U.S. House Democrat Contradicts Acevedo On Shipping Laws Exemption… Commonwealther Who Exposed Acevedo Slush Fund Has Top Ties In DC… Commonwealthers Pledge $100,000 To The National Democratic Party… Prats Seeks Funds From Drug Companies, Pledges Rejected Tax Exemption… President’s Puerto Rico Status Task Force Meets On Legal Issues

April 23, 2004
Copyright © 2004 THE PUERTO RICO HERALD. All Rights Reserved.

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U.S. House Democrat Contradicts Acevedo On Shipping Laws Exemption

A knowledgeable U.S. House of Representatives Democratic leadership aide this week said that he did not think the leaders would support an exemption for a port being built in Ponce, Puerto Rico from the laws requiring that shipping between U.S. ocean ports be on American built, owned, and crewed vessels.

The assessment was given in reaction to a claim in Puerto Rico last week by the territory’s Resident Commissioner in the House, Anibal Acevedo Vila ("commonwealth" party/D), that there is a "receptivity," in the U.S. Congress to the idea.

The aide said that Resident Commissioner Acevedo had not consulted party leaders on the idea but that he expected that they would react negatively. The aide also questioned whether Republican leaders would back the Acevedo proposal since Don Young (R-AK), the Chairman of the House of Representatives Transportation and Infrastructure Committee which maintains jurisdiction over the issue, is a supporter of the current laws and a strong advocate of treating Puerto Rico equally with the States.

Resident Commissioner Acevedo has been a sharp critic of Representative Young. He also has been a sharp critic of the Senate Environment and Public Works Committee chairman on the issue, James Inhofe (R-OK).

A few years ago, the Transportation Department in the Clinton Administration opposed exempting Puerto Rico from the laws in response to a bill proposed by Acevedo’s closest ally in the House, Representative Luis Gutierrez (D-IL).

Resident Commissioner Acevedo argued that an exemption for the port might succeed because it is intended to focus on transshipment to foreign locations.

However, national labor unions have traditionally opposed any weakening of the laws, popularly known as the "Jones Act." And during the Administration of the first President Bush, the department also opposed a proposal for a limited exemption from the laws for the territory of Guam.

An exemption from the laws is said to be part of Resident Commissioner Acevedo’s "commonwealth’ agenda for Puerto Rico.

Commonwealther Who Exposed Acevedo Slush Fund Has Top Ties In DC

The Puerto Rico "commonwealth" party supporter who this week revealed that Resident Commissioner Acevedo personally -- and suspiciously -- took a $20,000 political contribution from him on the eve of Acevedo’s congressional campaign has close ties to top leaders of the national Democratic Party.

Dr. Richard Machado, a prominent hospital owner, has particularly warm relationships with former President Bill Clinton, Democratic National Committee (DNC) Chairman Terry McAuliffe, and U.S. House of Representatives Minority Leader Nancy Pelosi (CA). For example, Dr. Machado is the one home that President Clinton went to during his visit to Puerto Rico.

Dr. Machado’s disclosure of the solicited Acevedo donation brought to public awareness a secret fund that Resident Commissioner Acevedo had personally controlled in 1999 right before he formally announced his congressional candidacy. At the time, Acevedo was Minority Leader of the P.R. House of Representatives. He also was the president of the "commonwealth" party, as he is now.

Dr. Machado’s revelation made it appear likely that Resident Commissioner Acevedo collected other large, secret contributions in the name of his mysterious "Friends of Acevedo Vila Committee." Acevedo took the $20,000 check from Dr. Machado at a lunch at which other businessmen who have been major financial supporters of the "commonwealth" party were present.

Dr. Machado attended the lunch and gave Acevedo a check after he was told that the P.R. House minority leader and party president "needs some money to pay some things."

What those "things," were is unclear. Resident Commissioner Acevedo first denied having taken the funds and later said that he used them for lobbying the U.S. Congress against passing legislation to enable Puerto Ricans to choose the territory’s future status. Still later, he suggested that some of the funds could have been used to urge Puerto Ricans against making a status choice in a referendum in December 1998.

Further, however, the money was deposited in an Acevedo family-controlled bank account.

In addition, public reports held that Resident Commissioner Acevedo had not reported the contribution on his required campaign finance or personal financial disclosure forms and the question of whether he had reported it on his income tax form was raised. Opponents suggested that he may have violated a law if he had not reported the money on any of the forms.

Resident Commissioner Acevedo’s changing explanations regarding the secret monies raised a number of questions even among other leaders of his own political party. The federal legislation that he claimed he used the funds for died in the U.S. Congress nine months before he obtained the check. The referendum that he suggested he may have spent some of the money on was also held months before.

Resident Commissioner Acevedo said that he would make details of the spending public next week.

Resident Commissioner Acevedo’s inability to provide a coherent -- and supportable -- explanation regarding the funds added to concerns about his candidacy among other "commonwealth" party leaders. They had previously been concerned because he has consistently trailed statehood party candidate and former governor Pedro Rossello by over 12% in the polls and by Resident Commissioner Acevedo’s failure to propose policies for the governing of the territory.

Resident Commissioner Acevedo compounded his problems regarding the secret $20,000 gift this week by directing the "commonwealth" party to pay Machado $20,000. Since Dr. Machado had not given the party the money in the first place, however, others quickly criticized the action as illegal. Recognizing that he may have made another mistake regarding the funds, Resident Commissioner Acevedo said that he would personally raise $20,000 to repay Machado if required to legally.

