7
How Ramon Velez Bleeds New York: Señor Big
December 31, 1985
THE SOUTH BRONX’S LEGENDARY public sponge, Ramon Velez, is once again New York’s most powerful Puerto Rican. Though Velez hasn’t held elective office since he lost his city council seat in 1977, he’s rebounded from the scandals that dogged him then and is back as the city’s undisputed king of salsa poverty. During his almost 20 years of influence, the South Bronx has become the nation’s poorest congressional district, with infant mortality and unemployment rates that would shame Caracas. At the same time, Velez, with a yearly income of at least $221,000, has become the nation’s richest poverty plutocrat.
Velez’s power is rooted in the $16 million annual budget of the dozen community groups he controls, his personal ties to the White House and City Hall, his interlocking interests with the businessmen who run Bronx Democratic and Republican politics, and his dominance of the community’s premier showcase event, the Puerto Rican Day Parade. His supportive role in the recent Reagan and Koch campaigns, as well as his endorsement of the narrowly reelected Bronx borough president Stanley Simon over Latin assemblyman Jose Serrano, have now placed Velez at the head of the postelection receiving line, an old-style ward leader poised for a quantum leap in his poverty profits.
Velez was one of a hundred guests invited to the first official state dinner at the White House after the 1984 election (honoring the visiting Grand Duke of Luxembourg, a ruler whose kingdom is half as populous as Velez’s). Kathy Villaponda, the White House liaison to the Hispanic community until she recently resigned, said Velez had been to the White House “several times” and was included in briefings with the president. Steve Taracido, chairman of the Republican National Hispanic Assembly, said that Velez sponsored a Bronx rally for the Republican ticket in 1984, did commercials and appearances on Spanish television, and was one of 16 members of the National Steering Committee of Democrats for Reagan/Bush. “Ray is very much involved in Republican politics at all levels,” said Taracido, noting that Velez, who controls several Bronx Democratic district leaders, is still a registered Democrat.
When a mudslide killed hundreds in Puerto Rico this October, Ed Koch, Velez’s other prime political ally, called a press conference, announced the formation of a relief committee, and named Velez to head it. The mayor hugged Velez three times during that press conference, extending those remarkable dangling arms of his around the largest bellyful of antipoverty gluttony in the nation, shamelessly forgetting his own 1977 campaign denunciations of Velez as a “poverty pimp.” Velez took full advantage of the moment, asserting that Koch had designated him “the deputy mayor for Puerto Rican affairs” and noting that no prior mayor had ever so honored him, a proclamation of his own rehabilitation. At the start of Koch’s first term in 1978, the administration cut off millions in funding to two Velez-controlled antipoverty groups, the Hunts Point Community Corporation and the Puerto Rican Community Development Project, based on “evidence of possible fiscal fraud.” While several Velez associates in these programs were successfully prosecuted, federal and state authorities probed Velez for years without indicting him.
Velez runs the city’s largest individually controlled empire of housing, day care, mental health, drug, alcoholism, economic development, home attendant, and senior citizen programs as if they were McDonald’s franchises, taking a slice of the public subsidy from each for himself. In a 1984 filing with the state attorney general’s office, he reported collecting $209,000 in salary and pension as president of the city-funded Hunts Point Multi-Service Center. He has yet to report his 1985 income, but his salary jumped from $47,000 to its 1984 level in just two years. Though the city pays this salary and the tab for most of the programs Velez administers, neither the Human Resources Administration nor the mayor’s office could come up with a résumé for him or even tell the Voice if he is a college graduate (his mother told me he is not). He drives a 1985 Buick registered to the South Bronx Community Management Corporation, a housing group he chairs that has an annual $1.4 million contract to maintain city-owned buildings. The woman he lives with is the director of another Bronx poverty program and drives a Volvo registered to the Multi-Service Center.
In addition to his Hunts Point salary and perks, Velez draws an estimated $12,000 in $1,000-a-meeting stipends for chairing two South Bronx companies that receive funding from Bronx Venture Corporation, a nonprofit consulting company with government contracts that Velez also chairs. Not satisfied with these bloated earnings, he’s become an antipoverty entrepreneur, setting up for-profit development corporations that are now busy collecting enough government projects to make him a one-man free-enterprise zone. He has put his entire empire on a computer and pays an accountant six figures in public dollars to keep the books for the dozens of corporations he runs.
A month-long Voice investigation of Velez has uncovered startling new facts about his assets, business partners, and personal life. The highlights of the Voice findings are:
• Velez has amassed a real estate empire here and in Puerto Rico worth over a million dollars and including at least 16 properties. Four Velez condos are located on the Condado, the most expensive beach land in San Juan. While the 450,000 people of the South Bronx still await that neighborhood’s revitalization, Velez has sunk a fortune, largely taken from his earnings there, into luxury development a thousand miles away.
