For 1999-2000 data: Summary Soft Money

CAMPAIGNS GOT BIG BOOST FROM PUERTO RICO

Author: By Bob Hohler, Globe Staff

Date: 03/01/1998 Page: A1

Section: National/Foreign

The Caribbean hotspot, whose leaders were seeking a vote on self-determination after nearly a century as a US territory, generated a remarkable $2.75 million in contributions for federal campaigns beyond the island, including more than $1 million for President Clinton's reelection effort and nearly $280,000 for the three Kennedys in Congress.

Now, Puerto Rico's leaders are closer to their goal.

With Clinton's endorsement and the backing of many lawmakers who reaped substantial donations from Puerto Rico, a contentious bill that would permit the island's citizens to vote this year for statehood, independence, or continued territorial status is scheduled for House action on Wednesday.

Although nearly 60 percent of Puerto Rico's 3.8 million residents remain below the federal poverty level, the Democratic Party and Clinton's reelection campaign handily raised a combined $1.2 million in 1995 and 1996 on the island, which is heavily Democratic.

And no politician raised more money in Puerto Rico in 1995 and 1996 than Senator Edward M. Kennedy, who was reelected in 1994 and does not face another race until 2000. Kennedy collected $93,800 for his own campaign and $95,000 for the Committee for a Democratic Majority, which largely exists to fund his political travels to support other Democratic candidates. Most of the money for Clinton's reelection had been funneled through the Democratic National Committee.

Kennedy's son, Representative Patrick J. Kennedy of Rhode Island, followed the family trail to Puerto Rico, raising $42,500 on the island for his 1996 campaign. And Senator Kennedy's nephew, Representative Joseph P. Kennedy II of Brighton, collected $47,000.

``The political community in Puerto Rico has supported the Kennedy family since the time of President Kennedy,'' said Senator Kennedy's spokeswoman, Kathy McKiernan.

All three Kennedys have favored allowing Puerto Rico to determine its political future. The referendum, which some lawmakers have vowed to block in the House, would be Puerto Rico's first vote on self-determination officially sanctioned by the White House and Congress since the United States seized the island colony from Spain in 1898.

Emotions already are running high. ``We have added 100 years to the longest running colony in the history of mankind, and we ought to do something about it,'' said Representative Jose E. Serrano in a House speech last week that foreshadowed the pending debate. Serrano, a New York Democrat, emigrated from Puerto Rico.

However, Puerto Ricans had more at stake than self-determination in their massive outpouring of campaign contributions.

A review of Federal Election Commission records showed that Puerto Rican donors with major interests in government policies as diverse as Medicaid spending and building contracts contributed hundreds of thousands of dollars to influential Washington politicians in both major parties.

All told, more money flowed into the campaign finance system from Puerto Rico, whose residents cannot vote for president, than flowed from many states, including Alaska and Hawaii.

Moreover, many Puerto Ricans were savvy about their giving. In total, they contributed more than $1 million in unlimited and unregulated donations known as soft money, which fund-raisers for both parties craved for the 1996 elections.

Indeed, Puerto Ricans contributed nearly as much soft money in 1995 and 1996 as residents of New Hampshire, Maine, and Vermont combined.

Also, millions of dollars were donated by political action committees for businesses that benefit from special tax breaks on the island.

Clinton, speaking last week at a Democratic Governors Association fund-raising dinner, expressed his support for Puerto Rico's vote on self-determination.

``We have made Puerto Ricans citizens,'' he said. ``We have drafted them into the armed forces. We extend most laws to them, especially those that are convenient to us. To use their culture, but to bar them from voting rights and responsibilities in our country, if they choose to seek them by majority vote, is wrong.''

Much of the Democratic money that flowed from Puerto Rico was generated by fund-raiser Miguel Lausell, a San Juan lawyer. Lausell and his wife, Marisol, also contributed $126,000 to Democratic committees and candidates, including $1,000 to Senator Kennedy.

The Republican Party did not fare as well as the Democrats, raising a total of $210,000 in contributions in 1995 and 1996.