In an interview, Dr. Machado also made matters worse for Resident Commissioner Acevedo’s candidacy by disclosing that it was "common practice," for their party to seek contributions of as much as $10,000 far in excess of legal limits. Citing his experience as a member of the party’s finance committee, he also revealed that party officers often asked for cash or to have bills paid directly. In addition, he said party officials had destroyed records of contributions in excess of legal limits.

Dr. Machado also said that he was crossing party lines to support Rossello for governor this year. Sources close to him, however, confirm that he remains a dedicated member of the "commonwealth" party.

The hospital owner explained that he is backing Rossello because of Rossello’s commitment to enabling Puerto Ricans to choose a status that is democratic at the national government level from among all the options. He identified Resident Commissioner Acevedo as not being serious about Puerto Rico’s fundamental issue.

In addition to endorsing Rossello, Machado also praised the candidacy of Independence Party nominee Ruben Berrios, who is not given much of a chance to win the election.

The U.S. government has rejected Resident Commissioner Acevedo’s proposed future status for Puerto Rico as being impossible as well as undesired. The proposal calls for Puerto Rico to be recognized as a ‘nation,’ to which the U.S. is bound. Under the contradictory arrangement, Puerto Rico would have the powers to veto federal laws and enter into binding agreements with foreign countries and the U.S. would continue to grant citizenship and all programs currently granted. Resident Commissioner Acevedo’s continued advocacy of his proposal despite the federal rejections and his insistence that Puerto Rico is not a U.S. territory have led to a widespread view that he is not serious about the issue.

Dr. Machado’s vision of Puerto Rico’s future status resembles that of party founder Luis Munoz Marin rather than Resident Commissioner Acevedo’s. Dr. Machado supports Puerto Rico becoming a sovereign nation in a free association with the U.S.

Dr. Machado became a major contributor to his territorial party and the national Democratic Party out of a sense of obligation to his communities for the opportunities that he had to become a financial success. He has wanted to ensure that his fellow citizens also enjoyed such opportunities.

His generous contributions to the national Democratic Party gave Dr. Machado access to such national leaders as President Clinton and U.S. House Minority Leader Pelosi. They embraced him as a friend, however, because of his altruism and since he never asked for recognition or any other personal benefit in return for his contributions.

Commonwealthers Pledge $100,000 To The National Democratic Party

Members of the administration of Governor Sila Calderon ("commonwealth"/no national party) have told the DNC that they hope to raise $100,000 for the party committee at an event in San Juan May 7, 2004.

The fundraiser is being organized by "commonwealth" party Resident Commissioner candidate, Democratic committee chair, and Senator, Roberto Prats and Government of Puerto Rico lobbyist Gabriel Guerra Mondragon, a former U.S. ambassador to Chile. Senator Prats’ running mate, "commonwealth" party gubernatorial candidate and current Resident Commissioner Acevedo, is expected to also be involved.

DNC Chairman McAuliffe will attend the event. A source close to the party leader said that McAuliffe remains neutral in the gubernatorial race between Resident Commissioner Acevedo and former Governor Rossello and on the issue of Puerto Rico’s future status. McAuliffe, has, however, endorsed the candidacy of Senator Prats, with whom he has been friendly for years.

Senator Prats’ goal for the fundraiser, however, is to use it to obtain national Democratic Party acceptance this year of "commonwealth" as an option equal to statehood and nationhood for Puerto Rico’s future status. It is unclear, however, whether Senator Prats means the current "commonwealth," that is Puerto Rico’s continued status as an unincorporated territory of the U.S. without national government democracy, or running-mate Resident Commissioner Acevedo’s "commonwealth" vision, which has been rejected by national Democratic leaders.

Prats Seeks Funds From Drug Companies, Pledges Rejected Tax Exemption

"Commonwealth" party resident commissioner candidate Senator Prats had a meeting with representatives of eight major drug companies in Washington, DC Wednesday to raise funds for his congressional campaign.

The Puerto Rico Senator pledged a renewed effort to obtain 85-100% federal tax exemptions for the Puerto Rico profits of the companies if he is elected and depending upon the findings of federal studies -- which are expected to expose the flaws of the proposal.

The current leaders of Senator Prats’ party, Governor Calderon and Resident Commissioner Acevedo, lobbied with the companies for the tax exemptions for almost three years before acknowledging that the federal government would not approve the proposal during their administration. The U.S. Senate Finance Committee, the U.S. Treasury Department under President Bush, the chairman of the House Ways and Means Committee, and Democratic presidential candidate John Kerry, opposed the proposal.

After the Finance Committee rejected the proposal for the second time, the committee’s Republican and Democratic leaders, Chairman Charles Grassley (R-ID) and Democrat Max Baucus (D-MT), asked the General Accounting Office and the Congress’ Joint Committee on Taxation to conduct broad studies of Puerto Rico’s economy and tax and social program issues regarding the territory and of alternatives for meeting any needs identified by the studies. Their request included several questions that raised criticisms of the Calderon-Acevedo-Prats-drug companies tax exemptions proposal.

President’s Puerto Rico Status Task Force Meets On Legal Issues

The President’s Task Force on Puerto Rico’s Status conducted its first substantive meeting earlier this month. An earlier meeting was organizational in nature.

This month’s meeting focused on the legal questions raised by the future status proposals of Puerto Rico’s three political parties, each of which advocates a different governing arrangement for the territory. These questions have been the most problematic aspects of the issue.

In particular, the proposal of the "commonwealth" party has been held by federal officials to contradict the Constitution and basic laws and policies of the U.S. The U.S. Justice Department and other experts have identified only minor questions with the proposals of Puerto Rico’s statehood and independence parties.

The "Washington Update" appears weekly.

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