Fortuno Wins Bush Backing for Puerto Rico Hospitalization Equality… Vieques Trip Raises Rules Questions for House Democrats… Bhatia Downgraded… Key Opposition Emerges to Keeping Ft. Buchanan in Puerto Rico… Bush to Name Vieques Range Defender Top U.S. Military Officer… Strange Bedfellows

April 22, 2005
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Fortuno Wins Bush Backing for Puerto Rico Hospitalization Equality

Puerto Rico Resident Commissioner Luis Fortuno (statehood/R) Wednesday announced a major break-through in the territory’s effort to have Medicare pay the same amounts for in-patient hospitalization services in Puerto Rico as it pays everywhere else in the nation.

Currently, Medicare pays special – lower -- rates for the services in Puerto Rico. The rates are 75% based on the national rates and 25% based on local costs, primarily wages. The local cost factor helps prevent wages for local health workers from increasing.

Fortuno announced that he had obtained the support of Health and Human Services (HHS) Secretary Mike Leavitt for equal payments in Puerto Rico. He estimated that equality would mean an additional $25 million a year for Puerto Rico. Previously, HHS had not supported an increase since the Clinton Administration.

Fortuno, a member of the Republican National Committee, credited the Bush White House for having helped obtain HHS’s support.

Puerto Rico’s representative to the federal government also announced that bipartisan bills for the equality in payments were introduced in both houses of Congress Wednesday. Joining him in sponsoring the House of Representatives bill were Ways and Means Committee Republican Jerry Weller (IL) and eight other representatives. The Ways and Means Committee has jurisdiction over the bill. The Senate ‘companion bill’ was sponsored by Senate Republican Conference Chairman Rick Santorum (PA), a member of the Finance Committee, which has Senate jurisdiction over the bill.

A Clinton Administration initiative to adjust the formula for Puerto Rico rates from 50% national rates/50% local cost factors to the current 75%/25% ratio was enacted into law in 2003 due to the efforts of: Santorum; Senator John Kerry (D-MA); San Juan Mayor Jorge Santini (statehood/R), represented by Puerto Rican lobbyist Manny Ortiz; and the Puerto Rico Hospital Association, represented by Puerto Rican Luis Baco, now Fortuno’s Chief of Staff. Ortiz works with the firm of Quinn Gillespie. Baco worked with McDermott, Will, and Emery, which is now representing the Puerto Rico Senate.

In 1997, a Clinton initiative got the formula changed from 25% national rates/75% local cost factors.

Vieques Trip Raises Rules Questions for House Democrats

Two U.S. House Republicans Thursday called for Minority Leader Nancy Pelosi (D-CA) to prove that a lobbying firm that represents Puerto Rico commonwealthers did not pay for a trip to Vieques, PR in 2001.

The issue is significant because the future of Representative Tom DeLay (R-TX) as House Majority Leader is being widely questioned due to claims that a lobbyist had paid for some of his travel. House Rules prohibit House members from traveling at lobbyists’ expense.

The questions about Pelosi’s trip by Reps. Patrick McHenry (R-NC) and Lynn Westmoreland (R-GA) were raised after it was revealed that records showed lobbying firm Smith, Dawson, and Andrews paid for travel by Rep. Stephanie Tubbs Jones (D-OH) and her husband on the same trip taken by Pelosi and four other House Democrats. Tubbs Jones is a member of the House Committee on Standards of Official Conduct, commonly known as the Ethics Committee, which considers such violations of House rules.

A spokeswoman for Tubbs Jones said that the listing of Smith, Dawson as having paid for the trip was a "human error." She said that the trip was, instead, paid for Todo Puerto Rico con Vieques, a group that worked to close the Navy’s Vieques training range before May 1st, 2003, and that Smith, Dawson had only handled the arrangements.

Jose Paralitici, who ran the group from his home, backed up Tubbs Jones’ claim. He also said that the more than $8,000 in a travel bills came from "a lot of donations." He earlier said that the expenses for Tubbs Jones and her husband alone were $3,366.

Paralitici worked closely with then Governor Sila Calderon ("commonwealth" party/no national party) on the anti-range effort. Smith, Dawson, a Washington firm, includes as a Puerto Rico partner, Ramon Luis Lugo, a top "commonwealth" party strategist and lobbyist for "commonwealth" party administrations.

Luis Lugo helped organize the Calderon Administration’s unsuccessful lobbying for the range to close earlier than May 1st, 2003. He had earlier helped now Governor Anibal Acevedo Vila organize right-wing opposition to the bill that passed the House in 1998 that would have enabled Puerto Ricans to choose the territory’s ultimate status.

Pelosi and the others on the trip other than Tubbs Jones had reported that the travel was paid for by Paralitici’s group.

The House Democratic leader, who has called for a full investigation into the allegations that a controversial lobbyist paid for travel by DeLay, refused to provide proof that Todo Puerto Rico con Vieques paid for her trip.

DeLay has also asserted that his travel was paid for by a non-profit group and denied that it was paid for by the controversial lobbyist.

Questions related to investigating the DeLay allegations have paralyzed the Ethics Committee this year. Unlike other committees, in which the majority party has the most seats, the Ethics Committee has an even number of members, even though a majority is needed to transact business. Republican changes to the committee’s rules, reportedly designed to protect DeLay, have prompted Democrats to refuse to conduct committee business.

In a letter to Pelosi, Reps. McHenry and Westmoreland wrote, "If you are serious that the mere allegation that a lobbyist paid for member travel warrants a full ethics investigation, it would seem that a member disclosing it as a fact would more than warrant it . . . We would hope that you would come forward with any and all documentation your office has proving that in fact the group, Todo Puerto Rico con Vieques, initiated and paid for your trip. Ms. Jones’ disclosures that a lobbyist in fact paid for it and her subsequent statement that the lobbying firm handled the logistics has created an appearance the true source of the funds may not actually be Todo Puerto Rico con Vieques."

