Puerto Rico Non-Profit’s Tax Filings Raise Questions for Governor, Brother

Tax docs claim Garcia Padilla worked 40 hours a week at charity while also serving as a full time professor

Alejandro Javier Garcia Padilla,
Alejandro Javier Garcia Padilla / AP
January 29, 2016

Puerto Rico Governor Alejandro Garcia Padilla urged the public this week to ignore concerns about a corporate-funded charity that lists his brother as the sole employee, even as the media and ethics watchdogs have raised questions about the group’s finances and backers.

The Washington Free Beacon reported last week that corporations with business interests in Puerto Rico have been pouring money into a newly renamed non-profit group called the Sociedad Economica De Amigos Del Pais. The group’s governing director is Antonio Garcia Padilla, the brother of the embattled Puerto Rico governor, who earned $70,000 from the Sociedad Economica in 2014.

Governor Garcia Padilla came under fire in December after several members of his administration and his top fundraiser were indicted after a sweeping bribery and extortion probe. According to the indictment, the fundraiser leveraged his relationship with another brother of the governor in order to steer lucrative contracts to favored companies.

Earlier this week, Governor Garcia Padilla dismissed criticism of the Sociedad Economica, saying he had "no relationship" with the group, other than that he knew its board members and that it was run by his brother.

The governor also blasted the Free Beacon as "right wing," echoing a memo drafted last week by the lobbying group SKD Knickerbocker, which serves as the public relations firm for the Puerto Rico government.

SKD Knickerbocker, which told the Free Beacon that it was also hired last week by an official at the Sociedad Economica, has declined to respond to questions about the non-profit’s tax filings.

According to Sociedad Economica’s 2014 financial disclosures, Antonio Garcia Padilla worked 40 hours per week for the group and earned $70,000.

The 40-hour claim has raised eyebrows at the University of Puerto Rico, where Garcia Padilla serves as a full time law school professor.

The student council is calling on the administration to investigate whether Garcia Padilla violated law school faculty bylaws prohibiting full-time professors from working more than 12 hours per week for outside employers. They are also calling for an audit of other professors who hold outside positions.

"We are discussing this issue with the student council of the Law School," said Guillermo Guasp Perez, president of the UPR student council. "They are going to have their dean certify if this professor Garcia Padilla is complying with these bylaws or not."

University of Puerto Rico President Uroyoan Walker did not respond to a request for comment. Garcia Padilla also did not respond to request for comment.

The Sociedad Economica was founded a decade ago by former New York SEIU chief Dennis Rivera and former New Mexico governor Bill Richardson as a Hispanic legal rights group called the "Hispanic Education and Legal Fund." In 2014, the group changed its name to the "Sociedad Economica De Amigos del Pais" with the revised mission of "support[ing] economic development in Puerto Rico."

Garcia Padilla was named governing director in 2014. That year, the group received $275,000 in donations from a handful of top corporations in Puerto Rico—more than twice the amount it had received over the previous six years combined.

One of the group’s directors told the Free Beacon that the organization does not operate programs but instead works to attract corporations into doing business in Puerto Rico.

Sociedad Economica’s board secretary, Kathryn Wylde, said the group received free rent from Banco Popular, the largest bank in Puerto Rico and major donor to the Sociedad Economica. The head of Popular Inc., which owns the bank, sits on the Sociedad Economica’s board.

However, the Sociedad Economica listed over $30,000 in rent payments in its 2014 financial disclosures. A spokesperson for Banco Popular did not respond to request for comment about the rent payments.

The Sociedad Economica, under its previous name, the "Hispanic Legal and Education Fund," was allegedly used to funnel over $1 million to a charity run by former New Mexico Governor Bill Richardson that was said to be a "vehicle for kickbacks," the New York Post reported in November.

The group recently caught the eye of the National Legal and Policy Center, a watchdog organization that monitors government ethics issues.

"Anytime a non-profit close to a political figure gets major funding from companies or individuals who can benefit from the actions of that politician, it raises ethical red flags," Ken Boehm, chairman of the National Legal and Policy Center, told the Free Beacon last week. "When the non-profit also employs a family member of the politician, the situation raises improper influence or pay-to-play issues.  The public is entitled to complete transparency."