As Bronx Republican Chairman
In 1986, Velella became the chairman of the Bronx Republican Party. He resigned that position in 2004. Critics charged that Velella did nothing to build the local GOP and maintained a "non-aggression pact" with the Bronx County Democratic organization. With the exception of himself, no other Republican was ever elected to any office in the Bronx during his 18-year term. In 1994 and 1996, Velella ran with the endorsement of the Bronx Democratic Party.
Although he maintained a cordial and mutually-beneficial relationship with the Bronx Democratic political machine, Velella did work hard to get Republicans elected to prominent offices. In 1992, Velella campaigned for Senator D'Amato, who was facing a tough re-election fight against Democratic challenger, New York Attorney General Robert Abrams. D'Amato was narrowly re-elected. Velella and Giuliani put aside their previous animosity, and the Bronx Republican leader enthusiastically campaigned for him in 1993. On Election Day, Velella oversaw a "ballot security program," which sought to deter voter fraud at the polls. In 1994, Velella devoted his resources to the Pataki and Vacco campaigns, which were both successful.
In 2001, Velella endorsed former Bronx Borough President and Congressman Herman Badillo, who became a Republican in the 1990s, in the race to succeed the term-limited Mayor Giuliani. In the Republican primary, Badillo faced billionaire Michael Bloomberg, who won the endorsement of the city's four other Republican county chairmen in Manhattan, Queens, Brooklyn, and Staten Island. When Velella realized he was the only Republican county chairman in the city supporting Badillo, Velella stopped actively campaigning for Badillo and publicly called on him to withdraw from the race. Velella explained to the New York Post that he didn't like primaries although he enthusiastically backed Lauder in 1989 against Giuliani. Bloomberg won the primary handily. Velella then campaigned for Bloomberg, who went on to narrowly defeat Mark Green in the general election.
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