PR governor, four Philadelphians charged

Puerto Rico's governor and four Philadelphians, including prominent fund-raiser Robert M. Feldman, were charged this morning in San Juan with federal campaign-finance related crimes.

The investigation of Gov. Anibal Acevedo-Vila, a Democrat who faces re-election this year, was triggered by the FBI's Philadelphia City Hall corruption probe in 2003.

The governor was charged with conspiracy to violate federal campaign laws, wire fraud, conspiracy to defraud the IRS and filing a false tax return.

In a statement issued this morning, Acevedo-Vila proclaimed his innocence and said the indictment was politically motivated to harm him.

"I want to assure the people of Puerto Rico that I have never solicited or accepted a donation in exchange for a government contract, have never permitted misuse of funds or acted illegally," the governor said.

"I know several of the accused very well and am convinced that they have never accepted a bribe or stolen a cent," Acevedo-Vila said.

But Luis Fraticelli, Special Agent in Charge of the FBI's San Juan Field Office, said, "Our democratic system cannot function when public officials act as though they are above the law.

Feldman, who raised more than $1 million for Democrats, including U.S. Sen. Bob Casey Jr. and Gov. Rendell, was a former business partner of Ronald A. White, the late power-broker who was the lead defendant in the Philadelphia corruption case.

In the Philadelphia case, Feldman was not charged. In San Juan, he was charged with one count of conspiracy to violate federal election laws.

Feldman and others from Philadelphia were charged with conspiring to help Acevedo-Vila evade federal election rules to raise more than $100,000 in campaign funds as a way of gaining access and "to further their business interests" in Puerto Rico.

The indictment says that shortly after Feldman helped with a fund-raiser in Philadelphia in 2002, Acevedo-Vila contacted a Puerto Rico government agency to request a meeting on behalf of a company associated with Feldman. Authorities also say Acevedo-Vila set up a second meeting with an island housing agency on Feldman's behalf in 2003.

The indictment says that it was Feldman who came up with the idea of skirting campaign-finance laws by funneling cash to Acevedo-Vila through others in Philadelphia and South Jersey.

Feldman's lawyer, Henry Hockeimer, said this morning in a statement: "Mr. Feldman did nothing wrong. We are shocked and disappointed that the U.S. Attorney in Puerto Rico included Mr. Feldman in one count of this 27-count, 13-defendant, politically-inspired indictment. We are very confident Mr. Feldman will be vindicated at trial."

The case could have political ramifications beyond Philadelphia and San Juan. Acevedo-Vila has endorsed Sen. Barack Obama in the Puerto Rico primary, which holds the nation's last primary on June 6.

In addition, some of the governor's allies in Congress have tried to link it to the national U.S. attorneys scandal, alleging a partisan investigation. The Justice Department has said it prosecutes crime where it finds it.

The federal indictment of Acevedo-Vila, Feldman and others was unsealed in San Juan this morning. A morning press conference is scheduled in San Juan.

Acevedo-Vila was expected to surrender to federal authorities and appear before a federal magistrate in San Juan later today.

Among the four Philadelphians charged, in addition to Feldman, is Feldman's fellow-fundraiser, Candido Negron of Glen Mills, Delaware County. Also charged were Philadelphians Marvin Block and Salvatore Avanzato Sr. All three are charged with conspiracy to violate federal election laws.

The FBI's investigation of Acevedo-Vila began during its Philadelphia City Hall corruption probe in 2003, which focused on White and then-Mayor John Street and his top aides.

In 2003, FBI wiretaps recorded Feldman and Negron working closely with powerbroker Ronald A. White on deals.

White became the lead defendant in the City Hall case, charged with corrupting former City Treasurer Kemp and conspiring with Commerce Bank executives to win sweetheart deals for his clients. Kemp and the bankers were convicted, and Kemp was sentenced to 10 years in prison.

White died of cancer before trial, but wiretaps and other evidence in the case spawned other investigations, including the one bursting into the limelight today in Puerto Rico.

Feldman was White's partner and a superstar fund-raiser for many Democrats. In addition to Rendell and Casey, Feldman raised nearly $500,000 for Street. He was the second-most proficient fund-raiser for former New Jersey Gov. James McGreevey.

Negron considered Feldman a mentor, and together they raised at least $50,000 for Acevedo-Vila at two Philadelphia campaign events. At the time, Acevedo-Vila was seeking re-election as Puerto Rico's non-voting delegate to Congress.

Of the $800,000 Acevedo-Vila raised during that campaign, $180,000 of it came from donors in Philadelphia and South Jersey, a percentage that authorities found suspicious.

In 2006, three contributors to that campaign told The Inquirer that Negron gave them money to make the contributions.

The 55-page indictment charges 13 people; four in Philadelphia and nine in Puerto Rico, including the governor.

The charges are related to Acevedo-Vila's 2000 and 2002 campaign for Resident Commissioner, Puerto Rico's non-voting delegate to the U.S. Congress.

According to the indictment, Acevedo-Vila carried a $545,000 debt following the 2000 campaign and Feldman was Acevedo-Vila's "United States finance chairman." Negron was deputy finance chairman.

Negron's cousin, Jorge Velasco Mella, worked in Acevedo-Vila's San Juan office while Acevedo-Vila was in Congress. Block worked with Feldman. Negron and Avanzato were business partners in a dental firm.

"It was an object of the conspiracy to knowingly and willfully solicit and receive illegal contributions for the candidacy of Acevedo-Vila," the indictment said.

"It was a further object of the conspiracy to conceal from the Federal Election Commission and the public the illegal nature of the contributions and the true extent and nature of the relationship between defendants Feldman, Negron and Avanzato and their associates and Acevedo-Vila, including the access and influence that Acevedo-Vila afforded and exercised on their behalf in Puerto Rico."

The indictment says the four Philadelphians solicited and received "straw-contributions" - to skirt campaign finance contribution limits, they reimbursed others for donations made to Acevedo-Vila.

Negron and Avanzato "directed their employees, friends and family members to give campaign contributions" and then "reimbursed" them for the donations, according to the indictment.

Negron and Avanzato allegedly used corporate bank accounts and credit cards to disguise the payments, and, the indictment said, paid for "lavish dinners" for Acevedo-Vila.

The indictment says the governor "personally participated in the solicitation, receipt and recording of campaign contributions from Feldman, Negron and Avanzato."

After the FEC raised concerns that some Philadelphia donors had contributed amounts higher than the $2,000 federal limit, Acevedo-Vila's campaign refunded the money directly to Negron--and not the contributors, according to the indictment.

Inquirer special correspondent Susan Anasagasti Akus contributed to this report.