According to reports from the Office of the Electoral Comptroller (OCE, in Spanish), the independent expenditure committee known as the Super PAC Democracia es Prosperidad (Democracy is Prosperity) — formed by private sector representatives and supporting 33 candidates who advocate for a “free market” economy — incurred over $2.3 million in expenses this election cycle, almost entirely to cover advertising services provided by the advertising agency DEP Publicidad.

Democracia es Prosperidad declined to disclose the campaign investment made for each candidate individually. The Centro de Periodismo Investigativo (CPI) attempted to determine the amount of money allocated to each supported candidate, but this information does not appear in the Super PAC’s income and expenditure reports, nor in the reports from DEP Publicidad and the media outlets that published the ads. The OCE does not require this breakdown of candidates in the reports from independent expenditure committees, explained electoral comptroller Walter Vélez Martínez. Super PACs have no spending or contribution limits.

Although the independent expenditure committee has the information and the CPI requested it, the organization, which includes businesspeople and professionals from the private sector, refused to provide the breakdown, arguing that “it would be incorrect to try to view our exercise individually as happens with an individual candidate’s campaign or their committee.”

“First of all, we must remember that DEP delivered its own economic development strategy messages and did not solely campaign for candidates,” Democracia es Prosperidad said in a written statement not attributed to any spokesperson.

“Moreover, although each candidacy was analyzed individually considering the differences in sizes by representative district vs. senatorial vs. at-large, it should be noted that many production expenses and other items were shared, as the campaigns had a unified leading message that included candidates from three parties,” they added.

According to the general scrutiny results reflected on the State Elections Commission’s website as of December 18, at least 23 of the 33 candidates for the Legislature supported by the Super PAC secured a seat in the general elections. However, the scrutiny process has not yet concluded, so the final results could change.

The Super PAC, led by Manuel Reyes Alfonso, executive vice president of the Chamber of Marketing, Industry, and Food Distribution (MIDA, in Spanish), funded media campaigns supporting 17 candidates from the New Progressive Party, 11 from the Popular Democratic Party, and five from Project Dignity.

Democracia es Prosperidad did not support any candidate from “La Alianza de País,” a coalition between the Puerto Rican Independence Party (PIP) and the Citizen Victory Movement (MVC). In fact, the committee campaigned against the MVC. In one ad, for example, Democracia es Prosperidad claimed that behind the party “hides an anti-capitalist agenda that threatens Puerto Rico’s future.” The MVC’s government program rejects “the privatization policies of essential services and public goods,” proposes funding a universal health insurance system, and contemplates expanding labor rights.

In-House Advertising Agency

DEP Publicidad is registered with the Department of State as Guardarraya Communications LLC, whose president, Efrén Pagán, is also the founder and president of ARCO Publicidad. Guardarraya Communications LLC and ARCO Publicidad are legally separate companies but share the same address and executives: Efrén Pagán, Luisa Pagán Storer, who is listed as vice president and secretary, and Damaris Pérez, who appears as treasurer and vice president of operations. Guardarraya is the younger of the two advertising firms, registered in 2020. Additionally, the press contact listed in the company’s communications directs to ARCO Publicidad’s email.

ARCO Publicidad’s clients include Econo supermarkets — which donated $100,000 to Democracia es Prosperidad — and Coors Light, which is distributed in Puerto Rico by V. Suárez & Co., a company that donated $50,000 to the Super PAC.

According to DEP Publicidad’s reports, the agency did not provide services to any other campaign committee and billed $2.7 million in 2024 for services rendered to Democracia es Prosperidad. The reports do not detail the fee the agency retained from that billing. In response to CPI’s inquiries, DEP Publicidad refused to disclose the commission charged for its services and referred the outlet to the available public information.

The amount of the invoices reflected in DEP Publicidad’s reports covers the months from January to November, while the $2.3 million in expenses reported by Democracia es Prosperidad corresponds to the period from August 2023 to September 2024. The most recent committee report available on the OCE website was filed on October 21.

In addition to media advertising and the production of Democracia es Prosperidad ads, DEP Publicidad provided consultancy work, social media ads, and other related services. “It was the ‘full-service’ agency for Democracia es Prosperidad,” the Super PAC stated in written comments to the CPI.

According to OCE data, the Super PAC received nearly $2.9 million in donations. Private sector donors include Media Ventures LLC, Triple S, MIDA, Bella Group, the Puerto Rico Chamber of Commerce, Medalla Distributors, Campo Alegre, and Ballester Hermanos. Ballester Hermanos and Bella Group were companies that, before the elections, sent letters pressuring their employees not to vote for the Alianza de País candidates, Metro reported.   

