Scandalpalooza

I did a little round-up  in today's New Mexican of where New Mexico's major political scandals are standing at the moment.

These included the criminal cases against former Secretary of State Rebecca Vigil-Giron, former Region 3 Housing Director Vincent "Smiley" Gallegos, the now-dismissed indictment of Judge Mike Murphy and the State Investment Council civil suits.

You can find that story  HERE.

In the original version of the story I failed to note that the two cases filed in May by the State Investment Council have been boiled down to one case, which is in the state court system. Below is the amended complaint filed in June, which explains the allegations against Gary Bland, Guy Riordan, etc.
Amended SIC Complaint

The Official No-Comment

I ran into former Gov. Bill Richardson about an hour ago. He was in the Capitol TV studio for some appearance on a national news program.

Naturally I asked if he had any comment on the recent law suits against former State Investment Officer Gary Bland, Guy Riordan, Anthony and Marc Correra, etc.

Naturally, he said he didn't have a comment.

SIC Files Suits Against Gary Bland, The Correras, Guy Riordan and Others

The State Investment Council has filed two civil lawsuits alleging that the state was the victim of a pay-to-play scheme.

A suit filed in state district court names as defendants former state Investment Officer Gary Bland and Guy Riordan, a former broker and former friend of Gov. Bill Richardson.

"During Bland’s tenure, Governor Richardson’s supporters and senior members of his staff requested Bland to secure political contributions from investment management firms that had received fees in connection with investments made by the Public Trust Funds," the complaint says.

"During his tenure, Bland caused NMSIC to make alternative investments for the purpose of benefiting politically-connected individuals, rather than solely on the basis of the underlying merits of the alternative investments. Collectively these investments involved a commitment of more than ($2 billion) of the Public Trust Funds’ assets."

Bland told The Associated Press today that the lawsuit was "absurd." I left a message for Riordan, but haven't heard back.

The suit says Riordan "was paid substantial fees in connection with alternative investments made by NMSIC."

In a federal suit the defendants include Anthony Correra, described in one of the suits as "Gov. Richardson’s personal friend, fund raiser and confidante" who often purported to speak for the governor; his son Marc Correra, an investment broker who shared in $22 million in third-party marketing fees; and several figures from the New York investment scandals, including Saul Meyer; the Texas-based Aldus Equity Partners, which for years was the SIC's investment councilor, and Hank Morris, political advisor and fundraisier for former New York State Comptroller Alan Hevesi.

Hevesi is not named in the New Mexico suit, but his son Daniel is. Both Alan Hevesi and Morris were sentenced to prison this year in the New York scandals.

In a news release State Investment Officer Steve Moise said, “The State Investment Council takes this action today in hopes of recovering millions of dollars improperly taken from the citizens of New Mexico by those who violated their professional duties and the public trust, and their cronies who participated in and profited from such breaches of duty."

The same news release quotes Gov. Susana Martinez, who is chairwoman of the SIC, saying "As we wait for justice in the criminal courts, we must aggressively pursue legal action of our own. These efforts must continue until all responsible parties are held accountable for the abuses that occurred here in New Mexico.”

Martinez called upon the investment managers who entered into payment arrangements with third party placement agents to obtain SIC investment business to contact the Attorney General's Office and fully disclose the details of those arrangements “before the Attorney General knocks on their doors.”

Representing the SIC is the Attorney General's office and the Day Pitney law firm, which also represents the New York comptroller's office in trying to recover lost investments.

I called Richardson's office for comment, but a spokeswoman said he's traveling and couldn't immediately be reached. If I hear back, I'll update this.

UPDATED 5-10-11: Here's a copy of the federal suit as well as the complaint in state court.

Federal & State Lawsuits SIC

AG Opinion: State Shouldn't Have to Pay Malott For Legal Expenses, PR Firm.

State Attorney General Gary King's office released a long-awaited opinion on a question whether the state should have to reimburse former Education Retirement Board Chairman Bruce Malott for legal expenses and other costs related to lawsuits and federal investigations related to ERB investments.

