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Business Week Questions Kennedy Fundraising in Puerto Rico (posted November 27, 2000)

A November 27, 2000 story in Business Week (pp. 96-98) has raised questions of a possible link between corruption in Puerto Rico and Kennedy fundraising. In a story entitled "A Wave of Scandals: Congress is becoming increasingly alarmed that federal money is fueling corruption in Puerto Rico", reporter Christopher Schmitt writes that "In at least once instance, some questionable funds may have found their way to a mainland candidate. Jorge Colberg Toro, who just lost election to the Puerto Rico Senate, has provided BUSINESS WEEK with documents indicating that $20,000 was diverted from federal highway funds for political contributions, of which more than $10,000 went to the statehood party and $1,000 went to the just concluded campaign of Senator Edward M. Kennedy (D-Mass.), father of the DCCC's chief, in 1995. That could be the first incident coming to light of tainted money landing in mainland campaign coffers. In Washington, a Kennedy aide said he knew noting of such a donation but any questionable contribution would be reevaluated. Representative John L. Mica (R-Fla.), who heads a House subcommittee that oversees HUD, says he has heard reports of such recycling and may investigate."

The article pointed out that both Republicans and Democrats had stepped up their fundraising from Puerto Rican sources. For example, in the 1999-2000 election cycle, the leading recipients of Puerto Rico contributions included: George W. Bush ($345,150), Democratic Congressional Campaign Committee ($229,450), Al Gore ($222,750), Bill Bradley ($200,500), Democratic National Committee ($131,200), Republican National Committee ($127,169), National Republican Congressional Committee ($78,449), Patrick Kennedy ($51,000), Edward Kennedy ($48,500), and Charles Schumer ($41,000). The magazine story also pointed out that Congressman Patrick Kennedy "has made fund-raising visits to the island, while also netting $51,000 for his own campaign coffers."

The campaign gifts come at a time of a "growing number of corruption scandals racking Puerto Rico. They range from kickbacks to bribes to bogus companies and sham transactions." Observers claim the corruption probe cost the party favoring statehood for Puerto Rico the governorship in this month's election. Over the last two years, a mayor was found guilty of demanding a bribe for hurricane cleanup work, six people within the Puerto Rico Public Housing Administration have been indicted for bribery, conspiracy, money laundering, and theft of $1.4 million, 12 individuals at the San Juan AIDS Institute have been convicted or pled guilty on defrauding the U.S. government, two directors of Puerto Rico Social Action were founded guilty of embezzlement, and 18 municipal people have been indicted for demanding payoffs.

According to the magazine story, "The scandals could get even worse. Even though island residents can't vote in U.S. elections, Democratic and Republican party officials and candidates from the mainland have stepped up fundraising on this highly politicized island. The Democratic Congressional Campaign Committee (DCCC) has been especially active, with $229,000 in donations reported thus far for the 1999-2000 election cycle (table). Now there are concerns that some donations to mainland campaigns may have been tainted by corruption. At the DCCC, headed by Representative Patrick J. Kennedy (R.I.), spokesman Erik Smith says: 'We're confident every contribution is above reproach.'"
Copyright 2000Karen Martin Media Services