Not raised yet is the question of whether the ultimate source of the funds was the Government of Puerto Rico.

Bhatia Downgraded

The head of Governor Acevedo’s offices in the States suffered two setbacks this week.

First, Puerto Rico Federal Affairs Administration (PRFAA) Director Eduardo Bhatia was rebuffed in his efforts to force himself into the program of a conference on the territory’s political status at American University.

It was then decided that an event next Tuesday in Washington marking Bhatia’s appointment would be less pretentious than originally planned. The event, a pretend swearing in of Bhatia, will be held in the foyer of a U.S. House of Representatives office building. Governor Acevedo will attend as will Resident Commissioner Fortuno, who has a seat in the U.S. House.

Bhatia was rejected as a speaker at the American University School of Public Affairs conference, Puerto Rico in Search of Full Democracy, because he currently holds a major public office and is expected to be a political candidate again. The speakers at the conference were limited to former officials or advisors in an effort to defuse some of the politics from the issue.

Bhatia was the "commonwealth" party’s unsuccessful candidate for mayor of San Juan during the past two elections and previously was a member of the Puerto Rico Senate. The high profile way that he is conducting his job as PRFAA director -- for example, constantly issuing news releases -- has given rise to speculation that he is preparing for a campaign to become resident commissioner in the next election.

The conference program included advocates of the three main political statuses discussed in Puerto Rico: statehood, "commonwealth" (U.S. territory status), and independence. Former Catholic University of Puerto Rico Law School Dean Pedro Ortiz Alvarez was scheduled to speak for "commonwealth" but withdrew in favor of Bhatia just days before the event.

Wanting a non-politician, the university turned to Luis Vega Ramos, a lawyer who advises a "commonwealth’" party member of the Puerto Rico House of Representatives.

The case for independence was made by former Senator Manuel Rodriquez Orellana, now a lawyer who advises the Independence Party member of the Puerto Rico Senate.

Former Secretary of Education Carlos Chardon spoke for statehood.

Also speaking were Jeffery Farrow and Alexander Odishelidze. Farrow was the Clinton Administration’s coordinator of Puerto Rico matters and before that staff director of the U.S. House subcommittee on territorial affairs. He spoke on federal views of the issue, particularly that the problems with the issue were unrealistic "commonwealth" proposals and "commonwealth" party opposition to federal efforts to resolve the question.

Odishelidze, a financial expert and author of a recent book on how Puerto Rico’s status as a territory hurts the U.S. as well as Puerto Rico, made arguments from his book.

The program was moderated by an American University graduate student, Jose Luis Fernandez.

Key Opposition Emerges to Keeping Ft. Buchanan in Puerto Rico

The chairmen of the House committee and subcommittee that would have to support a measure essential to keeping the Army’s Fort Buchanan in Puerto Rico open are reluctant to do so, informed sources confirmed this week.

House Armed Services Committee Chairman Duncan Hunter (R-CA) and Readiness Subcommittee Chairman Joel Hefley (R-CO) are inclined against the proposal because the Government of Puerto Rico under then Governor Calderon and then Resident Commissioner and now Governor Acevedo broke a federal-territorial agreement on the closure of the Navy’s Vieques range by trying to force a closure before May 1st, 2003.

The measure needed to keep the base open is a lifting of a ban on improvements at the base. The ban was put in place by law because it was assumed that Ft. Buchanan’s functions could be moved to the Navy’s Roosevelt Roads base when the Vieques range closed. The major function of Roosevelt Roads had been to support training at the Vieques range.

After Calderon broke the Vieques agreement negotiated by predecessor Pedro Rossello, however, the Navy decided to close Roosevelt Roads too, lacking confidence in any agreement with the Government of Puerto Rico, despite Calderon and Acevedo saying that they wanted Roosevelt Roads to remain open while they wanted the related Vieques range closed.

The closure of Roosevelt Roads leaves Ft. Buchanan as the only real U.S. military base in Puerto Rico. The U.S. Army would like to be able to make improvements at the base and the Bush Administration supports the Army request. But Hunter and Hefley share the Navy’s skepticism of Government of Puerto Rico assurances that it will continue to want to keep Ft. Buchanan open, especially in light of now Governor Acevedo’s record.

The issue of the ban on improvements to Ft. Buchanan is critical now since the federal government is planning to close a large number of military bases this year and Ft. Buchanan has already appeared on a draft Pentagon list for closure. Closure would be almost certain if improvements cannot be made to the base.

Two U.S. senators expressed support for the based this week, Orrin hatch (R-UT) and Mel Martinez (R-FL) but neither is on the Senate Armed Services Committee.

Bush to Name Vieques Range Defender Top U.S. Military Officer

A White House source Tuesday said that President Bush had accepted Defense Secretary Rumsfeld’s recommendation that he name Vice Chairman of the Joint Chiefs of Staff Peter Pace chairman when the current chairman steps down this August, confirming an earlier report in UPDATE.

Marine Corps General Pace authored the U.S. Navy Department’s primary report on why the training range on the island of Vieques was essential.

Strange Bedfellows

Chief Washington representatives of Governor Acevedo and archrival Senator Pedro Rossello (statehood/D) are joining together in a new public affairs advocacy firm. The representatives are Acevedo’s Charlie Black and Jack Quinn and Ed Gillespie. Quinn and Gillespie head the firm in which Rossello’s representative in the States, Manny Ortiz, works. Ortiz also handles other Puerto Rican clients for the firm including Banco Popular and San Juan Mayor Jorge Santini.

The "Washington Update" appears weekly.

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