• Velez has compromised the heart of the city and state redevelopment effort in the South Bronx by becoming a secret partner in a private real estate deal with the city’s top planner in the South Bronx, Jorge Batista. The two became partners a month after the mayor appointed Batista president of the South Bronx Development Organization early this year. Batista’s state- and city-funded $3 million agency is charged with renewing the blighted neighborhood. Despite his conflict-of-interest business ties with Velez here and in Puerto Rico, Batista’s SBDO is aiding Bronx projects sponsored by Velez and a third partner in these private deals, longtime Velez associate Frank Lugovina. Since assuming the presidency of SBDO, Batista has also quietly become a director in Lugovina’s development corporation, which is currently involved in several joint projects with Velez.
• In February, Velez divorced his wife of 15 years, Caroline Velez, and married the 25-year-old Osana Chacon Rios in a private ceremony in San Juan. He left his new wife there, returned to New York, and resumed living with his former wife, Caroline. Caroline still makes frequent public appearances with him, sat at his side on the reviewing stand of the Puerto Rican Day Parade in June, and was photographed with Velez and the mayor at a scholarship dinner-dance months after the divorce. The divorce and marriage papers were filed in small towns outside San Juan, where they were less likely to attract public attention.
Velez’s closest associates in New York were not told of the divorce. Neither was Velez’s mother, whom we interviewed in his hometown of Hormigueros. Caroline Velez signed the divorce papers and was given sole ownership of their 10 condominium apartments in San Juan. However, the new wife, Osana Chacon, who has since given birth, uses at least two of these condos and has helped rent one of the others to a tenant. Chacon’s brother, Jose Chacon, was hired this year to manage the new Felisa Rincon de Gauthier Houses in the South Bronx, an $8.4 million, 108-unit federal housing project sponsored by the Hunts Point Multi-Service Center. (Various Bronx public payrolls have long carried both children from Velez’s first marriage, his brother, and other family members.)
• Velez owns a gutted, unsealed, three-story building at 425 East 141st Street in the Bronx, which he bought in his own name from federal housing authorities in 1979. The building, located next to a church and on an otherwise viable block just a few doors from a junior high school, appears to be a shooting gallery for Bronx junkies. Dealers openly sell drugs in front of the building. Another Bronx property Velez has owned since 1979—a four-story occupied tenement, at 3196 Third Avenue—has 22 code violations, as well as frequent heat and hot water problems. One pregnant tenant, nervous about the safety of her soon-to-be-born child, said her apartment is overridden with mice and rats. Though Velez signed a stipulation in the divorce proceeding saying that all properties he acquired during the marriage would be listed and divided, he did not report at least these two properties and the Bronx home he and Caroline have been living in since 1973. Velez owns this property in his own name alone.
• Though barred by a standing 1977 court order from any association with the Puerto Rican Day Parade, Velez practically owns it. A state judge directed Velez to dissociate himself from the parade because he was caught dipping into its half-million-dollar till for personal loans. But Attorney General Robert Abrams, who is charged with enforcing the court order, has taken no action, even though Velez has openly presided as chairman of the parade’s fund-raising banquet at the Grand Hyatt, accompanied the parade’s executive committee on a promotional tour of Puerto Rico, and positions himself annually in the front-row-center spot of the reviewing stand. Abrams’s office says they are now investigating these violations, but they have not audited the parade’s books since Abrams took office in 1978.
In 1984 Velez got the parade committee to dedicate the parade to Dr. Ronald Bauer, the first non–Puerto Rican ever so honored, even though Bauer’s World University in Puerto Rico had already been shaken with the scandal that has since resulted in its closing. Bauer had previously given Velez an honorary doctorate that the 52-year-old Velez wears as if he’d earned it. The General Accounting Office accused Bauer of pocketing $2,000 a month in expense money, taking $544,613 in Veterans Administration payments for veterans who weren’t at the school, and transferring $9.4 million in federal funds to affiliated schools in three countries—most of which went bankrupt. Three university administrators were charged with 67 counts of grand larceny, but Velez now chairs an island-based committee that is trying to get the university reopened with Bauer at the helm.
• Despite his awesome public earnings in New York and his prominence in city government and politics, Velez claims to be a bona fide resident of Puerto Rico. He and Caroline swore in the divorce documents that they’d been residents for at least a year, the legal minimum to qualify for a divorce there. While Velez has neither a New York driver’s license nor an automobile registered to him here, he has both in Puerto Rico, using addresses at opposite ends of the island. He’s also had a gun permit in Puerto Rico since 1979, which was granted him on the basis of his claim that he is the head of a household living in San Juan. Sources close to Velez says he goes to Puerto Rico approximately once a month.
