This morning, I spent 30 minutes with Madelyn Lugo, chairperson of the National Puerto Rican Day Parade (NPRDP) organization. We covered several issues surrounding the latest developments with the official Coors parade can that has led to controversy in New York City’s Puerto Rican community. We also discussed the request by the state attorney general to have NPRDP present more details about its relationship with private companies like Coors, as well as her thoughts about the political and economic interests Lugo claims are trying to discredit the parade. We are publishing the full interview here.
JRV: Specifically, Ms. Lugo, regarding your CNN Latino interview with Fernando Del Rincón on Friday, you said that there were people that had political and economic interests that wanted to gain economically from a switch in leadership in parade’s board, do you have specific names? Can you expand more on that? What does that mean?
LUGO: It’s always that when the parade comes, it’s mostly the same people that create problems or create controversy for the parade. You always see the same politicians or the same people in the community that create that type of controversy. I am not pointing fingers at anyone or any organization, but I think that today, these groups are called one name, tomorrow another name. It’s the same people that are involved in the group.
JRV: Who are those people?
LUGO: I am not pointing out names, I am just pointing out that it is a group, it is different people. And I don’t want to be unfair mentioning one and not mentioning the other.
JRV: So you’re making a general observation about economic and political interests, saying that it’s a group of people, but you are not willing to share who they are.
LUGO: At this point, I am not willing to give specific names. It will come. It will come to the point where I will mention them, but not at this point, because they know who they are, they know why they are doing this, so I think that’s it’s not efficient to mention them.
JRV: Ok, that’s fine. I am not trying to press you, but it just seems a little bit curious as to why such a comment gets made and no names are being mentioned and no groups are being mentioned.
LUGO: At a later time it will be mentioned but at this point, it is not important for me to mention those names.
JRV: But you are saying that you will eventually?
LUGO: Eventually, eventually in the future…
JRV: You’ll let me know then?
JRV: When you are ready to share names, please let me know?
LUGO: I will.
JRV: You also said that this happens every year, but I was curious because the only two current examples that I have known of for the past two or three years were different groups and different people and Boricuas for a Positive Image actually was formed in 2012 after the ABC “Work It” drug dealer controversy…
LUGO: Right, you are completely right on that. But you see, the same people that were involved with that group are the same people who were involved with the other group.
JRV: It just seems that there is talk about all these groups, but…
LUGO: Well, it doesn’t matter what the group’s name is called, today, they’re called that name, tomorrow they’ll be called another name, and in the past they were called something else. But it has been a history of opposing the parade for over 40-45 years, it has been the same group.
JRV: You also spent some time talking about GALOS Corporation, and I know you talked to the New York Times, and I just want to confirm. Can you speak more to the history of how the beer can was approved, how it was not approved, who approved it, what was so offensive about the first iteration of it? Can you share more details about that and how that happened?
LUGO: The first art that we saw from Coors, the first art that was presented to us, we the board believed that it was insulting for all in the community because we had experienced already a problem with the previous advertising in 2011 in terms of how people were misled by the word in that advertising, so whatever wording was there [in the first art of the 2013 product], it was eliminated completely from the art that they showed to us.
JRV: And what was that wording?
LUGO: It was wording that said “Ruta hacia el desfile” (“On route to the parade”), or something like that. I think that was insulting because if “emBORÍCUATE” (“Puertoricanize yourself”) showed the wrong meaning and caused a protest, “Ruta hacia el desfile” would have been the same as “emBORÍCUATE.” So we decided that Coors should not use that type of language in there. They could use something else, but nothing unrelated to the parade. It was important for the board to make sure that the community would not feel insulted by any of our advertising. The parade is the pride of cultural heritage and celebration. It’s not a type of organization that we would want controversy out there.
JRV: Did it say “official beer” or was it marketed as an official beer at that time?
LUGO: Yes, the marketing language did say “official beer.”
JRV: Did the entire board look at that product?
