Latinnews Archive
Caribbean & Central America - 6 November 1986
Scandal hits ruling PDP;ROMERO STARTS HIS BID FOR LEADERSHIP OF OPPOSITION
Governor Rafael Hernandez Colon and his ruling Popular Democratic Party (PDP) are confronted with what could be a scandal, already under investigation by the US justice department. Girod Trust Co, a San Juan investment firm whose top officials are known to have close links with the PDP, sold to the party, then out of power, US$700,000 in certificates of deposit between 1982 and 1984. Certificates of deposit for US$375,000 of that amount, endorsed by Hernandez Colon as party president, would up in a Panama investment firm, a highly unusual location for a Puerto Rican political party to send its funds.
Girod 'followed orders'
Alberic Girod, the firm's president and PDP finance committee chairman at the time, has said in a court deposition that he was told by the party to send the funds to Panama. But other PDP officials have denied knowledge of the transfer of the funds.
The opposition New Progressive Party (NPP) has charged that the funds transfer was clearly a violation of both US and Puerto Rican electoral laws, and NPP officials, predictably, have raised the possibility that Hernandez Colon sought personally to profit by ordering the US$375,000 to be hidden in Panama. Just as predictably, Hernandez Colon responded by accusing the NPP officials of 'smear tactics' and of 'pressing' the US justice department to investigate the PDP's financial dealings with the Girod Trust.
Whether pressed or not, the US justice department has asked a grand jury to investigate possible violations of federal electoral laws, including the relationship between Girod Trust and the PDP; federal officials would only say that the investigation is looking into bank fraud and election irregularities.
Details of the Girod-PDP relationship began leaking from a related federal investigation which began when Girod Trust went bankrupt two years ago. Subsequently, the Federal Deposit Insurance Corp filed suit against the firm to recover funds lost when Girod closed its doors. The same grand jury that is investigating the PDP's handling of campaign funds is also looking into Girod's financial transactions.
Opposition: Romero is back
On the face of it, the NPP and especially party president Baltasar Corrada del Rio, the mayor of San Juan, should be able to take full advantage of the PDP's embarrassment. But the NPP is wracked by its growing internal problems caused by a re-emergence of former governor Carlos Romero as a political force.
Romero was governor from 1976, to be soundly defeated in 1984 by Hernandez Colon. But instead of adopting an elder statesman role, Romero has worked constantly behind the scenes, criticising Corrada publicly and privately, and apparently hoping to win once again the NPP gubernatorial nomination in 1988.
Corrada, who earlier had seemed a certainty to win the nomination himself, is no longer a sure bet. Given Romero's still sizable following within the NPP, Corrada, in the interests of party unity, has been forced to remain silent when confronted with Romero's challenge.
Any remaining doubt about Romero's intentions was eliminated when the former governor declared his candidacy for an NPP senate seat, vacant through retirement. Two other aspirants for the seat immediately withdrew and Romero is now a senator, a position which should give him full exposure in his revived ambitions for another term as governor.
Return to top