There is a full federal tax exemption on at least that portion of a resident’s income earned in Puerto Rico, as well as tax breaks for residents that can reduce the tax liability on their New York income. There are also possible local tax advantages available to residents. Because of the confidential nature of tax returns, it is unclear whether Velez has taken advantage of these breaks.
The only legal evidence of his Bronx residence is his voter registration card, which says he lived for eight years at 648 Jackson Avenue, a tenement building located next to the Hunts Point Multi-Service Center. Several tenants told the Voice that a young woman has lived alone in the apartment Velez is registered to vote from for at least a year, and that another tenant, also not Velez, lived there before her. Half a dozen tenants who know Velez by sight, some of whom say they’ve seen him going in and out of the Multi-Service Center, say he doesn’t live in the building. “I’ve never seen him in here, and I’ve lived here 11 years,” says Carmen Marcano, who lives a floor below Velez’s claimed apartment. Caroline Velez has used the address of Velez’s political club as her voting address for years (her antipoverty program is located on the second floor of the same building). Neither is registered at 326 Swinton Avenue, their Throgs Neck home far from the impoverished neighborhood he dominates.
A Reliable Autocrat
These charges have surfaced at a time when Velez is beginning to break into economic and housing development projects in the South Bronx at a megabuck level. The resourceful opposition of former South Bronx Development Organization president Ed Logue minimized Velez’s development activities for years. But Velez’s federal allies at the Housing and Urban Development agency drove Logue out in late 1984 when they defunded SBDO and gave their $1.5 million portion of SBDO’s basic operational budget to three groups, including the Velez-chaired Bronx Venture Corporation. Logue’s replacement is the accommodating Batista. And in October 1984, just a few weeks before the election, HUD selected the Hunts Point Multi-Service Center as the sponsor of a $6.5 million Section 202 project, involving 99 units of housing for the elderly.
Bronx Venture was also awarded consultant contracts this year from the city’s Community Development Agency and Public Development Corporation totaling $250,000, to supplement the half million in Logue’s former federal funding that Velez is using to develop commercial projects. The PDC money was earmarked as a priority budget demand of borough president Simon, whom Velez backed against his own onetime protégé, Jose Serrano—a sign that Velez’s arrangement with Bronx Democratic leaders is paying dividend.
Last year Velez incorporated a for-profit consultant and real estate corporation, Ravel Associates Ltd. This year he opened an office for Ravel at 2804 Third Avenue, a prime commercial building owned by Bronx Venture and gloriously rehabbed at government expense. When we went looking for Velez in the Bronx on two separate days, his car was parked in front of Bronx Venture, and sources close to him say that he is spending less and less time at the Multi-Service Center and more and more at Bronx Venture and Ravel. Ravel is now involved in several joint ventures with corporations run by Velez’s associate Lugovina. He and Lugovina are scouring the Bronx for sites and funding, confident of federal, city, and county support. He is even trying to cement relations with state officials whose mortgage and housing agencies are increasingly critical elements of development packages. Velez became a sponsor, and Lugovina a vice-chairman, of the recently formed Hispanic fund-raising committee for Mario Cuomo, attempting to woo a distant, if not hostile, governor.
Koch, Bronx boss Stanley Friedman, Simon, and Velez’s federal allies seem as indifferent to his greed as they are to his demagoguery and explosive bile (see “The Story Behind the Story,” reproduced below). He may be an occasional embarrassment, but he is a constant functionary, a reliable autocrat. Instead of having to deal with the mounting frustrations of the borough’s 75 percent black and Latin minorities, they only have to trade with kingpin Ramon, indicted state senator Joe Galiber, and a handful of lesser hustlers atop the agonized sea.
A loser the last three times he ran for public office, Velez got 2,280 votes of the 15,000 cast when he ran for Congress in 1978, a fourth-place finish that apparently persuaded him to give up his electoral career. Since then, his South Bronx Democratic Club has elected a local councilman, assemblyman, Democratic district leaders, and school board members. But the white politicians who entrust him with control of so vast a community institutional base are not responding to these meager signs of grassroots support (indeed, Velez’s councilman, Rafael Castaneira Colon, barely won reelection this year, getting slightly less than 30 percent of the vote in a crowded field). They empower him precisely because he won’t let the agencies he runs empower Latins. He has refused, for example, to back any of the three Latin candidates who’ve opposed Simon since 1979, undercutting the chance to elect the first Puerto Rican on the city’s Board of Estimate since the ’60s. “I can’t bite the hand that feeds me,” he candidly told El Diario.
