Yes, it's the Sunday before the session starts, which means a good chunk of the New Mexican is devoted to previewing the Legislature.
My major contributions are a look at upcoming political drama and my annual "citizen's guide" to the Legislature, in which I talk about all the trouble regular people have trying to attend the session -- parking, weird schedules, tiny committee hearing rooms, etc. And did I mention parking?
You can find these stories and more on the session on The New Mexican's new 2009 Legislative Session page, which you should immediately bookmark. You'll find stories from our staff and the Associated Press on the session and New Mexico politics, videos from KOB TV, feeds from this blog, Kate Nash's Green Chile Chatter and our dynamic Twitter thing.
Plus, there's a video Kate put together, using me as "talent" (hey, quiet there in the Peanut Gallery!) doing a tour of the Roundhouse. We shot nearly all of it on the day after Thanksgiving and you'll notice that I point out the video cameras in the Senate gallery that were intended for Webcasting floor sessions. Those cameras, as loyal readers know, have since been taken down. Perhaps the Senate leaders who decided not to fund the Webcasting weren't as agreeable to appearing on camera as I was.
By the way, the music for our tour video was from a song written by myself and my brother Jack Clift called "God's Gold Ring." It was recorded about 10 years ago by a group we called The Grizzley Souvenirs, which included Jack and me plus Tom Adler on banjo and Al Faaet on percussion.
Sunday, January 18, 2009
Saturday, January 17, 2009
BLOG RIOT!
A reader -- and fellow blogger -- who is upset with the state Senate leadership's decision not to Webcast floor sessions (despite an overwhelming vote by the full Senate to do just that) wants me and some of my fellow bloggers to lead an effort to "storm the castle."
Ched MacQuigg writes:
I emailed MacQuigg and quipped, "You start the riot and I'll cover it." Let me say here for the record that I am not advocating or trying to incite a riot. That would be wrong, as President Nixon used to say. There are so many federal agents sniffing around New Mexico right now thanks to all these scandals, I don't want there to be any misunderstanding ...
But, in all seriousness, that indeed is my role as a journalist. MacQuigg's friend had it right. If someone wants to organize a protest on the Webcasts or anything else, I'll be the one with the notebook, not the one with the bullhorn. True there are advocate/journalists, but that's not what I do. It's certainly not what the people who sign my paycheck pay me to do.
Besides, like many reporters, I barely can organize my desk, much less a riot. Heath would have to drive up all the way from Las Cruces and Monahan only goes to riots where there's free food.
Ched MacQuigg writes:
I believe that the blogosphere could lead in that encouragement.
A friend offered that, Terrell can't incite to riot, because he is a Journalist, and his credibility as a Journalist would be compromised by taking a side in the fight.
Why not let his readers be the judge?
Is it impossible to report the news candidly, forthrightly and
honestly, while at the same time standing up for what you believe in?
We have the appearance of a conflict of interest. The problem is addressed by full disclosure; it is no longer a problem.
Terrell could ask his readers to join him on the capital steps, and then report upon how many people showed up, and upon their effect.
So could Monahan.
So could Haussamen.
So could the Duke City Fix.
What if every blogger in New Mexico, offered their readers
an opportunity to gather together , and storm the castle?
What if every blogger offered their readers an opportunity to gather together, all together, to take back control over power and resources that are fundamentally their own?
I emailed MacQuigg and quipped, "You start the riot and I'll cover it." Let me say here for the record that I am not advocating or trying to incite a riot. That would be wrong, as President Nixon used to say. There are so many federal agents sniffing around New Mexico right now thanks to all these scandals, I don't want there to be any misunderstanding ...
But, in all seriousness, that indeed is my role as a journalist. MacQuigg's friend had it right. If someone wants to organize a protest on the Webcasts or anything else, I'll be the one with the notebook, not the one with the bullhorn. True there are advocate/journalists, but that's not what I do. It's certainly not what the people who sign my paycheck pay me to do.
Besides, like many reporters, I barely can organize my desk, much less a riot. Heath would have to drive up all the way from Las Cruces and Monahan only goes to riots where there's free food.