LUGO: Coors participates in the parade, but they are the official beer in terms of our Gala Dinner. Our Gala Dinner is the only place where we have alcoholic beverages.
JRV: Got it, but my question is, did the entire board of the National Puerto Rican Day Parade look at that initial product and look at the revised product before it was approved? Did everyone on the board have a say in it?
LUGO: Everybody on the board had the opportunity to express their concerns. There’s always a discussion to share concerns, yes, everybody on the board.
JRV: So, everyone on the board looked at it before it was approved?
LUGO: The day when they presented the art, maybe one board member or two board members were not present, but at that moment the majority of the board saw the art.
JRV: Ok, so I just want to be absolutely clear that it’s fair to say that not everyone on the board was present to approve the beer, but they were given the opportunity, but some board members did not see the product until after the fact. Is that fair?
LUGO: It’s fair. It’s fair, because it’s the truth. It was not the whole board that was present, I believe it was one board member that was not present, or two. But the rest of the board was there.
JRV: I was able to look into the financials describing the GALOS and the relationship it has with…
LUGO: GALOS relationship is our marketing agent. He [Carlos Velasquez] has a professional services contract that was approved by the board of directors and also submitted to the attorney general’s office for approval. We cannot do business with any professional company in the state of New York until the attorney general approves the contract. We went through the entire process as required by the attorney general, and that is why we are doing business with GALOS. He is our marketing agent.
JRV: According to your financials which we published yesterday, the current setup is 33% commission, correct?
LUGO: Right now, GALOS Corporation, according to the contract, he should be getting 33%, but he is not getting 33%. He is billing us 27%, as per previous years.
JRV: So the information with the attorney general where it states 33%…
LUGO: He can get up to 33%, that is correct. He is not getting 33% but he can get up to 33%.
JRV: So voluntarily he’s lowered his commission from 33% to 27%?
JRV: Looking at the financials, where do I find the actual revenue generated from sponsors? It was really hard to find on the IRS form, because when I do the math, I am not getting the revenue if I use 27% of what GALOS is making.
LUGO: Remember that GALOS Corporation only gets 27% of whatever money that comes into the parade.
JRV: I understand that, but where is the total gross revenue of the sponsorship?
LUGO: It appears in the activities section but it doesn’t only show GALOS Corporation. It shows all money that was raised by the parade.
JRV: Right, I’m just basically asking, if GALOS gets 27%, which is around the $89,000 that was reported in the financials in 2011, is there a line item that says, the revenue coming in from sponsorship is say, $350,000? It doesn’t seem like the math is adding up? I was trying to make sure that I was looking at the right line item?
LUGO: You are not going to get the math off the financials from the 990 form because there you have the global money that comes from all activities that the parade has. GALOS is not bringing in all the income into the parade, it is also income that we raise on our own. The GALOS Corporation sends his report to the AG’s office, that’s a public document. You can go to the AG office and look at the report there. You can see how much GALOS Corporation brings into the parade.
JRV: Ok, I can find that publicly via the AG and GALOS. That’s fine.
LUGO: You can find that under GALOS Corporation because by law he has to file a financial report showing whatever activities he has with the National Puerto Rican Day Parade.
JRV: I just have a couple of more questions. Can you talk about where the sponsorship money goes then?
LUGO: The sponsorship money goes into all of the parade activities. It’s not just the parade on 5th Avenue. People believe that that the National Puerto Rican Day Parade, they only focus on 5th Avenue. That is not the only thing the National Puerto Rican Day Parade does. We do a festival that is free to the community, we have two stages with musical bands that we are paying for the full activities, and not charging anything to the community. We also do a fiesta for our seniors that is a parade activity paid in full by the parade. We have to raise money for that. We have the scholarship program. We have the Juegos Boricuas and the Torneo de Dominó the Saturday before the parade. This is free of charge for all our community. We have different activities that we raise money for to give something back to the community because if we don’t have the funds, we can’t host those activities. Besides that, we have to pay insurance after 9/11, we have to pay a huge insurance to the City of New York to maintain the parade on 5th Avenue. We have to put toilets on 5th Avenue. It is not free of charge. We have to pay the city for the places where people are sitting. It’s a lot of expense involved in terms of the parade and parade-related activities.