Malott racked up at least $300,000 in legal fees from private attorneys. He's also been represented by state lawyers in the case. He also hired a public-relations firm. Malott has threatened to sue the state if he doesn't get reimbursed.

The opinion said:

... in light of the other statutes that provide legal representation to state officers and employees, we do not believe it requires the state to reimburse Mr. Malott and other ERB members for expenses resulting from privately retained counsel, particularly when an attorney has been made available at state expense through (the state Risk Management Division….)

Earlier this year, members of the Legislative Finance Committee balked at the pay-out, but they don't have the power to stop the ERB from setting aside money in its budget for such reimbursements.

Malott resigned from the board in September following the revelation that he'd taken a $350,000 loan from Anthony Correra, a friend and financial backer of Gov. Bill Richardson. Correra's son, Marc Correra, shared in millions of dollars in finder's fees from investments by the ERB and the State Investment Council.

Update 4:08 pm: ERB executive director Jan Goodwin just told me that Malott never has submitted formally a request for reimbursement. So unless Malott does submit such a request, nothing will happen.


Asked what she thought of the opinion, she would only say, "We're glad to have it."

Correction: An earlier version of this post misidentified the Legislative Finance Committee, calling it mistakenly, the "Legislative Council."

UPDATE 4:56 pm Here's a copy of the AG's opinion.

3 Dec 10-Jan Goodwin-Opinion 10-05

Keller Calls For More Investment Reforms

State Sen. Tim Keller, D-Albuquerque, who was one of the sponsors of bills to reform the troubled State Investment Council early this year, says the Legislature needs to "finish the job."

Thus he's proposing a new package of investment reforms, which is scheduled to be considered Wednesday by the Legislative Investment Oversight Committee.

Keller's top suggestion is removing the governor completely from the SIC. Last year Keller backed legislation that reduced the governor's influence on the board. But now that there's going to be a Republican governor I wonder how many GOP lawmakers will jump on this bandwagon.

Here's all of Keller's proposals from his news release this morning:

• Remove Governor from the SIC: The number one recommendation made by the Ennis Knupp research, which was completed in 2010, was to remove the Governor as chair of the SIC. SB 18 in 2010 attempted this but was amended at late stages in the legislative process to keep the Governor on the board. This bill would remove that seat entirely, yet would acknowledge and ratify the executive branch responsibility via several executive appointed seats and representation from the Secretary of the Department of Finance and Administration. As previously mentioned, New Mexico is currently the only state in the country with a Governor personally residing on the state's investment fund board and directly responsible for investment decisions.

• Investment Fraud Accountability: Appealing provisions that give the Attorney General investigative authority for securities fraud. Currently the authority rests within the executive branch (inside the licensing and regulations department) creating a structural conflict of interest. This bill also broadens the threshold for prosecution of fraud (N.Y. Gen. Bus. Law Art. 23-A (McKinney)), thus enabling the recovery of a percentage of the estimated $1.3 billion currently under litigation throughout the nation.

• Educational Retirement Board (ERB) and Public Employees Retirement Association (PERA) Governance Reform: Enabling the implementation of several necessary governance and best practice changes from the 2009 Ennis Knupp study including: open meetings act, fiduciary duty, transparency and accountability measures. The bill would also address concerns regarding financial expertise by creating a new seat which would require the elected board member to posses a minimum of ten years of professional investing experience.

• Economic Targeted Investment Oversight: Proposing the establishment of a formal structure and performance metrics for all the Economic Targeted Investments (ETI) (NM private equity, film fund, etc) to be managed separately by the SIC. Utilizing the current statutory Private Investment Advisory committee (PIAC) structure, the newly established board (SIC PIAC) would be specifically responsible for effective oversight regarding ETI funding as well as any merit based recommendations presented to the SIC. In addition, the bill would separate performance tracking in order to prevent the co-mingling of ETIs with “endowment” funding.

• SBIC Governance Reform: The small business investment council (SBIC) is a subsidiary of the SIC that invests an estimated $45 million in New Mexico small businesses. This program has been successful in creating jobs and providing financing to small businesses around the state. However, there is a need to depoliticize the appointment of the SBIC board to ensure that investment principles are prioritized before politics. By incorporating appointees from the legislature the bill would diffuse any one person's potential influence over investment choices and would ensure altruistic decision making.

