A Puerto Rican psychologist will take part in an unusual ceremony today in San Juan -- handing over to the government $800,000 that his father allegedly accepted five years ago as a bribe from the General Electric Co. The son also agreed to come up with an additional $1 million soon, officials said.
Federal officials familiar with investigations involving overseas bribes by American multinational corporations said the Puerto Rican case is the first they know of in which the alleged bribe money is being recovered.
A federal grand jury in Newark, N.J., indicted GE and two of its former executives in September on charges of paying a $1.25 million bribe to help obtain a $93 million power plant contract in the mid-1970s. The alleged bribe recipient, Carlos Velazquez Toro, an official of the Puerto Rican Water Resources Authority, died in 1975.
Velazquez's son, Carlos Velazquez Garcia, became the beneficiary of his father's estate and agreed to return the money after an investigation by a special Puerto Rican House committee traced it, according to Kenneth McClintock, the committee counsel.
Velazquez repeatedly refused to answer questions about the money at a legislative hearing on the case last month, McClintock said. "We wanted to make it obvious to him [by the questioning] that we knew where the money was," he said. Velazquez, who described himself as a psychologist and "ordained minister," negotiated the return of the funds shortly after the hearing.
The size of the settlement "tends to suggest that we're dealing with more money than the grand jury thought," McClintock added. The legislative committee also plans to draft legislation to prevent recurrences of the bribery, the counsel said.
A representative of the U.S. Customs Service, which assisted in tracing the flow of the alleged bribe money, will attend the ceremony at which the money is to be returned.