JRV: So how much do you need to raise a year right now?
LUGO: In order to cover our activities, we have to raise over $500,000 in order to cover our activities and all the activities related to the parade. We have a breakfast, we have a big breakfast before the parade on Sunday. We don’t charge anyone money for that. Everyone in the community goes to the breakfast free of charge.
JRV: Talk about the scholarship money. How much scholarship money is given out every year?
LUGO: Every year it depends how much we get from our sponsors. It depends how much the sponsor can offer. That’s the amount that we are giving out.
JRV: So how much is that? Can you share?
LUGO: It’s between $10,000 to $20,000.
LUGO: In total, $10,000 to $20,000.
JRV: A year. Ok. I just have a couple more questions. So GALOS is not a Puerto Rican-owned agency, is that correct?
LUGO: GALOS? If you know the history of Carlos Velasquez, he is half Puerto Rican and half Colombian. He has half Puerto Rican cultural heritage, so saying that he is just Colombian is wrong.
JRV: Have you ever gone and considering that 33% commission is a pretty high number…
LUGO: That number is below that what the industry is offering.
JRV: For non-profits?
LUGO: For non-profits, yes.
JRV: Are you sure?
LUGO: Whatever he is charging right now is below market.
JRV: For a private company working with non-profits?
LUGO: Right, for a private company working with non-profits.
JRV: So do you guys go through a competitive process to find other agencies?
LUGO: We did in prior years with different agencies, and there were offering us over 50% commission. That is unacceptable for us. I don’t know if you know the history of Carlos Velasquez. Carlos Velasquez has been working with this parade for over 40 years, he was at one time, he was a board member of the whole organization.
JRV: And you don’t see that as being too close to home? Do you believe that GALOS has the best interests of the parade in mind?
LUGO: I believe that since he is the marketing agent, he has to have the best interests of the organization in mind in terms of providing the organization the opportunity of providing the parade to our community.
JRV: Even with the recent controversies, you still believe that they have the best interests of the community in mind? I’m not trying to have bring their intentions in question, I’m just trying to get a better sense of the last three years with Coors, you’ve had some high-profile incidents…
LUGO: You know something, mistakes happen. Every board has a learning process, and I don’t think that everyone or people who create controversy with this, they make their own mistakes, too. So I think this is a learning process that everybody has a responsibility for and has to take care of it, and has to take care of policies in the future.
JRV: Will you be setting up new policies after the parade?
LUGO: We’re working to draft new policies after this parade. We will start drafting new policies about operations and new policies in terms of marketing the parade. There will be new guidelines that we will put in place.
JRV: So when you release your responses to the state attorney general, after your release, will that be shared with the press?
LUGO: After we release the package for the attorney general packet, I think it is a public document. We would not have any objections in sharing documents because the attorney general’s office will already have it. It will be public by the time he already gets it, so by law he is going to have to make it public.
JRV: After your share it and submit it, can you let me know so I can read it?
LUGO: That’s no problem. As soon as we have the green light to send it, we will provide all documents at that that time. As soon as my attorney says “go ahead,” we will release the packet to whoever is interested. Everybody can have the packet.
JRV: Finally, what have you learned from this experience? The reaction has been pretty massive through social media. You do have Councilor Melissa Mark-Viverito appearing on CNN Latino’s Panoroma last night, saying that she is just doing her job to bring the parade back to the people.
LUGO: You know something, now you mention names, you have 52 weeks in a year: never, never, never, since I have been involved in this parade and I have been involved in this parade for over 20 years, and I have been leading the parade for six years, never, never, ever in all those years, that person has never been that close to the parade, never has called the parade, has never come to offer any help to the organization, never volunteered for the parade, never put anything on our table for the parade. So how can you say that it is your responsibility when you have never offered any kind of help to the organization?
