Governor of Puerto Rico Indicted

WASHINGTON Puerto Rico Governor Aníbal Acevedo Vilá and 12 associates in Puerto Rico, Washington D.C., and the Philadelphia-area have been charged in a 27-count indictment. The defendants face charges ranging from conspiracy, false statements, wire fraud, federal program fraud and tax crimes related to campaign financing for the governor's 1999-2000 and 2001-2002 campaign for Resident Commissioner of the Commonwealth of Puerto Rico and subsequent 2004 gubernatorial campaign. According to the indictment, the defendants conspired to defraud the United States and violate various Federal Election Campaign Act provisions by having Puerto Rico businessmen make illegal and unreported contributions to pay off large and unreported debts stemming from Acevedo Vilá's 1999-2000 and 2001-2002 campaigns for Resident Commissioner of the Commonwealth of Puerto Rico. Payments were made principally to the public relations and media company for the campaigns. The illegal actions continued into 2003, due to the significant debt accumulated by the campaigns, some of which was also concealed from the FEC and the public. Acevedo Vilá and legal advisor, defendant Inclán Bird, solicited, accepted, and then reimbursed illegal conduit contributions from Acevedo Vilá's family members and staff. Conduit contributions are illegal campaign contributions made by one person in the name of another person. In addition, a group of Philadelphia-area businessmen solicited, accepted, and then reimbursed illegal conduit contributions from their own Philadelphia-area family members and staff for defendant Acevedo Vilá. Acevedo Vilá, in his official capacity, then personally assisted the businessmen in their attempts to obtain contracts from Puerto Rico government agencies for themselves or their clients. The indictment also alleges a scheme to defraud the Puerto Rico Treasury Department of $7 million by fraudulently pledging to abide by a voluntary public funding law in defendant Acevedo Vilá's 2004 successful campaign for governor of Puerto Rico. The funding law required a cap on campaign spending and required full reporting of all contributions and expenditures. In exchange, the Treasury Department provided up to $7 million of public funds to the candidate's campaign. The indictment alleges that defendant Acevedo Vilá and his associates conducted unreported fund-raising and made unrecorded vendor payments for the 2004 campaign in order to raise and spend far more than the limited amount to which they had agreed. According to the indictment, one significant aspect of this fraud was to have Puerto Rico businessmen (described as collaborators) use large amounts of money from their personal or corporate funds to pay for large and unreported debts to the campaign's public relations and media company. Large sums of cash were also used to keep contributions and vendor payments concealed from the Treasury Department and the public. As further alleged in the indictment, for many of the collaborator payments the media company created fake invoices to make the payments appear to be legitimate business expenses of the contributors' companies. The indictment charges Jose González Freyre, one of these contributors, with falsely claiming that a $50,000 invoice was real and that bona fide services had been provided to his company in exchange for the payment, when in fact, the invoice was fake and the $50,000 payment was part of the unrecorded fundraising and expenditure scheme. In related illegal actions alleged in the indictment, Acevedo Vilá, aided by Inclán Bird, accepted numerous forms of personal income from funds related to his campaigns or official position, which he failed to report as required on his income tax returns.