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| Banco Popular in San Juan |
California-based
SEIU-UHW contributed $25,000 to a group at the center of an alleged
influence-buying scheme linked to Puerto Rican governor Alejandro García Padilla, according to records obtained from two
federal agencies.
Why did SEIU-UHW
President Dave Regan give $25,000 of
his members’ money to a Puerto Rican organization that’s co-financed by a
massive hedge fund and the island’s largest bank… and which allegedly funneled
money to the Governor’s brother for a no-show job?
The answer apparently
lies with Dennis Hickey Rivera.
Rivera -- who
was the president of SEIU
1199NY and is now a “Senior
Advisor” to SEIU President Mary Kay
Henry -- is closely associated with the Puerto Rican governor and his
political party, the Popular Democratic
Party.
Rivera reportedly
set up the organization that’s at the center of the alleged influence-buying
scandal -- the “Sociedad Económica de
Amigos del País” (SEAP) -- by using the shell of a nonprofit corporation he
previously established in New York.
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| SEIU's Dennis Rivera |
What does
SEAP do? And who funds it?
Here’s where
the story gets interesting.
According to
its website, SEAP seeks “to support economic development in the Commonwealth”
by “bringing investment and creating jobs in Puerto Rico.”
However,
critics allege that the organization is a tool for corporations to buy
influence with the governor. They point to the organization’s funding sources
and its payouts to the governor’s brother to back their claims.
In 2014, a
majority of SEAP’s funding -- $200,000 of its total $275,000 -- came from just
three corporations: Banco Popular
(Puerto Rico’s largest bank), St. James
Security, Inc. (a security firm that holds contracts with the Puerto Rican
government), and Putnam Bridge Funding
(a hedge fund operated by its billionaire CEO, Nicholas Prouty,
which has made huge bets on Puerto Rican real estate).
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| Excerpt from SEAP's federal tax return for 2014 indicating some of its sources of funds. |
Banco
Popular’s CEO Richard Carrion serves
as the Chairman of the SEAP’s Board of Directors while SEIU’s Dennis Hickey
Rivera is the Vice Chairman, according to the organization’s website
and federal tax returns.
Another
member of the organization’s board is Miguel
Ferrer, former Chairman of UBS
Financial Services Inc., which in 2012 paid a $26.6 million penalty to the
U.S. Securities and Exchange Commission (SEC) to settle allegations that it misled
customers and engaged in fraud, according to Reuters.
What about
the governor’s brother?
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| The Puerto Rican governor and his brother, right. |
Curiously, SEAP
has only one staff member -- the governor’s brother, Antonio García Padilla.
He’s a
full-time professor at the University
of Puerto Rico… but he nonetheless was paid $70,000 over 11 months by Rivera’s
nonprofit organization to serve as the organization's full-time Executive Director, according
to SEAP’s 2014 tax returns.
What role has
SEIU-UHW President Dave Regan played in the scandal?
In 2014,
SEIU-UHW was SEAP’s fourth-largest contributor, according to SEAP’s federal tax
returns.
SEIU-UHW’s annual filing with the US Department of Labor confirms the
union’s $25,000 contribution to the group (see excerpt immediately below).
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| Excerpt from SEIU-UHW's US DOL Form LM-2 for 2014 |
Now… it doesn’t
take a rocket scientist to understand why corporations would want to buy
influence with the governor. But why did SEIU-UHW contribute to SEAP, which is located
some 4,000 miles away?
Tasty’s
sources say it was part of an effort by SEIU-UHW’s Regan to buy influence
inside SEIU’s DC headquarters during his battle against SEIU
President Mary Kay Henry.
Regan
delivered the $25,000 to Rivera in July of 2014 as Regan was sharpening his
attack against Henry. Only five months later, Henry and SEIU’s International Executive Board approved
a resolution ordering the transfer of 65,000 members of SEIU-UHW’s members
to a separate SEIU local union controlled by one of Henry’s allies, Laphonza Butler.
According to
Tasty’s sources, Regan’s donation of $25K to Rivera’s organization was intended
to curry favor with Rivera, who works inside SEIU's headquarters and also has great influence with leaders of 1199NY, the largest and most
powerful local union inside SEIU.
Interestingly, the scandal
surrounding SEAP comes just months after another influence-buying scandal
involving another brother of the Governor.
In December,
the FBI arrested
10 businessmen and Puerto Rico officials in the first scandal.
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| Press coverage of scandal with Gov's first brother |
Anaudi Hernández Pérez -- a
businessman, political fund-raiser, and the head of campaign finances for the
governor’s party -- allegedly used his relationship with the governor’s second
brother (Luis Gerardo García Padilla)
to steer government contracts to corporations that, in turn, lined Hernández
Pérez’s pockets.
The government then paid the corporations for contract work they
never actually performed, thereby lining the businessmen’s pockets with cash, according
to a 25-count
indictment handed down by the US Attorney’s Office.
On June 24, Hernández
Pérez faces sentencing of up to six years after pleading
guilty to 14 corruption charges. He also agreed to forfeit his $4 million
home in Puerto Rico. Meanwhile, the governor has announced he will not run for
another term of office.
Smart move.
SEIU and
Dennis Hickey Rivera have a long and dirty relationship with the governor’s
party, the Partido Popular Democratico or "Popular Democratic Party."
In 2008,
SEIU used its cozy relationship with the party and then-Governor Anibal Acevedo Vila to try to
eliminate one of Puerto Rico’s largest and most militant unions, the Federacion de Maestros de Puerto Rico
(FMPR), and replace it with SEIU as a “company union” that would do the
governor’s bidding, according to reporting
by Juan Gonzalez at the New York Daily
News.
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| Puerto Rican teachers confronting SEIU's 2008 convention |
The current
SEAP scandal underscores SEIU will officials' cozy relationships with the captains of big
business, including the hedge funds, banks, and real estate corporations that have
played an outsize role in the economic crisis affecting Puerto Rico and the
United States.
More news to
follow in the days ahead.
Here's a full copy of SEAP's federal tax return for 2014, which includes disclosure of Regan's $25,000 contribution to SEAP on page 22.