Yet, two GOP candidates for the presidential nomination ranked second and third to Senator Kennedy among the top individual recipients. Bob Dole collected nearly $132,000 from Puerto Rico, and former Tennessee governor Lamar Alexander took in nearly $106,000.

Notable among the Republican donors was Eduardo Lopez Ballori, who with his wife, Conchita, and his advertising firm gave about $21,000 to GOP committees and candidates, including $1,000 to Dole.

In 1991, a federal judge in New York cleared Lopez Ballori of felony charges stemming from his secret reimbursement to friends, relatives, and business associates for $75,000 in political contributions. Much of the money went to Senator Alfonse M. D'Amato, a New York Republican, and some went to Dole.

In court, Lopez Ballori's lawyers acknowledged the secret reimbursements but prevailed in their argument that he did not knowingly cause federal records to be falsified. Lopez Ballori went on to serve in Dole's 1996 campaign.

Meanwhile, the Democratic Party had a notable Puerto Rican donor in its ranks. Ruben Lebron Velez, who contributed $127,250 for the 1996 elections, became briefly embroiled in controversy last year after the White House released a videotape that showed him trying to give a handful of checks to Donald Fowler, chairman of the Democratic National Committee, in the executive mansion in 1995.

Fowler asked Lebron Velez, who apparently was unaware of the law against making campaign contributions on federal property, to hold the checks until after they left the White House. But the incident raised questions about whether Lebron Velez, who owns one of Puerto Rico's largest building companies, was seeking special treatment for a land deal in San Juan that required approval from the Department of Housing and Urban Development.

HUD granted tentative approval for the deal two months after the White House meeting. But after Andrew Cuomo became HUD secretary last year, he withdrew the tentative approval, citing the deal as a bad investment for the government. The White House and Lebron Velez denied any wrongdoing.

Still, the contributions from Lebron Velez were dwarfed by those of Puerto Rico's largest individual donor, Dr. Richard Machado Gonzalez. A hospital owner, Machado Gonzalez distributed $260,100 to Democratic committees and candidates in 1995 and 1996, including $5,000 to Kennedy's leadership fund.

Machado Gonzalez and his lawyer, Lausell, had a keen interest in how the federal government disbursed Medicaid funds to the hospitals that Machado Gonzalez owns in Puerto Rico.

No one has alleged they engaged in any wrongdoing. Like many top Democratic donors, Machado Gonzalez and Lausell won perks enjoyed by few others. They twice were invited to have coffee with Clinton at the White House.

Candidates

Former Senate Majority Leader Bob Dole $131,950

Former Tennesee Governor Lamar Alexander $105,850

Senator Edward M. Kennedy, D-Mass. $93,800

President Clinton/Vice President Al Gore $57,500

Senator Robert G. Torricelli, D-N.J. $56,400

Senator Phil Gramm, R-Texas $50,000

Representative Joseph P. Kennedy II, D-Brighton $47,000

Representative Patrick J. Kennedy, D-R.I. $42,500

Senator Tom Harkin, D-Iowa $42,500

Representative Richard A. Gephardt, D-Mo. $40,000

Committees

Democratic National Committee $963,900

Republican National Committee $118,400

Committee for a Democratic Majority $95,000

(Controlled by Senator Kennedy)

Democratic Senatorial Campaign Committee $90,750

Democratic Congressional Campaign Committee $87,250

National Republican Senatorial Committee $66,800

National Republican Congressional Committee $25,650

A soft-money sampler

More than $1 million in unlimited contributions known as soft money was donated by individuals and businesses in Puerto Rico to political committees on the American mainland for the 1996 elections. The total far exceeded the soft-money donations from many states, including Alaska and Hawaii. The list below contrasts Puerto Rico's soft-money donations with the total contributions from a sampling of states.

Puerto Rico $1,041,350

New Hampshire $736,750

Rhode Island $563,500

Maine $193,400

Alaska $154,190

Vermont $140,225

Hawaii $94,050

SOURCE: Federal Election Commission, Globe staff

Globe staff chart

HOHLER;02/27 NKELLY;03/02,10:06 PUERTO01