United We Stand Like so many other scandals in campaign finance land, it underscores the importance of transparency in our elections—and that, of course, traces back to Citizens United. According to U.S. authorities, the whole thing was driven by a single fugitive foreign banker, who exploited campaign finance laws in an attempt to bribe his way out of legal trouble. The banker, Julio Herrera Velutini, owns Bancredito, which in 2020 was the subject of a money laundering probe run out of the island’s financial regulatory agency. According to Justice Department prosecutors, Herrera Velutini tried to pay off not just one but two gubernatorial candidates in an effort to make the investigation disappear. He allegedly tried two separate schemes. Funnel Cake First, according to a DOJ announcement last week, Herrera Velutini teamed up with a former FBI agent to illegally funnel about $300,000 to support then-Gov. Wanda Vazquez’s reelection campaign. In exchange, prosecutors say, Vazquez agreed to fire the head of the agency investigating Bancredito and replace him with a successor hand-picked by Herrera Velutini. In May 2020, she did exactly that—which prosecutors allege was keeping her end of the bargain. (Vazquez pleaded not guilty and denies any wrongdoing.) The former FBI agent—who was also charged—worked on the Vazquez campaign at the time, and allegedly coordinated the bribes with outside political consultants. Crosby, Stills, and Cash That consulting firm, according to Channel 4 News, is a subsidiary of the Crosby Textor Group. That’s the company belonging to U.K. political consultant Sir Lynton Crosby, top strategist for former prime minister Boris Johnson. The report also found that Herrera Velutini donated half a million pounds to Britain’s Conservative Party, through Britannia Financial, his London-based firm. But the $300,000 reportedly went to CT Group’s U.S.-based subsidiary, CT Global. It was, the indictment said, understood by Vazquez and her campaign as an in-kind contribution from the banker to support her re-election. It’s illegal for foreign nationals like Herrera Velutini to contribute to U.S. elections. Super Soaker As part of the scheme, the indictment says, Herrera and the former FBI agent created a super PAC, which would give the appearance of distance from the Vazquez campaign. They hired “Political Consultant A” to register that Super PAC with the Federal Election Commission, which the indictment alleges happened on April 8, 2020. FEC data shows only one super PAC registered with the FEC on that date, a group called “Prosperity Through Leadership PAC.” And the PAC’s statement of organization gives a contact email for the law firm belonging to David Langdon—a GOP attorney who has been called the dark money “phantom.” (The unnamed consultant was not accused of wrongdoing.) The FEC allowed the super PAC to terminate last month, after reporting no activity; Vazquez was arrested the next week. But all that work didn’t pay off. The Wrong Dog Vazquez—a Trump-endorser who in 2019, as secretary of justice, had inherited the governorship upon the resignation of the previous governor—was hounded by controversy and lost her primary. So Herrera moved on and, prosecutors say, tried to bribe the winner, Pedro Pierluisi, who was eventually elected governor. Enter the second super PAC—and cue Citizens United. Salvemos and Loan Herrera’s allegedly illegal second round of donations went to a super PAC created to support Pierluisi, called “Salvemos a Puerto Rico.” The super PAC and its founder both pleaded guilty in May to illegally concealing the true sources of about $495,000 in donations. To do this, the founder exploited an upshot of the Citizens United ruling. That decision allowed nonprofits to give unlimited amounts of money directly to super PACs, thereby creating a path for donors to give massive sums anonymously—with the nonprofit passing their donations to the super PAC. Going Dark The “Salvemos a Puerto Rico” founder pleaded guilty to using two of these “dark money” nonprofits to illegally conceal money going to the super PAC, including the Herrera Velutini contribution. He faces up to five years in prison, and his super PAC paid a $150,000 fine—with donor money. One of those donations was an alleged $25,000 bribe from Herrera Velutini, which according to the DOJ was made in 2021 “with the understanding and expectation” that Pierluisi (identified in filings as “Public Official A”) would end the investigation into Bancredito.
A week after the guilty plea in the super PAC scheme, the Puerto Rican government began the process of liquidating Bancrédito after finding it had violated money laundering regulations.
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