The Voice’s latest look at Velez is a veritable travelogue of scandal. Stretching from small country towns where conflict-of-interest deals with big city bureaucrats are buried, to San Juan condos and other island properties apparently acquired in part with his income from South Bronx poverty programs, it is a tourist tale begging for the sunlight of newsprint.
An Engineer’s Dream
Guanica, Puerto Rico—It was a warm Saturday morning last February, and Ramon Velez was riding down an almost impassable, rock-covered road. He watched the green hills around him dip gradually, first onto a sandy beach and then into a tranquil inlet. Velez had arrived in Guanica the night before—a sleepy town on the southwestern tip of the island, depressed after the closing of its sugar factory years ago, but one of the only ports in Puerto Rico deep enough for cruise ships. A Velez functionary had organized the four-day excursion to Guanica, involving some 50 South Bronx leaders, but Velez had left most of his guests at the hotel while he took a car a mile or so down the dirt road. The car passed four-foot-tall, cactus-like yucca plants; the elegant, tiled ruins of a retreat house where Catholic bishops used to gather and meditate; and a still-active salt mine nestled in the corner of the bay. Off to the side was a rotted, abandoned hulk of a truck, with two words in English painted in large letters on the side: BAD BOYS.
He’d brought the woman he would divorce in four days, Caroline Velez, to see what he sensed was an engineer’s dream, the natural topography for a luxury hotel and villas: gentle slopes descending into quiet, caressing water. He’d also brought his consultant, Antonio Fuentes, and the two partners who planned to join him in this venture.
One partner was predictable: Frank Lugovina is a Velez protégé who has risen to a level of real estate sophistication transcending that of his mentor. A member of the state’s Banking Board and the city’s Water Finance Board, Lugovina is now the codeveloper of a $39 million Battery Park City housing project—a far cry from the years of hustling for a piece of the burnt-out Bronx to build sandbox-sized low-income apartments. A Hugh Carey appointment in 1982 to chair the state’s billion-dollar mortgage agency (SONYMAE), Lugovina was forced out a year later by the new governor, criticized for an expense-voucher raid on the agency that included junkets for top executives and their wives to Martha’s Vineyard, Reno, and Palm Beach. His development firm recently got a $2 million construction mortgage for a Bronx housing project from the upstate Troy Savings Bank, which received $6 million in SONYMAE deposits during Lugovina’s term, and he’s become an investor in a small, Puerto Rican–run bank that received SONYMAE deposits during his term that were three times as large as those given to established Latin banks. Convention-center contracts were taken away from one of his firms in 1983 when the attorney general ruled that the contracts were in conflict with Lugovina’s state position.
The other partner was Jorge Batista, a member of the state Board of Regents and chairman of the city’s Loft Board. Landing Batista as a partner was probably a bigger prize to Velez than the project itself. A month earlier, Batista had started at SBDO. His unsoiled reputation and the multimillion-dollar public agency he ran were already becoming conduits for deals back in the Bronx—deals a lot more concrete than the speculative vision the three talked about that day on Guanica’s untouched beach.
Accompanying Batista on the Guanica beach was the first person he hired when he took over SBDO in January—chief engineer James Manoussoff, who’d previously worked for Batista at a Bronx hospital. Batista, who runs SBDO as a $50,000-a-year consultant expected to work 800 hours a year, got Manoussoff a similar consultant package, $45,000 a year for 750 hours. While Batista’s two city posts (SBDO and the $30,000-a-year loft-board job) earn him a commissioner’s salary and, according to top city officials, are supposed to add up to a full-time position, Manoussoff is part-time at SBDO. He is permitted under his contract to perform other consultant services so long as they don’t conflict with his SBDO obligations. A few days after the Guanica trip, Batista wrote a planning memo to Velez and Lugovina listing Manoussoff as the New York consultant on the first phase of the Guanica project—a plan to get federal senior-citizen housing funds to build a Section 202 project on the inland side of the property.
The plan, as Batista explained in the memo, was to set up a business corporation and “execute a shareholders agreement among R. S. Velez, F. Lugovina, and J. L. Batista so that each of us has the right to acquire one-third interests in the Bishops Point Development Corp.” (Velez’s consultant Fuentes, using the Bronx Venture address, was one of three signatories on incorporation papers filed for this company in Puerto Rico a couple of weeks after the Batista memo.) Bishops Point would then, according to the memo, enter into a lease with an option to buy the Guanica land. Batista also suggested that another company, the nonprofit La Providencia Inc., be incorporated in Puerto Rico (it was) and that a board of directors “be negotiated by R.S.V. with local political, governmental, community and religious leaders.” La Providencia would be established as a tax-exempt corporation eligible for the Section 202 housing subsidies and would then seek funding for what Batista estimated in the memo would be 60 to 75 single-family houses for seniors.
