MIAMI — Former Puerto Rico Gov. Wanda Vázquez was arrested Thursday morning on criminal corruption charges related to a bribery scheme in which she allegedly accepted donations to her political campaign in exchange for favors to a bank executive on the island.
Federal authorities said Vázquez had fired the head of a government office overseeing the island’s financial sector at the request of Julio Martin Herrera Velutini, the owner of Bancrédito, an international bank that operates in Puerto Rico, and former FBI agent Mark Rossini.
Officials said the pair promised to finance her 2020 gubernatorial campaign if she picked a replacement commissioner for the Office of the Commissioner of Financial Institutions of Puerto Rico, which was auditing Herrera Velutini’s bank at the time. Herrera Velutini, who is a dual Venezuelan Italian citizen, would choose the successor, officials said. Vázquez agreed, receiving over $300,000 for political consultants into a political action committee associated with her gubernatorial campaign, said U.S. District Attorney General for Puerto Rico Stephen Muldrow.
He added that Vazquez, who served as the island’s appointed governor from August 2019 to January 2021, is accused of crimes that happened between December 2019 and May 2020.
“Today’s charges, while certainly remarkable in many respects and unique in many respects, are yet another example of allegations of corporate corruption aimed at elected officials in the United States,” said Corey Amundson, chief of the U.S. Justice Department’s public integrity office in Washington, D.C.
“This is a disturbing national trend that is not limited to Puerto Rico. We have seen an increasing number of allegations about owners and executives of businesses in highly regulated industries: banking, insurance, utilities and others,” Amundson added during a press conference in San Juan.
Vázquez attended an initial court hearing in Puerto Rico’s federal courts Thursday, where a judge mentioned the charges she is facing, including conspiracy to commit an offense to defraud the United States government, federal program bribery, and honest services wire fraud. The former governor will have to surrender her passport and the judge issued an unsecured bail of $50,000.
Vázquez’s lawyer said he would submit her plea after the initial hearing. The island’s former top official could spend as much as 20 years in prison if convicted.
Leaving the federal court in San Juan, Vázquez declared herself innocent in front of a flurry of reporters. She said she had not committed “any crime, any irregularity.”
“They have committed a great injustice,” she said.
Muldrow said that two other people indicted in the scheme, Vázquez campaign adviser John Blakeman and Bancrédito president Frances Díaz, have already declared themselves guilty. Meanwhile, he added that Herrera Velutini is believed to be in the United Kingdom, and Rossini in Spain.
The 42-page, seven-charge indictment said that Herrera Velutini was a client of Rossini, an independent consultant who left the FBI around 2008. It also alleges that the commissioner picked through the bribery scheme, who Vázquez appointed in May 2020, had been an adviser for Herrera Velutini.
The accusation points to emails and text chains as well as several meetings as evidence of the alleged wrongdoing. The same day the old financial commissioner resigned, Vázquez met with Rossini, Blakeman, Díaz, and others at a hotel in the upscale, San Juan neighborhood of Condado in February 2020.
“With (the new commissioner), we have the banks and federal regulators calmed. This way I can dedicate time and money to her campaign,” Herrera Velutini allegedly texted Blakeman, Vázquez’s campaign adviser, days later.
But Vázquez lost her party’s primaries for governor in August 2020, and Herrera set his sights on Pedro Pierluisi after he won the general election. Pierluisi, who assumed office in January 2021, is identified as “Public Official A” in the indictment. The Justice Department made clear it was Pierluisi when it described “Public Official A” as Vázquez’s successor in a press release.
According to the indictment, the accused wanted Pierluisi to make decisions that favored Herrera Velutini and his San Juan bank. This included not having to alert authorities about suspicious activity regarding Herrera Velutini’s accounts, eliminating some OCIF employees from their posts, and ending the scrutiny on the bank. They allegedly made the bribes to someone they believed to be a Pierluisi intermediary and eventually wired $25,000 to a super PAC in August 2021.
But, it turns out the alleged mediator was part of an FBI sting operation. “He was not actually serving as an intermediary of, or acting on behalf of Public Official A,” the Justice Department clarified in a public release.
Muldrow also emphasized at the Thursday conference that Pierluisi, the current governor, was not involved in the alleged scheme. Pierluisi, who is from the same pro-statehood political party as Vázquez, has been repeatedly forced to publicly condemn corruption as the island’s government has been plagued by multiple federal criminal indictments involving government officials. Several were from his political party.
Pierluisi said that Vázquez’s arrest showed “no one is above the law in Puerto Rico.”
“Faced with this news that certainly affects and lacerates the trust of our people, I reiterate that in my administration we will continue to have a common front with the federal authorities against anyone who commits an improper act,” he declared, “... Under my Administration there is zero tolerance against corruption.”
Vázquez came to power in 2019 after former Gov. Ricardo Rosselló was ousted following the leak of an offensive chat of his inner circle, which ignited massive and historic protests on the island calling for his resignation. Vázquez was the third in the line of succession and initially said she was not interested in being governor.
She was the first unelected governor in the island’s modern history and only the second woman to hold the position. Pierluisi defeated Vázquez in their party’s primaries in 2021 when she tried to run for governor for the first time — the elections for which she allegedly committed corruption.
Vázquez faced several scandals during her term. Hurricane Maria relief found in a warehouse over two years after the storm hit caused an uproar as the island dealt with a series of devastating earthquakes. Another revolved around a $38 million purchase of COVID tests from a construction company, a deal that was eventually canceled.
Before becoming governor, Vázquez was the island’s Justice Secretary and led the Women’s Advocate Office, a local public agency in charge of defending women’s rights.
The news of Vázquez’s arrest comes after other recent arrests of Puerto Rican public officials and government contractors accused or convicted of corruption. In July, the finance director of the town of Toa Baja admitted to embezzling $2.5 million in federal housing funds. Only a week before, the ex-mayor of the town of Guayama had been sentenced to two and a half years in prison for taking bribes.
In June, the former mayor of Trujillo also pleaded guilty to accepting bribes, while the former mayor of the beach town of Rincon has sentenced and the former municipal public works director for the town of Cataño for the same crime.
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