Thursday, June 4, 2009

Roundhouse Roundup: Sonny the Landlord

A version of this was published in The Santa Fe New Mexican
June 4, 2009

A major contributor to Gov. Bill Richardson's re-election campaign who made $3.2 million on a controversial land deal with the state three years ago is making $26,000 a month as the New Mexico Finance Authority's landlord.

Since March 2005, Sonny Otero and his wife, Lorraine Otero, have leased the three-story building at 207 Shelby St., between Alameda and Water streets, to NMFA.

The lease started out at $18,750 a month for about 12,500 square feet of office space. That figure included utilities and downtown parking spaces for the agency's 36 or so employees. A few months later, NMFA exercised its right of first refusal and leased an additional 2,500 square feet in the building, bringing the monthly rent up to $22,500. That figure also included utilities and parking.

The rent went up again last year. In May 2008, the monthly rent increased to $26,000. The extra money, according to an amendment to the lease contract, was "to cover extraordinary utility costs, insurance, taxes and parking fees."

NMFA Executive Director Bill Sisneros said Wednesday that the bulk of the rent increase went to cover bigger electric bills caused by the agency's computer servers and air conditioners needed to keep them cool. The increase represents about half of the increased electric bill, Sisneros said.

Never talked to governor: Without even being asked about it Wednesday, Sisneros said, "I never talked to Richardson about this."

The assumption that the Richardson/Otero relationship would be on a reporter's mind was logical.

Otero, a Santa Fe building contractor, donated $58,250 to Richardson's 2006 gubernatorial campaign. (Technically, $6,250 of that was contributions from Otero and his wife.)

As revealed by The Albuquerque Journal in 2006, nearly all of that figure, $50,000, was contributed two months after the state bought 12 acres owned by Otero and his family at Valdes Industrial Park, on Santa Fe's southwest side. The Oteros' share of the land deal was $5.9 million. The family had paid $2.7 million for the parcel in 2003. The Journal recently pointed out that more than three years after the state bought that land, it's still vacant and there are no current plans for it.

The New York Times in January wrote about the Otero deal in a story about New Mexico's notorious lack of ethics laws. In that story, both Otero and a Richardson spokesman denied that the governor had any involvement in the land deal.

Otero, who couldn't be reached for comment Wednesday, said in 2006 that the price he got was well below market value.

Sisneros said Wednesday that the Richardson contributions weren't part of the considerations that led NMFA to rent from Otero.

Sisneros said when he became the agency's director, NMFA was headquartered in an office compound near Old Santa Fe Trail and St. Michael's Drive. Space was cramped and offices were housed in three separate buildings.

In addition to Otero's Shelby Street building, the agency also looked at office space on Rodeo Road. However, NMFA would have had to pay for improvements plus all utility costs at that location, Sisneros said. The Shelby Street building, he said, was the best deal.

The Finance Authority is a quasi-public agency that issues bonds and makes loans to provide low-cost financing for local and state governmental projects. Sisneros said NMFA handles about $2.9 billion in investments. Though the 12-member authority officially isn't under direct control of the governor, it's made up mostly of department heads and others who are appointed by the governor.

NMFA has been at the center of a grand jury investigation into a possible pay-to-play scheme involving CDR Financial Products, a company that won lucrative work handling the financing of state transportation projects at about the same time it was making more than $100,000 in contributions to Richardson political committees. David Harris, who was NMFA director immediately before Sisneros, is one of the figures involved in the investigation.

Other Sonny contributions: The $50,000 check Otero gave Richardson's campaign in March 2006 is by far the largest political contribution the contractor ever made, checks of state and federal campaign contribution record databases indicate.

Otero also gave $4,600 to Richardson's 2008 presidential campaign, as did his wife, Lorraine. (Half of those contributions were returned because they were earmarked for the general election. Richardson dropped out long before the general election.)

And going back to 2002, Otero gave Richardson $14,000 in his first run for governor.

Although Richardson by far has been the chief beneficiary of Otero's contributions, he's not the only Democratic New Mexico politician to get Otero's help.

Last year, Otero gave $3,550 to U.S. Rep. Ben Ray Luján's campaign and $500 each to U.S. Reps. Martin Heinrich and Harry Teague. Lorraine Otero also gave Luján's campaign $2,300.

In 2006, Sonny Otero contributed $7,500 to Lt. Gov. Diane Denish's re-election campaign.

That same year, he contributed $300 to Mayor David Coss' campaign. In 2004, he gave $750 to Peter Wirth's successful race for a New Mexico House seat. (Wirth is now a state senator.) In 1998, Otero and his wife gave $3,000 to Democratic gubernatorial candidate Marty Chávez, the Albuquerque mayor.