Washington has hurt Puerto Rico.

Lausell is close to a number of top Democratic figures, including: former President Bill Clinton; DNC Chair Terry McAuliffe; Pelosi; Pelosi’s predecessor, Representative Richard Gephardt, who ran for president in this campaign and is considered a leading candidate for vice president; House Ways and Means Ranking Minority Member Charles Rangel; Senators Edward Kennedy and Tom Harkin; and Representative Nydia Velazquez, who is originally from Puerto Rico.

Clinton appointed Lausell to a prized seat on the Board of the Overseas Private Investment Corporation, a federal agency that helps U.S. companies do business in foreign countries. Gephardt named Lausell a vice chair of his presidential campaign. Lausell has also been appointed to the DNC by McAuliffe.

A prominent lawyer in Puerto Rico, Lausell has also set up an Hispanic-oriented lobbying shop in Washington. He formerly chaired a bank in Puerto Rico. Before that, he was president of the telephone company owned by the territorial government under the administration of former "commonwealth" party governor Rafael Hernandez Colon.

He has also promoted the political future of Hernandez Colon’s son, Jose Hernandez Mayoral.

The "Washington Update" appears weekly.

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