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Muelle Dorado scandal

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Muelle Dorado scandal

The Hato Rey del Cherusken waterfront, where the Muelle Dorado was built.
Date 1735 AN to 1740 AN
Venue Hato Rey del Cherusken
Location Hato Rey, Boriquén, Nouvelle Alexandrie Nouvelle Alexandrie
Type Municipal corruption scandal
Cause Award of the NAX€750 million Muelle Dorado harbor concession without competitive tender in 1735 AN to a consortium held by nominees for Mayor Alicia Filipenses
First reporter A Hato Rey television station, 14.XI.1738 AN
Participants Alicia Filipenses (WPP), Mayor of Hato Rey
Cherusken Coastal Holdings (concession holder)
A brother-in-law of the mayor and two business associates (nominee shareholders)
Outcome • Filipenses expelled from the Wakara People's Party
• Defeat by George Navarro at the 1739 AN municipal election
• Filipenses convicted and barred from public office (1740 AN)
• The three nominee shareholders convicted on lesser counts
• Concession voided and the works re-let to Constructora de Hato Rey
Inquiries Audit office of the city of Hato Rey
Charges Fraud, bribery, falsification of public records
Trial 1740 AN
About NAX€120 million of the project budget was diverted through undervalued land sales, padded subcontracts, and payment for work never carried out.

The Muelle Dorado scandal was a municipal corruption scandal in Hato Rey, the capital of the Region of Boriquén in Nouvelle Alexandrie. Mayor Alicia Filipenses awarded the city's NAX€750 million harbor redevelopment in 1735 AN to Cherusken Coastal Holdings, a consortium whose shares were held for her by a brother-in-law and two business associates. No competitive tender was held, and Constructora de Hato Rey, the Region's biggest builder, was passed over.

About NAX€120 million was diverted through waterfront land sold below its valuation and payment for construction that was never carried out, while the city pledged municipal revenue against the consortium's debts. The works stopped at their foundations. A municipal auditor took the contracts and the doctored council minutes to a Hato Rey television station, which broadcast them in XI.1738 AN.

Filipenses denied wrongdoing. The Wakara People's Party expelled her and ran George Navarro against her at the 1739 AN election, which she lost; a court convicted her the following year of fraud, bribery, and falsifying public records and barred her from public office, while the three men who had fronted the consortium drew shorter sentences on lesser charges. Navarro voided the concession, and the wharf was finished by Constructora de Hato Rey. The name survives in Boriquén as un Muelle Dorado, a public works project captured by the firms that build it.

Background

See also: Alicia Filipenses

The Wakara People's Party (WPP) was formed in 1722 AN, four AN years after Boriquén entered the Federation, and took the regional government at the 1723 AN elections.[1][2] Through its first years Hato Rey was a WPP stronghold, held through the same ward organizations by which the party ran the Region.[3] That hold broke in 1729 AN, when Ignacio Pérez de San Quintín of the Federal Humanist Party became the first Federal Humanist to take the city.[4] His single term was fought against a WPP-controlled Municipal Council, and the two sides clashed openly over a contested waterfront scheme, a dispute that reached the San Quintín incident of 1732 AN and left Boriquén the saying "Y se formó las de San Quintín", for an attempt at a fix that makes the trouble worse.[3][5]

Alicia Filipenses took the mayoralty back for the WPP at the 1734 AN election, beating San Quintín on a promise to steady the city and to spend on its harbor.[3] She had risen through the same ward machinery, and by the early 1730 ANs she sat among the party's senior figures in the cacicazgo of Hato Rey, the state that the city itself constitutes.[3][2]

The Muelle Dorado project

The Muelle Dorado, or Golden Wharf, was a redevelopment of the harbor front at Hato Rey del Cherusken, the yucayeque that holds the city's business district and its modern core.[6] The plan called for cruise berths and a lakeside promenade along Lake Cherusken, with blocks of luxury housing set behind them, at a budgeted cost of NAX€750 million. It was to take passengers rather than freight, which the city already handled at the Port of Hato Rey in its own yucayeque.[6] Filipenses presented it as the project that would make Hato Rey the first port of the Keltian coast.[3]

The budget was modest beside the NAX€4.2 billion Hato Rey Metropolitan Transit System, which Constructora de Hato Rey had built for the city between 1723 AN and 1730 AN.[7]

