HARLEM — As Attorney General Eric Schneiderman prepares to release the findings of his investigation into the financial dealings of the Puerto Rican Day Parade, the prospects of pulling off the celebration this year look grim, according to one state senator from The Bronx.
Parade chairwoman Madelyn Lugo recently resigned, saying that "I have been informed by the Attorney General that I have no other choice."
State Sen. Ruben Diaz Sr. said Lugo's resignation just months before the June parade attended by up to 1 million people will "destroy the parade and destroy the community."
"Last year after the parade he could have taken the whole board into receivership and allowed a new board to coordinate the parade," said Diaz, who added that he has no problem with the investigation itself. "Now months before the parade he wants to remove the president?"
Sources say Schneiderman could release his report this week. A spokeswoman for the attorney general's office declined comment. The news of Lugo's resignation was first reported by NY1.
Schneiderman launched an investigation into the National Puerto Rican Day Parade Inc. last year after a controversial marketing effort with MillerCoors that wrapped what looked like a Puerto Rican flag around Coors beer cans set off questions about the sponsorship arrangement. DNAinfo New York first reported news of the outrage over the beer can design.
MillerCoors at first defended the advertising campaign and its relationship with the Puerto Rican Day Parade, citing a long-running scholarship fund. That's when Schneiderman asked MillerCoors and the Puerto Rican Day Parade for more information regarding the fund.
"It is unclear from this statement the nature and scope of the 'partnership' between MillerCoors and your organization," the head of the attorney general's charities bureau wrote in a May 30 letter to Lugo.
According to tax documents, the board's finances are in disarray, with an $880,000 deficit at the end of 2011 despite having raised more than $2.4 million from 2007 through 2011. That year's tax filings also did not show that any scholarships had been distributed. The 2012 tax reports show the deficit has grown to over $1 million.
Tax documents also revealed the Puerto Rican Day Parade's long relationship with Carlos Velasquez, president of the Galos Corporation, the parade's marketing agent. The company was paid $85,919 for its fundraising activities for the group in 2011.
In her resignation letter, Lugo denied that the board had "misappropriated any sponsorship monies," but said that she felt "disappointed and betrayed" by Velasquez.
Lugo also said she repeatedly asked Schneiderman if she could remain on the board.
"He has refused," Lugo wrote.
Diaz said he will hold a press conference with Lugo on Thursday.
Ramon Jimenez, attorney for Boricuas for a Positive Image, the group that first began protesting the flag image on the can, called Diaz's concerns ridiculous.
"It's a historical moment where we can reclaim our parade, which has become about the stereotyping of Puerto Ricans," said Jimenez. "There is still enough time to hold a parade that highlights our history and culture but there might be less floats advertising beer and less naked women."
Jimenez said he was asked by the attorney general's office for the names of people who might be able to step in and help organize this year's parade on short notice.
"We recommended people that have a long history of service to the community and integrity," said Jimenez. "This is not just about this year's parade — it's about the future."