NM 3rd Party Marketer Pleads Guilty in NY Case.

A former Democratic Party consultant turned "third party marketer" for investments pled guilty today to fraud in New York.

From The New York Times.

"I intentionally engaged in fraud, deception (and) concealment," Henry "Hank" Morris said, his voice low but steady as he admitted being at the fulcrum of the pay-to-play scheme at the $125 billion retirement pool, one of the world's largest government pension funds.


Morris acknowledged using his ties to former state Comptroller Alan Hevesi to get millions of dollars in payouts for himself, to channel money to cronies and to solicit campaign contributions for Hevesi from firms seeking state business.

But neither The Times nor the New York Daily News, at least in initial stories on the plea, mentioned Morris' dealings in New Mexico, where a company he was afiliated with was paid 150,000 in third-party marketing fees secure a $20 million investment in a fund from our State Investment Council.

Morris has not been charged with any wrongdoing for his dealings with New Mexico.

Last year Saul Meyer, co-founder of Dallas-based Aldus Equity Partners, pled guilty in the New York pay-to-play scandal. Aldus was contracted as the adviser to the New Mexico SIC and this state's Educational Retirement Board.

In his plea statement to a New York court, Meyer said he recommended investments in New Mexico because of political pressures, saying, "contrary to my fiduciary duty, I ensured that Aldus recommended certain proposed investments that were pushed on me by politically connected individuals in New Mexico. I did this knowing that these politically connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico."

Shortly after that statement, SIC director Gary Bland retired.

Denish to Donate Malott Money to Charity -- But Not $$ from Mallot's Company

A version of this was published in The Santa Fe New Mexican
September 3, 2010

The day after Bruce Malott, the chairman of New Mexico’s educational pension fund, resigned over a questionable $350,000 loan, Democratic gubernatorial candidate Diane Denish’s campaign announced it was donating to a charity more than $4,000 in campaign contributions from Malott — whose company once kept the books for the Denish campaign.

“In light of today’s revelation, the campaign immediately donated donations from Mr. Malott to a New Mexico nonprofit that supports our early-childhood education professionals,” Denish spokesman Chris Cervini said in an e-mail Thursday. “It was the right thing to do.”

However, records kept by the Institute on Money in State Government show that in addition to Malott’s personal donations, his company, the accounting firm of Meyners & Co., gave Denish $8,750 since 2007.

Malott and his business also have contributed $4,500 to the campaign of Denish’s running mate, Brian Colón.

Asked about the extra thousands from Meyners, Cervini said, “We saw it more of an issue with Mr. Malott than with his company.”

Cervini acknowledged that Malott’s firm served as treasurer of the Denish campaign until this spring.

“The campaign switched treasurers several months ago for a number of considerations, including our concerns about the use (of) state funds for Mr. Malott’s legal defense,” Cervini said in his e-mail. Malott’s firm was listed as campaign treasurer on Denish’s October campaign finance report. But the next report, filed in April, indicated another company was doing the books.

The state paid at least $300,000 in legal bills for a private lawyer Malott hired to represent him in lawsuits over failed investments and a pending federal investigation into public investments. A state-appointed attorney also is defending Malott in the lawsuits. Several legislators have criticized the plan for state money to be used to pay private lawyers in the investment scandals.

Malott’s resignation from the Educational Retirement Board was reported Thursday in a copyrighted story by the Albuquerque Journal. The report said he stepped down after an interview concerning the loan from Anthony Correra, a friend and financial backer of Gov. Bill Richardson. Correra’s son, Marc Correra, shared in millions of dollars in finder’s fees from investments by the ERB and the State Investment Council.

Malott, an Albuquerque accountant, told the Journal he borrowed the money in August 2006 to pay federal and state taxes owed because of a tax-shelter dispute with the Internal Revenue Service.

Malott said that at the time of the loan he was unaware that Marc Correra had been receiving fees for helping money-management firms win investments from the pension fund and the SIC, which oversees state endowment funds.