An option letter was prepared by Batista in late March and sent to Oscar Valle, a real estate agent in Mayaguez, Puerto Rico, who represented the family that owned the Guanica property. It offered $300,000 for the property, a third at closing and the remainder over a five-year period. The theory was that if HUD granted the 202 allocation, La Providencia would buy that portion of the 300-acre site needed for the housing project from Bishops Point, paying top dollar and using federal funds. Bishops Point would use its profits on the federal sale to complete the payout plan with the original owners, acquire the rest of the site, and begin the hotel project.
Federal regulations require that the nonprofit sponsor of a 202 project be unconnected with the owner of the land. The arrangement planned by Velez and his partners was an attempt to circumvent that arm’s-length requirement. Since Puerto Rico and New York are covered by the same regional housing office, the three were confident that they had the contacts to get a 202 approved (indeed, Velez had obtained a 202 allocation for the Bronx project just a couple of months earlier).
Caroline Velez, Manoussoff, Fuentes, and the three partners toured the beach that day with Lugovina’s wife, the realtor Valle, and a Puerto Rican builder related to Fuentes named Miguel Reyes Fuentes. (Reyes Fuentes had signed the incorporation papers for Bishops Point and La Providencia.) Both Valle and Reyes Fuentes freely discussed the visit that day and the participants in the proposed deal. So did the real estate broker for the buyers, Ernesto Martinez. A longtime housing activist in New York whose Puerto Rico real estate interests are managed by Valle, Martinez was the spark plug for the deal. After learning of the availability of the property through Valle, Martinez used intermediaries to interest Lugovina and spoke to Batista himself. Lugovina, he says, then “brought in Velez.” Martinez says he was told that “any deal Lugovina is a part of, Velez has to be a part of” and that this arrangement “works both ways.”
Before the trip to Puerto Rico, Martinez went to a meeting at Lugovina’s Bronx office. “It was Batista who told me that they were going into the deal with Velez,” said Martinez. “Batista said they’d be one-third partners. They said that whatever Jorge, Frank, and I agreed to, Ramon would agree. After that meeting, they went down to Puerto Rico together.”
“Batista’s letter was never answered,” says Martinez. “They offered $300,000 and the daughter wanted to sell, but the uncle was sticking out for $900,000. The partnership is still interested. There is no time limit on that offer. Oscar says we just have to wait.” While I was reporting this story, the recalcitrant uncle died. Madel Pirallo, whose mother is the principal owner of the property, says that she heard months ago that “three or four Americans made an offer” for the property, but was never told the details, “probably because my uncle thought it was too low.” Valle offered the same scenario as Martinez, saying he was “still representing the owners” and hopeful of making a deal.
Martinez and others also recall one other player in the proposed Guanica deal, the then mayor Liduvino Garcia Salcedo, who joined Velez, Batista, Lugovina, and some of the others in a discussion of the project back at the hotel, after their February visit. A few months later, Garcia was indicted in San Juan Superior Court on three corruption charges involving a kickback scam with contractors. Martinez says that he’d talked with Garcia before the Puerto Rico trip, asking about water and power lines, roads and construction permits, and that Garcia was “cooperative.” The contractor Reyes Fuentes, whose family is a dominant and reputable force in Guaynabo, on the eastern side of the island, recalled Garcia discussing the availability of exceedingly cheap Department of Agriculture bulldozers at the meeting that day in the hotel and his own control of their use. Martinez simply noted: “It’s quite customary to make all sorts of deals with the mayor for this heavy equipment.”
Mayor Garcia reportedly announced that “when everything was finished, a piece of land would always be appreciated,” and Velez, Antonio Fuentes, and he went off for a private conversation. Efforts to talk with Garcia in Puerto Rico were unsuccessful, but the government’s investigator on the case said that he’d heard about the proposed beach deal and Garcia’s involvement in it. Garcia will go on trial soon, and is also facing a federal investigation.
Velez, Lugovina, Batista, and Manoussoff refused to talk to the Voice (Velez rather emphatically). But after weeks of stonewalling, Batista did offer some minimal answers through a spokesman, Ethan Geto, head of a private public relations firm retained by SBDO. He flatly denied that he had ever been a partner in a business deal with Velez or Lugovina, adding he’d also “never profited” from one. He said the draft option letter obtained by the Voice, which listed the three as “principals and owners,” had been “doctored.” He said he’d signed the option letter as a lawyer for Velez and Lugovina, and that the letter had the same sentence listing principals, but mentioned only those two. Batista refused to provide a copy of his version of the letter, nor could he counter the planning memo written by him which expressly said that the three would be partners on the project. Even his defense, that he was a lawyer for Velez and Lugovina after he took over SBDO, is an admission of a conflict relationship, though less of a conflict than if he were a principal.
