DONORGATE

By MICHAEL WEISSKOPF/WASHINGTON

When historians hunt for telling moments in the 1996 Donorgate scandal, they may point to a White House coffee in December 1995 when would-be giver RUBEN VELEZ, apparently unaware of the law against contributing in the Executive Mansion, tried to hand over five checks. Velez, Puerto Rico's biggest builder, may have had more than protocol on his mind.

According to interviews and documents obtained by TIME, Velez was angling to buy prime real estate in downtown San Juan, a sale that required approval of the Department of Housing and Urban Development. Velez denies that the checks, written by friends and business allies, were intended to strengthen his hand in negotiations with HUD. Nor was that the purpose of a $50,000 donation to the Democratic Party in May 1996. Still, two months later HUD granted him tentative approval to buy the site on an installment plan. But when ANDREW CUOMO became HUD Secretary after the election, the deal was undone. Cuomo demanded payment in full. Disappointed but undaunted, Velez has renewed his bid, this time teamed with a new lobbyist, MICHAEL BROWN, son of the late Democratic Party chief and Commerce Secretary Ron Brown.

--By Michael Weisskopf/Washington