Marc Correra shared in nearly $22 million in fees as a third-party placement agent, according to records of the state investment agencies. His lawyer, Sam Bregman — who also has represented Malott’s company — has said there was no wrongdoing on Marc Correra’s part.

Among the lawsuits in which Malott is involved is one by former Education Retirement Board director Frank Foy, who claims Malott pressured him into approving investments with the Chicago-based Vanderbilt Financial and related companies.

Denish’s opponent, Susana Martinez, was quick to jump on the connection between Denish and Malott.

“… It is clear that the culture of corruption is deeply rooted in the Richardson/Denish Administration and we are finding more conflicts and wrongdoing every day,” Martinez campaign manager Ryan Cangiolosi said in a news release Thursday. “Denish stood by Gov. Richardson’s side and has strong ties with almost all the individuals making headlines for their crooked deals, which have held New Mexico back. New Mexicans have a right to know who else in the Richardson/Denish Administration and their boards had financial interests in these taxpayer-funded deals.”

State records show Malott’s company was paid more than $10 million by the state for auditing services between the fiscal years of 2001 and 2006, according to records obtained last year by The New Mexican.

Meyners currently has 21 auditing contracts with various state agencies, Antonio Corrales, chief of staff for the state Auditor’s Office, said Thursday. The contracts total more than $2.1 million, Corrales said.

Gilbert Gallegos, a spokesman for Richardson, said Thursday that “the governor was not aware of the loan and he has accepted Mr. Malott’s resignation.”

Malott was initially appointed to the pension fund’s governing board by former Gov. Gary Johnson, a Republican, and he was reappointed by Richardson, a Democrat. Malott and his accounting firm had served as treasurer of Richardson campaign committees.

Malott submitted a terse resignation letter to the governor, saying he was stepping down immediately and he enjoyed being a board member for the past 11 years and appreciated the opportunity to have served during Richardson’s administration.

Anthony Correra served as a director of a nonprofit foundation that Richardson formed to do voter registration ahead of the 2004 presidential election. Malott’s company did the books for that foundation as well.

The elder Correra is a close friend of former state investment officer Gary Bland, who was appointed by Richardson but resigned last year amid a federal grand jury and Securities and Exchange Commission investigation into state investments.

Correra served on a committee that recommended Bland for the investment officer position after Richardson was elected in 2002. Anthony Correra and his investment management firm contributed $27,800 to Richardson’s 2002 campaign for governor.

The Associated Press contributed to this report.

Richardson in CREW'S "Worst Governors" List

Here's another national list where New Mexico is right toward the top: The Citizens for Ethics & Responsibility in Washington's 11 Worst Governors List.

Of Gov. Bill Richardson, CREW writes that he:

* Used state investments to benefit political allies
* Allowed pay-to-play scandals to plague his administration
* Rewarded close associates with state positions or benefits, including providing a longtime friend and political supporter with a costly state contract
* Failed to make state government more transparent

"In compiling Worst Governors, CREW reviewed the job performances of all 50 U.S. governors before identifying the worst 11, a CREW news release said. "Though ethics laws, campaign finance rules and financial disclosure regulations vary from state to state, CREW found these governors’ proclivities for corruption, cronyism and self-enrichment outweighed their competency, integrity and commitment to transparency."

CREW in 2007 criticized and filed ethics complaints against then New Mexico U.S. Rep. Heather Wilson and Sen. Pete Domenici for their roles in the U,S. Attorney scandal, specifically for calling then U.S. Attorney David Iglesisas about the Manny Aragon investigation. (Iglesias said the calls amounted to political pressure, which Domenici and Wilson have repeatedly denied.) The group also criticized then Rep. Steve Pearce for financial dealings. Pearce denied wrongdoing.

State Republicans, including the staff of the Congress members dismissed CREW as a "partisan" organization. I wonder if they'll do that now that Richardson is in the hot seat.

Richardson is one of two Democrats on the list, the other being New York Gov. David Patterson.