Friday, January 16, 2009
TO WARM UP FOR THE SESSION
Lorene Mills' Report from Santa Fe television this weeks features an in-depth interview with Senate President pro-tem Tim Jennings, D-Roswell, who is fighting to hold on to his leadership position.
Senate Democrats -- angry with him for helping Republican Sen. Leonard Lee Rawson in the general election -- nominated Sen. Carlos Cisneros, D-Taos for the pro-tem job.
From the transcript of the show, here's what Jennings said about the incident. You'll notice he also touches on his past clashes with Gov. Bill Richardson:
You know the Senate has been through a lot lately and I with
Sen. Aragon’s conviction or plea agreement you know there are some things out there that I think cast a shadow on the Senate and about its actions and the people in it. ... Sen. Rawson was accused and some of the things were out there said implicated that he was dishonest.
Well, anybody who has been here knows Sen. Rawson worked very hard for his constituency; he worked very hard for the people of the state. He was one of the people that is here early in the morning and he was here and he read the bills, he was probably knitpicky, when he was on Finance he was a very astute individual and he was really in tune with little details. He had a good memory and so you might call him a knit picker or a jerk or something like that I might agree with you. But to say that he was dishonest was very, very far from the truth in my opinion.
... I thought was something I needed to stand up as a leader of the Senate to say no, this member is honest. I consider him to be honest and I do and I still to this day would maintain I believe he is an honest individual. And if I see something that is wrong, you know you try to correct it and the truth is something to me that in politics is something that every political official must have and must have the ability to always speak the truth. And if you see something that is wrong, you should right it.
You should say something about it and then you shouldn’t be punished for speaking the truth and that’s probably where I would probably come into a great deal of conflict with this governor because if you dare to disagree or have an opinion different than his, he tends to keep track and get even, as he has with the Senate. And I don’t support that. I don’t think it’s wrong in this body to have different ideas. I think this is the place that should celebrate different ideas.
Here's a schedule for the show
* Sunday January 18, 6:00 a.m. for Albuquerque and Santa Fe and all of Northern New Mexico, on Channel 5, KNME-TV, the PBS station in Albuquerque.
* Sunday January 18, 11:00 a.m. for Las Cruces and the Southern part of the State, on KRWG-TV, the PBS station in Las Cruces.
*Saturday January 17, 6:00 p.m. for the entire East side of the state, on Channel 3, KENW-TV, the PBS station in Portales.
* Listeners in Santa Fe, Albuquerque and other locales can hear the Jennings interview on the radio 9:30 a.m. on Monday, January 19 on KANW-FM, 89.1 FM.
Senate Democrats -- angry with him for helping Republican Sen. Leonard Lee Rawson in the general election -- nominated Sen. Carlos Cisneros, D-Taos for the pro-tem job.
From the transcript of the show, here's what Jennings said about the incident. You'll notice he also touches on his past clashes with Gov. Bill Richardson:
You know the Senate has been through a lot lately and I with
Sen. Aragon’s conviction or plea agreement you know there are some things out there that I think cast a shadow on the Senate and about its actions and the people in it. ... Sen. Rawson was accused and some of the things were out there said implicated that he was dishonest.
Well, anybody who has been here knows Sen. Rawson worked very hard for his constituency; he worked very hard for the people of the state. He was one of the people that is here early in the morning and he was here and he read the bills, he was probably knitpicky, when he was on Finance he was a very astute individual and he was really in tune with little details. He had a good memory and so you might call him a knit picker or a jerk or something like that I might agree with you. But to say that he was dishonest was very, very far from the truth in my opinion.
... I thought was something I needed to stand up as a leader of the Senate to say no, this member is honest. I consider him to be honest and I do and I still to this day would maintain I believe he is an honest individual. And if I see something that is wrong, you know you try to correct it and the truth is something to me that in politics is something that every political official must have and must have the ability to always speak the truth. And if you see something that is wrong, you should right it.