***A detailed discussion of the business relationships between various entities in the real estate transaction has been elided. —Ed.***
Empire in the Sun
The Guanica project fit comfortably in Ramon Velez’s expanding portfolio of Puerto Rican ventures, though none of the others were similar conflict transactions. Instead, these deals represent simply a siphoning off of Velez’s South Bronx earnings to build a poverty-purchased empire in the sun.
In February 1983, when Velez was just entering the world of six-figure salaries, he bought a three-and-a-half-acre vacant strip of property in the center of Boqueron, a resort town near Guanica, from an engineer named Armengol Iglesias. The purchase price was $63,000, which Iglesias says Velez paid in three installments by personal check. The last payment was two months ago. Velez also retained Iglesias to design the 25 private homes he plans to build on the site and has paid him twice for getting the project through two crucial phases of the local planning process (he will not say how much). Iglesias was also listed in the Batista memo as an engineering consultant on the Guanica project.
The Boqueron land dips down a hill to the beach, just like the Guanica property. Iglesias owns 25 contiguous acres, also vacant, where he plans to build, possibly with Velez, a luxury hotel. Just like in Guanica, the projected income from Velez’s initial housing project might make the hotel possible. Santos Ortiz, the mayor of nearby Cabo Rojo (which administers the tiny town of Boqueron) and a longtime friend of Velez, said that the planning commission had given Velez’s project preliminary approval. Iglesias said the final plans will be finished in a few months and that Velez, who took sole possession of this land in the divorce proceedings with Caroline, will sell the homes before they are built.
This summer Velez attended a ceremony in Boqueron, when New York housing commissioner Anthony Gliedman presented a city fire truck to the town. The truck was bought for $10,000—raised here and in Puerto Rico—after a fire destroyed seven homes in the town because it took too long for trucks to arrive from Cabo Rojo. The truck is now parked in a makeshift garage right behind Velez’s property. Ed Pagan, a local realtor whose firm represents Velez, told me that after the ceremony, Velez sat down with a group of local businessmen to discuss quickly buying another piece of Boqueron property opposite the elementary school. Pagan said that the group told Velez that the site was likely to be selected by the education department as the site for a new high school. Velez and the group were apparently considering a quick turnaround and a fat profit on the school sale. It is unclear if a deal was ever made. I called Oscar Morales, a Boqueron businessman close to Velez who reportedly participated in both the discussion and the selection of the school site, but he hung up when I mentioned the school property.
The only other Puerto Rico properties Velez kept as sole owner after the divorce were a hundred-acre farm in Las Marias and a six-figure, two-story private home in Mayaguez. The Mayaguez house was the first property Velez is known to have bought in Puerto Rico, way back in 1972. One of its apartments is still lived in by his first wife, who refused to answer most Voice questions. This house is only a few miles away from the small house in Hormigueros where Velez’s 81-year-old mother, Maria Ramirez Velez, lives. When a photographer and I visited the mother’s house with a translator from the University of Puerto Rico, Mayaguez campus, we were met by Velez’s sister, who is in her mid-fifties. We explained that we were doing a story on her brother, and she took us into Mrs. Velez’s bedroom.
Dressed in a blue cotton housedress and white cotton socks, Mrs. Velez sat on the edge of her bed. A bare lightbulb lit the room. A portrait of her husband, who died three years ago, hung on the wall. A fan, an aluminum walker, and a single chair were all that occupied the room. Her round, cherubic face lit up when she told us how Ramon got “interested in politics as a teenager” and led a procession “praising the Popular Democratic Party.” She said he “liked to study a lot” and wanted to be a lawyer, but quit school to fight in the Korean War. She was proud of his achievements in New York, said she’d visited him there three times, and that he had helped her get medical treatment through the Multi-Service Center.
Asked if he’d helped buy the house she how lives in, she said: “No. His father and I spent our life savings on this house five years ago, $15,000. The house we were living in was old and falling apart.” Asked if he’d ever offered her a place to live in Puerto Rico, she said he hadn’t. She said that he didn’t own any property here, but that he’d invited her to stay with him in New York. She said she lived solely on Social Security. She and Velez’s sister talked warmly about the person they believed was Velez’s wife, Caroline. The mother described her diabetes, arthritis, and heart condition and said she was constantly in and out of hospitals.
