Puerto Rico gov faces finance probe

Puerto Rico gov faces finance probe

	Published : Tue, 26 Jun 2007 13:31 By : Agencies Print this Story

SAN JUAN, Puerto Rico (AP) - After months of denials, Puerto Rico's governor acknowledged Monday he is the target of a U.S. grand jury investigation into campaign finances -- a revelation further jeopardizing his bid for re-election.

Gov. Anibal Acevedo Vila insisted he has not done anything illegal, dismissing speculation he would be indicted by either of the two grand juries that have questioned some of his closest aides.

'I don't doubt that they are investigating things close to me,' he told a news conference. 'But I'm not losing sleep over it.'

The governor's party favors maintaining Puerto Rico's loose commonwealth affiliation with the United States. He had already seen his popularity suffer from the island's economic recession, a budget standoff last year that led to a two-week government shutdown, a new sales tax that took effect in November, and increases in water rates and highway tolls.

Acevedo, who previously served as Puerto Rico's nonvoting representative in Congress, is expected to seek re-election in November 2008 but has not announced his candidacy. He will face strong opposition from the candidate of the party that favors U.S. statehood for the island.

If he runs, analysts say the grand jury probe could dominate the campaign.

'If this constant speculation goes on for long enough, it could make his candidacy problematic even if he's not charged,' said Angel Rosa, a political scientist at the University of Puerto Rico in Mayaguez.

The Justice Department and the FBI have declined to provide details about the investigation, as have the governor and his aides. In March, however, the grand jury issued a search warrant on the Puerto Rican affairs office in Washington that sought documents related to Acevedo's 2000 campaign for, or tenure as, resident commissioner, a post he left in 2004. It is also reportedly probing the finances of his 2004 campaign for governor.

Dozens of people have been called to testify behind closed doors -- including the governor's press secretary, campaign finance director and executive assistant.

Separately, Puerto Rican authorities are investigating the governor for possible ethics violations for his party's purchase of tailored suits worth $40,000 for his official use.

Previously, Acevedo had insisted he was not the focus of any U.S. federal investigation. The governor has hired veteran Washington defense attorney Thomas Green, a specialist in white-collar crime.

Allies of the governor have dismissed the probe as the work of overzealous prosecutors that has produced only rumors since it began two years ago.