Political donations linked to Act 22 stir debate ahead of Puerto Rico elections
A new report reveals significant campaign contributions from Act 22 beneficiaries.
As Puerto Rico gears up for its general elections, a new report sheds light on the growing political influence of wealthy investors benefiting from Act 22 of 2012, the Individual Investors Act, now included under Act 60 of the island’s Tax Incentive Code of 2019. This law provides tax exemptions to nonresidents who relocate to the island, drawing criticism for its perceived role in worsening economic inequality and environmental concerns.
The analysis shows that Act 22 beneficiaries contributed more than $62,400 to three key political figures — gubernatorial candidate Jenniffer González ($33,900), San Juan Mayor Miguel Romero ($10,400) and Dorado Mayor Carlos López ($18,100) — between January and July 2024. This adds to a decade-long trend of more than $1.2 million in political donations since the law’s introduction in 2012.
The report, released by a coalition of community organizations including Democracia Popular and Puerto Rico Not for Sale, highlights the financial power of Act 22 beneficiaries in local elections. González has received the most significant contributions this year, bringing her total to $118,800 over the past decade.
Additionally, it points out that Gov. Pedro Pierluisi and Rafael “Tatito” Hernández received significant contributions from Act 22 investors earlier in the year before losing in the gubernatorial primaries.
“This report is nothing more than a portrait of the candidates and governors who have not heeded the demands of organizations and communities regarding Act 22,” said Julio López-Varona, campaign director for Democracia Popular.
He noted that the actual donation figures could be higher, as some data are not yet available in the Electoral Comptroller’s Office, and certain donor identities remain unverified.
“What is truly alarming is that in our first report, we included 20 candidates, which totaled around $900,000 in 10 years. However, this second report includes fewer (11) candidates, which total more than $200,000 in only seven months,” López-Varona stated. “This substantial increase in donations confirms the relevance of our demand for transparency and the need to address the influence these beneficiaries have on our politicians.”
Critics argue that Act 22, which was designed to attract foreign investment, has driven up property prices and displaced local communities. Municipalities like San Juan and Dorado have seen a rise in property values due to investments from Act 22 beneficiaries, pricing out residents as the wealthy investors purchase homes and commercial properties.
In Dorado, López has faced scrutiny for his efforts to attract foreign investors. Dorado, which is home to a number of Act 22 beneficiaries, has seen property values skyrocket, with some homes selling for more than $6 million. Environmental groups have also raised concerns about the impact of development projects funded by these investors, particularly near coastal areas.
As the election approaches, the debate over Act 22 is intensifying. Several community groups are calling for the law’s repeal, arguing that it has failed to deliver its promised economic benefits and instead exacerbated Puerto Rico’s housing crisis and caused environmental damage.
A report from Puerto Rico’s tax authority revealed that the island lost more than $2.22 billion in revenue between 2017 and 2023 due to Act 22 exemptions.
“The government needs to investigate the true impact of Act 22 on the island’s economy and communities,” said López-Varona. “We cannot allow these donors to continue influencing our political system at the expense of ordinary Puerto Ricans. We have to reform this system and repeal the existing legislation.”
The coalition’s recommendations include a government investigation into Act 22’s impact on housing costs, particularly in marginalized communities. It also urges the Treasury Department and the Department of Economic Development and Commerce to improve oversight and publish information on Act 22 beneficiaries.
López-Varona also called on candidates who have “accepted donations from Act 22 beneficiaries to return the funds, as permitted by current legislation.”