Others on the list include:

• Gov. Haley Barbour (R-MS);
• Gov. Donald Carcieri (R-RI);
• Gov. Jim Gibbons (R-NV);
• Gov. Bobby Jindal (R-LA);
• Gov. Sonny Perdue (R-GA);
• Gov. Rick Perry (R-TX);
• Gov. Mike Rounds (R-SD);
• Gov. Mark Sanford (R-SC); and
• Gov. Arnold Schwarzenegger (R-CA).


Here's the report:

CREW's Bill Richardson Profile

UPDATE: Why 11 and not, say 10 or a dozen? CREW's Peter Bjork told me in an email, "... we examined the job performance of all 50 US governors using common criteria, and felt that these 11 qualified as the `worst.' The list is unranked, so there wasn’t any need to strive for a nice round number."

ANOTHER UPDATE: Richardson spokeswoman Alarie Ray-Garcia responds: "This report is ridiculous considering Gov. Richardson has led the way for ethics reform in New Mexico. It's also difficult to take it seriously since it relies almost exclusively on the Albuquerque Journal as its source."

Senate Passes Bill to Create Independent Council to Recover Lost Investments

The Senate unanimously approved Senate President Pro-tem Tim Jennings' SB269, which would create an independent counsel to seek to recover investments lost by the State Investment Council, Educational Retirement Board and the PERA.

Jennings stressed that the special council would not be responsible for investigating possible criminal wrongdoing. But if evidence of a crime was uncovered, it would be turned over to the state attorney general, Jennings said.

The bill includes a $400,000 appropriation, which would be paid for out of the retirement funds.

"It makes more sense that to just say adios to these dollars," Jennings said.

Sen. Dianna Duran asked Jennings whose responsibility this would be without the special council. Jennings said it would be the attorney general's office and the investment boards themselves. But there hasn't been much action by those agencies, he said.

Sen. Tim Keller said that in committees representatives of the attorney general testified they didn't have the money to pursue such investigations.

More Fun With The State Investment Council

Last week the Senate Judiciary heard testimony from Frank Foy, who has filed a whistleblower suit claiming the Education Retirement Board -- for whom he worked as investment officer -- and the State Investment Council were pressured into investments for political purposes. Foy and his lawyer Victor Marshall complained that the SIC and other state agencies were "stonewalling" them by not providing requested documents.

See our story on that hearing HERE.

Today, the Judiciary Committee is scheduled to hear from SIC officials to explain their position.

That hearing is set for 3 pm in the Room 321.

(The meeting time has been revised on this post.)

A Little Drama on the Senate Floor

Senate Republican Leader Stuart Ingle introduced an amendment to the Feed Bill to appropriate $200,000 to the Attorney General's office to investigate allegations of wrongdoing in state investments.

Democratic Leader Michael Sanchez argued against the amendment, saying the Feed Bill, which funds the Legislature for the session, was not the appropriate place. Even so, most the Senate discussion seemed to be in favor of Ingle's move.

But right as Ingle was closing and the vote was about to be taken, Ingle paused. Then he announced that a message from the Fourth Floor had come down asking for a bill to reform the State Investment Council. (Some senators had complained about not receiving a message.)

Ingle withdrew the amendment.

But there will be more discussion about investments today. Frank Foy, former investment officer for the Educational Retirement Board is about to testify at the Senate Judiciary Committee. The New Mexico Independent plans to Webcast that meeting, which was scheduled to start 3 minutes ago.)

A New Investment Scandal Lawsuit

Some might call it Foy II.

Donna J. Hill, a records clerk at New Mexico State University is suing past and present state officials and a couple of controversial financial firms in a class action suit to recapture money lost in questionable investments by the state Education Retirement Board.

Hill's suit seeks to win back money for 95,000 beneficiaries of the state educators’ pension fund.

It's similar to the whistleblower suit filed last year by former ERB investment officer Frank Foy, who claimed the ERB lost millions in investments made because of political pressure from Gov. Bill Richardson’s administration. In fact a lawyer for one of the defendants referred to the new suit as a “ copycat lawsuit.”

Among those named in the suit are ERB chairman Bruce Malott, former state Investment Officer Gary Bland, state Education Secretary Veronica Garcia, and former acting state treasurer Doug Brown.