The rest of Velez’s identifiable property on the island is in San Juan. Though these properties were awarded to Caroline Velez in the divorce, the titles, which list Ramon as co-owner, have not been changed. Velez bought his first condo in 1975, adding others in 1977 and 1978. His most active year was 1982, when he purchased three in the space of a few weeks—though his salary at the time was only $47,000. Typically, his purchase of a one-room apartment in the Astor Condado, a condo across from the beach along the prime strip of hotels, cost $36,000 and was financed with only an $18,000 mortgage. He bought a 6,000-square-foot duplex penthouse at the top of the luxury Centrum Plaza in Hato Rey for a recorded $100,000, including a $28,000 cash payment. That price is extremely low for the building, which is located just a block from the main headquarters of Banco De Ponce and Banco Popular, along what’s called the Golden Mile. Velez reportedly had a Jacuzzi, given him by a New York contractor, hauled 12 stories up for the duplex.
Velez rents many of these condos, and his tenants, most of whom are quite happy with him as a landlord, told us they send checks, made out to him personally, to his post office box in the Bronx. He keeps the Centrum Plaza, the Astor, and the apartment we visited him in, at the Chateau Lagoon, for his personal use. He acquired the Lagoon apartment in April 1984 for $55,000, assuming a $38,000 mortgage and paying the rest in cash. It was the second apartment he’d bought in the building, which is also located directly across from the hotel strip and the San Juan convention center.
They Stoop, He Conquers
In the late ’70s, dozens of Velez employees were subpoenaed before a federal grand jury that had targeted him, but no indictment ever resulted. The assistant US attorney handling the case, Richard Weinberg, never successfully prosecuted a major corruption case before or after taking on Velez. Weinberg is listed only three times in the annual reports covering his five years in the prosecutor’s office and only once as the lead attorney on a case—a small food stamp prosecution. Weinberg didn’t prosecute many cases because he became one of the office’s top appellate attorneys, rising to appellate chief. As he worked his way up in the appellate section, he brought the Velez case with him, according to then US attorney Robert Fiske. Appellate attorneys write briefs, not indictments, and Weinberg, who quickly assumed a leadership role in the section, had other demands on his time. The Velez case died when Weinberg left, in September 1979.
Beating the probes of the ’70s has given Velez a kind of immunity. He is seen in the streets of the South Bronx as impregnable. A half dozen of the people who live in the building where he claims to live, next door to the Multi-Service Center, curse him but regard him as if he were larger than life. “No matter what you do,” said one, “Ramon Velez is going to wind up with his share of the money.” In the South Bronx, he is as unavoidable as rubble. Even a Jorge Batista stooped to deal with him. The people have rejected him, and yet he still rules. It will take a bulldozer to move him—a mayor, a prosecutor, a governor, a newspaper publisher, a TV producer. Without that kind of combination, the kingpin will roll on, until he finally decides to take his Bronx winnings to Boqueron. And sit on his hill, gazing into the sunset.
The Story Behind the Story
The untouchable Ramon Velez, who once boasted that he’d survived 150 investigations, was recently indicted for the first time. After a lengthy probable-cause hearing in a San Juan courtroom, Judge Alba Del Valle Galarza set a January 7 trial date for Velez on three misdemeanor assault charges, each of which carries a maximum of six months in jail. The charges were a result of his recent attacks on Voice staff in Puerto Rico—including an attempt to strangle me in a stairwell and a broom-swinging barrage against me and Voice photographer Susan Ferguson.
Velez was represented by four attorneys, including a former San Juan district attorney, and attempted twice to get the hearing adjourned. As allowed under Puerto Rican law, Velez and his attorneys remained in the hearing room throughout the proceeding, were granted a wide latitude in cross-examining Ferguson and me, and made emotional appeals to the judge, describing the case as pitting “Americanos against natives.” (In New York, defendants and their attorneys are not permitted to participate in grand jury proceedings.) Though a three-hour adjournment was granted Velez so he could produce witnesses, neither he nor any other defense witnesses chose to testify.
Prominent supporters sat with him during the day, including a former judge, the ex-head of a bankrupt San Juan university, prominent businessmen, and former island senator Ruth Fernandez. A Velez relative showed San Juan reporters a letter of support Velez received from Ed Koch. San Juan Star reporter Robert Friedman reported that the mayor had written that he was “no fan of Wayne Barrett” and that he wished Velez well “in this particular case.” The mayor later told the Spanish daily El Diario that it was a private letter to Velez and refused to comment on the indictment.
The attack occurred in mid-November, when I was reporting this story, visiting Velez’s many Puerto Rico properties and interviewing his tenants, relatives, and associates. Velez was simultaneously spending a week and a half there and, as his subsequent statements to the press have indicated, kept getting feedback from people I’d interviewed. He knew we’d visited most of his condos. He was staying in one of the few we hadn’t. When we arrived at this condo along the Condado in San Juan and rang his buzzer from an outside gate, he stuck his head out the window, saw us, then buzzed us in, waiting for us at the top of a narrow stairwell he knew we had to walk up. After I knocked on the door leading from the stairwell to the hallway, Velez suddenly burst from behind it, threw his immense weight at me, and knocked me to the floor.