Unlimited Income and Expenses

Super PACs — which emerged in 2010 because of the federal case Citizens United vs. Federal Election Commission (FEC) — conduct advertising campaigns for or against a candidate and can receive money from individuals, corporations, unions, and other political action committees. They can raise and spend money without limits but cannot coordinate directly with the candidates they support, their campaigns, or political parties.

“[A Super PAC] can spend $1 million on one candidate and $5,000 on another,” said Vélez Martínez. “The case is specific; it will not have limits as long as there is no coordination. If there is coordination and we verify that any Super PAC has coordinated, then the limits apply,” he added.

Coordination refers to direct communication and collaboration between a Super PAC and a candidate or their campaign. According to the FEC, certain criteria determine if communication between a candidate and a Super PAC constitutes illegal coordination. Coordinated spending occurs, for example, when a Super PAC produces or distributes content at the request of a candidate or political party. It also happens when the content of a communication is agreed upon and when the same provider is used, meaning an advertising agency contracted by a candidate cannot be hired by the Super PAC to create ads in favor of that candidate, explained Vélez Martínez. ARCO Publicidad and Guardarraya Communications have no reports in the OCE, so it is understood they did not conduct campaigns for any candidate, the CPI verified.

The breakdown of money allocated to each candidate is not part of the elements evaluated to determine if there was any coordinated spending, said the Electoral Comptroller. “The amount of money spent on a candidate for an elective position supported by a Super PAC does not fall within the criteria established by state federal law to establish coordination,” he emphasized..

Vélez Martínez indicated, however, that the breakdown of the amount allocated per candidate could be known during the audit process — which has already begun but not yet concluded — since campaign committees must provide detailed invoices that could show the ads placed by candidate.

In addition to Democracia es Prosperidad, there are nine other active Super PACs in Puerto Rico, according to the OCE. These include Equal Rights Access for Educational Leadership Alliance, Inc. (ERA ELA), which conducted campaigns in favor of statehood in the plebiscite; Puerto Rico en Marcha; Comité de Pueblo Ada Norah Henriquez Gobernadora Write In; and Equality 51, which spent only $1,100 on advertising services. The committees VAMOS Concertación Ciudadana; Self-Determination Incorporated; Igualdad Futuro Seguro; Movimiento Republicano de PR; and PRAR-IE, formed by real estate brokers, were active, although they did not register advertising expenses.

In 2024, ERA ELA — registered in 2020 as a Super PAC — spent nearly $3 million for advertising services, paid to The Unicom Group, Inc. and United Social Business, according to the reports. The committee did not report income, as it is exempt from disclosing the donations it received. This was made possible through the executive order issued for the political status consultation, signed by Governor Pedro Pierluisi, which states that nonprofit entities organized under Section 501 of the federal Internal Revenue Code “are not required to disclose their membership or the donations received.”

In the United States, meanwhile, there are 2,491 Super PACs, which raised a total of $5 billion in the 2024 election cycle, according to the nonprofit organization OpenSecrets.

Currently, under Puerto Rican law, any Super PAC registered in the United States can spend on the island without registering locally, so they are not required to file income and expenditure reports with the Office of the Electoral Comptroller, according to Vélez Martínez.

“We submitted an amendment for the Legislature to evaluate and approve the amendment that to spend in Puerto Rico, they must register in Puerto Rico, open a bank account in Puerto Rico, and file income and expenditure reports in Puerto Rico, because otherwise, we have no visibility of the spending being done, of the donations being made,” said Vélez Martínez. “It has remained pending in the Legislature, it was never approved,” he added.

In 2023, representatives José “Conny” Varela Fernández and Lisie Burgos Muñiz presented, at Vélez Martínez’s request, a bill that included amendments to the Oversight of Political Campaign Financing in Puerto Rico Act (Act 222 of 2011). Among the amendments was that political organizations registered in the United States must register as campaign committees with the Puerto Rico Office of the Electoral Comptroller if donations or expenses exceed $1,000. The bill was assigned to the Commission for the Study and Evaluation of Puerto Rican Constitutional Law and Proposals for Amendments to the Constitution, chaired by Varela Fernández, which issued a positive report on the legislative piece. According to the Legislative Tracking System, the House of Representatives did not vote on the measure.

Varela Fernández presented another bill in February to require Super PACs established outside Puerto Rico to register with the Electoral Comptroller. The lower chamber approved the measure in March 2024, but no further action has been taken since then.