The companies named in the suit are Aldus Equity, a Dallas company which served as the investment adviser to the ERB and State Investment Council for several years until being implicated in a pay-to-play scheme in New York and Vanderbilt Capital Advisors, a Chicago firm that is the center of the Foy lawsuit.

Also listed as defendants are “John Doe #1,” who is described as a former chief of staff and campaign manager for Richardson‘s presidential run, and “John Doe #2,” who is described as “a Santa Fe broker,” the son of a Richardson friend and political contributor and the husband of Richardson’s former international protocol officer.

Sound familiar? These descriptions match former Richardson chief of staff Dave Contarino and broker Marc Correra respectively. Both have been named in the Foy lawsuit.

Like “John Doe #2,” Correra made millions in finders fees for ERB investments. Between his fees for the ERB transactions and those by the State Investment Council, Correra shared in some $22 million. Correra’s lawyer has denied wrongdoing.

Asked why the suit doesn’t come out and name either Contarino or Correra, Cuneo replied, “Without confirming or denying identities, we recognize these are sensitive allegations and involve allegations of political influence peddling linked to highest levels of the New Mexico government. We wanted to be responsible and diligent and obtain confirmatory discovery before revealing that part of our case.”

UPDATE: Here's my story in The New Mexican.

Meanwhile, here's the suit for yor reading pleasure.

2010 01 02 Hill v Vanderbilt Complaint

Reduce Gov's SIC Presence, Consultants Say

The State Investment Council needs to decrease the influence of the Governor's Office, train its members better, provide more documentation, tighten ethical standards and become more engaged in the investment process.

Those are among the recommendations of a Chicago-based consulting firm hired to review state investment practices and policies.

Representatives of Ennis, Krupp & Associates presented their recommendations to the SIC on Monday. My story on that is HERE

The Ennis Krupp consultants stressed that their report was not a forensic audit or an "investigation" of the SIC, which in the past year has been the subject of a federal investigation of its use of third-party placement agents. One consultant also said at the SIC meeting Monday that nobody found any "smoking gun" during the review.

So far the study isn't online. If and when it does, I'll post a link.

Little argument about the findings were expressed at the SIC meeting. But the question remains: Will these recommendations be implemented? Gov. Bill Richardson already vetoed (technically he "pocket vetoed") one bill that would have reduced the governor's influence on the SIC. Another such bill is in the works (CLICK HERE) but I wouldn't bet against it receiving the same fate.

Doug Brown to Head SIO Search

Gov. Bill Richardson just announced he's appointing Doug Brown to head the search for a new State Investment Officer to replace recently resigned Gary Bland. This is the same Doug Brown who in 2005 was appointed by Richardson in 2005 to be interim state treasurer when then-treasurer Robert Vigil, indicted (and later convicted) in a federal corruption investigation, had resigned under threat of impeachment.

Bland resigned in the face of a growing state investment investigation and a threatened vote of no confidence by the State Investment Council. Richardson's press release doesn't mention Bland's name.

Brown currently is dean of the University of New Mexico’s Anderson School of Management.

On the search committee are three SIC members Andrew Davis, Stephen Feinberg and Peter Frank -- all Richardson appointees -- who signed a resolution seeking a no-confidence vote for Bland.

“Doug Brown has a history of unselfish service to the state and I appreciate the fact that he is willing to head the search for one of the most important positions in state government,” said Gov. Richardson, who is the chairman of the State Investment Council.

Also on the search committee is Katherine Miller, secretary of the state Department of Finance.

Richardson also named Bob Jacksha, currently chief investment officer for the Education Retirement Board, to serve as interim SIO during the search. Jacksha has worked before as deputy SIO for the SIC.

Bland Resigns

The Associated Press is reporting the State Investment Officer Gary Bland has resigned.

According to the wire service, Bland, who Gov. Bill Richardson appointed in 2003, didn't say why he's quitiing. "However, he leaves amid a federal investigation of investments in New Mexico and fees paid to placement agents," the report notes.