JRV: Did you see her interview last night?
LUGO: No, I did not see it.
JRV: One of the things that she told Fernando was when that when things are going well, nothing gets brought up, but where there are questions, they get raised. It’s not just her, it’s about four or five other state senators and local city politicians. All those other people who have written the letter to you, have they been involved in the parade?
LUGO: None of them has come to the parade. Maybe one of them has applied this year to march or last to march last year, but the rest, they’ve never applied, they’ve never paid any fee to participate in the parade. They’ve never called and let us know that they are interested in marching in the parade.
JRV: And you’ve never invited them?
LUGO: We invite everyone. We have a person who calls every single elected official and invite them to participate. None of those people who signed a letter have been part of our parade officially.
JRV: This is my last question. In terms of the scale of the parade, in terms of of it all, it is a pretty big machine that you have to fund. Have you ever considered lowering the scale and scope of the parade so that it doesn’t become such a big task every year?
LUGO: When we decided to go national, we wanted to empower the Puerto Rican community nationally. The parade got bigger because when we went national, we invited all the groups from other states to come and be part of our parade. I think that this is nothing that is bad for the community. On the contrary, we empower the Puerto Rican community, and not only the Puerto Rican community. We have empowered the Hispanic and Latino community as well. Besides, people think that this parade is big. We have a deadline that we have to cut with applications because if we continue accepting applications, we would never get out of it. You can only imagine, the goal of the organization, not only for the states, but for Puerto Rico, calling us saying that they are interested in participating.
JRV: It seems like the consequences that came out of this for you guys is that you’re rethinking your policies and your guidelines. Is there anything else that you’ve learned about this experience besides that? Is there anything else you want to share?
LUGO: You know what we learned about this? That we as a group, as a community, we have to be together. I don’t think what is the reason that we’re fighting to create controversy instead of having those people who have concerns come and talk with us about how we can get into agreement to make sure that our community looks good and healthy and empowered, and it doesn’t look that we are fighting each other about something that means nothing else to no one because this organization does not belong to anyone. It belongs to the Puerto Rican community.
JRV: I appreciate your time, Ms.Lugo.
LUGO: Thank you.
We concluded the interview but as we were finishing, there was a discussion about how the parade’s private sponsors give scholarships to city kids.
JRV: If you are saying that you are giving $10,000-$20,000 in scholarships each year, and you are now saying that you are giving more scholarships, where is that money coming from?
LUGO: It comes from other sources that give the scholarship money directly to students.
JRV: Not through the parade? I just want to make sure I get this right.
LUGO: We have sponsors that give money to us and some sponsors that give the money directly to the students.
JRV: I’m confused.
LUGO: This is something that I don’t show in my income, it is not money that I don’t disburse.
JRV: I’m really confused.
Lugo then explained that there are two ways scholarship money is given out to students. One is through the parade. which accounts to $10,000-$20,000, and another way is that companies give money directly to scholarship fund in the name of the parade.
I asked how much money is given through the second process to these students, and Lugo said that this information will be included in the packet being sent to the attorney general.
LUGO: Our marketing agent has the information that shows how much money each sponsor gives to students. We’re going to give whatever we have on record to the attorney general. We have all of that. I have no concerns in terms of the attorney general’s office. We do what we have to do as a non-profit. Whatever comes into the organization is given back to the community. I think the attorney general has the right to look into any non-profit to ensure that we are running the organization according to the law.
Julio (Julito) Ricardo Varela (@julito77 on Twitter) founded LatinoRebels.com (part of Latino Rebels, LLC) in May, 2011 and proceeded to open it up to about 20 like-minded Rebeldes. His personal blog, juliorvarela.com, has been active since 2008 and is widely read in Puerto Rico and beyond. He pens columns on LR regularly. In the last 12 months, Julito represented the Rebeldes on CBS’ Face the Nation, NPR, Univision, Forbes, and The New York Times.