He held me in a stranglehold and swore repeatedly that he would kill me. For at least a minute, I believed he intended to and could. Ferguson grabbed him from behind and thrust her fingers in his eyes, forcing him to loosen his grip. Then he chased us out to the courtyard of his building, brandishing a broom and shoving Ferguson’s camera into her face. A crowd gathered and he began screaming, “Communists! Homosexuals!” When I accompanied the police to Velez’s apartment after the incident to identify him, his brother Tutu, who’d joined him there, warned me in front of six cops: “You’d better run and you’d better hide.”
His assault on us was Velez’s way of responding to a prying press. Former WNEW-TV reporter Steve Bauman, whose stories led to federal probes of Velez a decade ago, weathered death threats and Velez press releases accusing Bauman of taking $50,000 bribes from Velez opponents. At the same time that Bauman was exposing Velez, the Voice’s Pete Hamill wrote an extraordinary article demonstrating how Velez’s rise to power was linked to the still unprosecuted and mysterious murder of Edwin Rivera, a Velez opponent who was run down in front of 30 witnesses outside a Bronx public meeting by a car that dragged his body 50 feet. Not long after Hamill’s article was published, a number of his close friends and relatives were called by individuals who told them he’d been killed in Brownsville. Since his friends knew that Hamill was in Brownsville that day, they panicked.
Ramon Velez curses the photographer after attacking her with a broomstick. (Photo courtesy of Susan Perry Ferguson)
Earlier this year, Velez shoved Voice photo editor Fred McDarrah, when McDarrah tried to take his picture at Koch’s reelection announcement. When I visited Velez’s South Bronx Democratic Club on election night in 1982 with Joe Conason and a Voice photographer, Bronx Democratic leader Stanley Friedman had to intervene to prevent Velez and his sidekicks from physically throwing us out of the club. And in April 1985, Velez’s 31-year-old son from a previous marriage, Ramon Jr., drove his car directly at a parked car carrying Voice reporter William Bastone and a photographer, chasing them off the road and down a sidewalk. This attack occurred after Bastone had returned to his car following an unsuccessful attempt to interview the younger Velez on the street.
Velez has the same respect for his political opponents as he has for a free press. Herman Badillo, who recalls that bullets were fired through his campaign headquarters when Velez ran against him for Congress in 1976, has been on the receiving end of Velez innuendo for years, including a scurrilous letter from him published in El Diario a few months ago. Former city councilman Gilberto Gerena Valentin, who beat Velez in 1977 and lost to a Velez-backed candidate in 1982, is suing Velez for libel. After Valentin’s opponent, Rafael Castaneira Colon, defeated him in a special election, Velez went on Spanish radio to thank the voters and plunged into an extraordinary diatribe against the 67-year-old Valentin.
Velez said Valentin “represents infamy, the lie, hate, abuse against women, atrocity,” and lamented that Valentin “now unfortunately goes to Social Security.” (“What we want to do,” Velez suggested as an alternative to Social Security, “is to make a public monetary collection to get him a one-way ticket to Iran.”) Screaming that Valentin was a “child molester” and a “bandit,” Velez described himself as “a Puerto Rican man that will not sell his country to strange interests, be it Russian or Iranian, Communist or Socialist. I am a patriot, not a traitor like Gerena Valentin.”
Velez described Colon’s win as “the biggest victory of my life,” promising the radio audience during his rant against Valentin that justice would finally prevail under Colon. Two months later, the Voice revealed that Velez’s new city councilman owed $13,189 in child support payments to two wives and six children that he’d left on welfare. The city quickly moved to force him to pay. Colon used a phony name in the child support case, a phony union label on campaign literature, a phony Cuomo endorsement, a phony Bronx address, and a phony Fordham law degree. Ramon’s son went on Colon’s payroll immediately, though he was a full-time employee of Citibank for the same 26 months that he drew city council checks.
Since the Rivera murder in 1969—and the investigations that kept it alive in the press through much of the ’70s—fear has been a prop of the Velez machine. The ballyhoo in the Latin press about his recent assault on Voice staffers, while sharply critical of Velez, may also be feeding the legend of his fury. To complement his strong-arm reputation, he has an ex-cop bodyguard, once suspended for excessive force and now employed by the Teamsters and Velez. In 1982 Velez slapped his councilman Colon in the face on election night in front of the victory-party crowd when Colon forgot to thank him in his acceptance speech.
Velez is a warrior king who rewards loyalty, punishes those who stray, and assails his enemies. No wonder the mayor admires him.
Research assistance by Janine Kerry Steel and Jennifer Zaina