This comes after Saul Meyer of Aldus Equity, who pled guilty in a New York investment fraud case, said that he'd recommended investments in this state that were "pushed on me by politically connected individuals in New Mexico."

More National Publicity for NM

This time in The Wall Street Journal. It's about the Saul Meyer revelations of course.

Not a whole lot new here. The concluding analysis is kind of interesting.

Political observers here said Mr. Richardson had appeared to regain a bounce to his step after being cleared in the federal bond-deal probe in late August. He hosted a delegation of North Korean officials, flew to Cuba on a trade mission and told reporters that he was running again at full steam. Political analysts began suggesting that Mr. Richardson might yet join the Obama administration, perhaps as an international envoy.

Now, even members of the governor's party say they sense a new swirl of scandal erupting from Mr. Meyer's admissions.

Political analysts said the potential for a new scandal in Sante Fe could boost Republican chances in the 2010 governor's race. Mr. Richardson is barred by term limits from seeking re-election.

Just When We Thought NM Scandal Season Was Fading ...

Saul Meyer pleaded guilty to corruption charges in New York today. And according to New York Attorney General Andrew Cuomo, his pleas also covers, "fraud in investment transactions relating to public pension funds in New Mexico."

Here's from an Associated Press account:

In a statement, the attorney general's office said Meyer had admitted that on "numerous occasions" while Aldus was acting as an adviser to the New Mexico State Investment Council and the New Mexico Educational Retirement Board, he had steered investment contracts to certain people.

"Aldus recommended proposed investments that were pushed on him by politically connected individuals in New Mexico, knowing that these politically connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico," the statement said.

Cuomo declined to say who those politically connected people are, so we can't say for sure that one was Marc Correra, who shared in millions of dollars in finders fees from New Mexico investments. Correra's father Anthony Correra is a longtime friends and fund-raiser for Gov. Bill Richardson. Correra's lawyer Sam Bregman has said his client worked hard for his millions and did nothing illegal.

The SIC and EIB fired Aldus after Meyer was indicted in New York state.

Update: Richardson spokesman Gilbert Gallegos released this statement:

“The Governor’s Office is not aware of any activity outlined by the Attorney General of New York. As we have previously explained, Governor Richardson never spoke with Marc Correra about any state investments, and the Governor never had any personal contact with Saul Meyer.”

SIC WIll Allow Exemptions to the No 3rd-Party Agent Rule

But only on a "super-majority" vote (seven of the nine State Investment Council members).

Check out my story about this and other modifications to the SIC's recently adopted transparency and disclosure policy in today's New Mexican. CLICK HERE

The ERB Subpoenas

As Kate Nash reported on her blog a couple of hours ago, the state Educational Retirement Board today released the subpoenas from the FBI regarding investments and third-party placement agents. The feds were particularly interested in dealings with Aldus Equity, a Dallas company at the center of the New York investment scandal.

Here's a copy of the main subpoena. The second simply asks for all e-mails, including attachments, to and from Bruce Malott, the executive director of the ERB.

FBI Subpoena #1

Foy Expands Whisteblower Suit

Former state Educational Retirement Board investment officer Frank Foy has expanded his "pay-to-play" lawsuit to include local investment broker Marc Correra, his father Anthony Correra, former Bill Richardson pal Guy Riordan and several of those involved in the New York investment scandal, including the indicted Hank Morris

Foy has in a lawsuit claimed that former Richardson chief of staff Dave Contarino, State Investment Officer Gary Bland and ERB director Bruce Malott pressured the ERB and SIC to make investments totalling $90 million with a Chicago company called Vanderbilt. The investments went bad -- though Marc Correra made a couple of million in finders fees on the deals.

This new turn of events should be interesting for Albuquerque lawyer Sam Bregman. He represents Malott's accounting firm, named as a defendant in this case, as well as Marc Correra in another matter.

Kate Nash is covering a press conference, which should be strarting about now. Meanwhile, below are the latest filings in the case. (I don't know why it shows an error sign. There should be no trouble downloading or reading the documents):

Corrected Austin Amended Complaint w Exhibits-Errata Corrections Made as FILED