The concession

The concession went out in 1735 AN with no competitive tender.[3] The Government Procurement Act, 1720, in force since 1722 AN, bound regional and local governments to the Federation's procurement rules and charged the Public Procurement Service with promoting transparency, fairness, and competitiveness in public procurement.[8] The award went to a consortium called Cherusken Coastal Holdings, passing over Constructora de Hato Rey, the largest construction firm in Boriquén.[7]

Cherusken Coastal Holdings answered to the mayor. A brother-in-law of Filipenses and two of her business associates held its shares as nominees, so the returns on a contract she had signed ran back to her own circle.[9] The Municipal Council, which seats two members from each of the city's twelve yucayeques, approved the concession without being told who stood behind the consortium.[6]

Conduct of the scheme

The city sold prime waterfront land to Cherusken Coastal Holdings well under its assessed valuation and pledged municipal revenue against the consortium's borrowing, which left the risk of the development with ratepayers and the return with the shareholders.[9] It also paid for work that was never done, the money leaving the treasury through padded subcontracts and consulting fees and returning to the nominees. The total diverted came to about NAX€120 million, close to a sixth of the budget.

When the city comptroller pressed questions about the accounts, he was removed from his post, and the minutes of the council vote that had granted the concession were altered to blur which members backed it.[9]

The works themselves stalled. Foundations were poured along the lakefront and then left, and the site stood fenced and idle while the budget drained.[3] The lake's cruise trade grew through the same years: it carried two million passengers in 1736 AN, was worth about NAX€1.2 billion a year to Boriquén by 1737 AN, and was projected to reach three million passengers by 1740 AN.[10]

Exposure

The affair broke on 14.XI.1738 AN, when an auditor from the city's own audit office handed a Hato Rey television station a dossier of the contracts and the altered minutes. The station ran the material across several nights, showing viewers who owned Cherusken Coastal Holdings, what the public land had sold for, and invoices for construction that had never happened.[9]

Filipenses denied any wrongdoing and cast the leak as an attack timed to the coming election. "These papers were timed, not found," she said. "I have signed nothing I cannot defend."[9] The Wakara People's Party said it was reviewing the allegations. Opposition members of the Municipal Council called for an independent audit of the project and for the concession to be suspended while the ownership of the consortium was examined.[9]

Election and prosecution

The party moved to separate itself from the mayor once the broadcasts had run. The WPP, then led by its founding co-leaders Mayani Guacanagari and Beatriz Daguao, expelled Filipenses and put up George Navarro as a clean-government candidate for the 1739 AN election.[3][1] She lost by a wide margin and left office to Navarro that year.[6]

Prosecutors charged Filipenses with fraud, bribery, and falsifying public records, and the case went before the cacicazgo court of Hato Rey, which hears the more serious criminal cases in Boriquén and whose judges are known as bohiques.[2] She was convicted in 1740 AN and barred from public office, and she did not return to politics.[3] Her brother-in-law and the two associates who had fronted Cherusken Coastal Holdings were tried alongside her and convicted on lesser counts, drawing shorter sentences than the mayor.

Completion of the wharf

Navarro's administration voided the concession and re-let the works. Constructora de Hato Rey, the firm passed over in 1735 AN, took the contract and built the wharf broadly to the original design, with the cruise berths, the lakeside promenade, and the housing blocks set behind them. The finished development stands on the Hato Rey del Cherusken waterfront.

Legacy

In Boriquén the phrase un Muelle Dorado came to describe a public works project that serves the firms building it rather than the public paying for it.[3] It was the second such saying to come out of the city's politics, after the one the San Quintín incident left behind in 1732 AN.[5] The Wakara People's Party kept the mayoralty through the affair by expelling Filipenses and running Navarro in her place, and Navarro has held the office since 1739 AN.[6]

See also

References

  1. ^ a b Wakara People's Party
  2. ^ a b c Boriquén
  3. ^ a b c d e f g h i j Alicia Filipenses
  4. ^ Ignacio Pérez de San Quintín
  5. ^ a b Proverbs and sayings of Nouvelle Alexandrie
  6. ^ a b c d e Hato Rey
  7. ^ a b Constructora de Hato Rey
  8. ^ Government Procurement Act, 1720
  9. ^ a b c d e f "Leaked dossier ties Mayor Filipenses to the company behind the stalled Muelle Dorado wharf", NBC Newsfeed, 14.XI.1738 AN.
  10. ^ Lake Cherusken cruise industry
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