You should say something about it and then you shouldn’t be punished for speaking the truth and that’s probably where I would probably come into a great deal of conflict with this governor because if you dare to disagree or have an opinion different than his, he tends to keep track and get even, as he has with the Senate. And I don’t support that. I don’t think it’s wrong in this body to have different ideas. I think this is the place that should celebrate different ideas.
Here's a schedule for the show
* Sunday January 18, 6:00 a.m. for Albuquerque and Santa Fe and all of Northern New Mexico, on Channel 5, KNME-TV, the PBS station in Albuquerque.
* Sunday January 18, 11:00 a.m. for Las Cruces and the Southern part of the State, on KRWG-TV, the PBS station in Las Cruces.
*Saturday January 17, 6:00 p.m. for the entire East side of the state, on Channel 3, KENW-TV, the PBS station in Portales.
* Listeners in Santa Fe, Albuquerque and other locales can hear the Jennings interview on the radio 9:30 a.m. on Monday, January 19 on KANW-FM, 89.1 FM.
MORE ON THE VANDERBILT SCANDAL
I have a story in today's New Mexican about Vanderbilt Capital Advisors -- the company at the center of the latest pay-to-play scandal. According to Santa Fe court documents the federal Securities & Exchange Commission is investigating the company's dealing in New Mexico.
Not only that, a few years before the state Educational Retirement Board and the State Investment Council lost nearly $90 million with Vanderbilt, the SEC found the Chicago-based firm had engaging in "a fraudulent trading practice." You can read what the SEC had to say about that previous case HERE.
Kate Nash has a story about legislator's reactions to the new scandal. You can find that HERE.
It's easy to get wound up in the minutiae of the case -- the details of the high-finance shenanigans, whether or not the state's deals with Vanderbilt are related to the campaign contributions to Bill Richardson's presidential campaign, whether former ERB investment officer Frank Foy, who brought the matter to light in his civil lawsuit, has an ax to grind, etc.
The important thing to remember is that 90 million bucks -- $40 million of which was money that was was supposed to be invested for teachers' pensions -- was flushed down the toilet.
Not only that, a few years before the state Educational Retirement Board and the State Investment Council lost nearly $90 million with Vanderbilt, the SEC found the Chicago-based firm had engaging in "a fraudulent trading practice." You can read what the SEC had to say about that previous case HERE.
Kate Nash has a story about legislator's reactions to the new scandal. You can find that HERE.
It's easy to get wound up in the minutiae of the case -- the details of the high-finance shenanigans, whether or not the state's deals with Vanderbilt are related to the campaign contributions to Bill Richardson's presidential campaign, whether former ERB investment officer Frank Foy, who brought the matter to light in his civil lawsuit, has an ax to grind, etc.
The important thing to remember is that 90 million bucks -- $40 million of which was money that was was supposed to be invested for teachers' pensions -- was flushed down the toilet.
Thursday, January 15, 2009
THE BEARD ALERT
A Washington, D.C. blog called "Princess Sparkle Pony's Photo Blog," which normally concerns itself with Condoleezza Rice's hairdos, is branching out. They've now got a "Bill Richardson Facial Hair Alert System."
And you can even buy Richardson Facial Hair Alert System T-shirts, coffee mugs and other stuff.
Not only that, but they call Richardson "Papa Bear."
(Thanks to Matthew Reichbach for spotting this.)
And you can even buy Richardson Facial Hair Alert System T-shirts, coffee mugs and other stuff.
Not only that, but they call Richardson "Papa Bear."
(Thanks to Matthew Reichbach for spotting this.)
Wednesday, January 14, 2009
ROUNDHOUSE ROUNDUP: WHEN THE GOING GETS TOUGH, THE TOUGH GO CAMPAIGNING
A version of this was published in The Santa Fe New Mexican
January 15, 2009
When in doubt, hit the campaign trail.
That seems to be the reflex of Gov. Bill Richardson this week as scandals mount, the state’s economic picture grows more grim, and tensions with the state Legislature — at least the chairwoman of the Senate Rules Committee — grow.
A news release from Richardson’s office earlier this week reminded me of e-mails from his presidential campaign. But instead of naming stops in towns like Cedar Rapids, Iowa City and Des Moines, the new one listed New Mexico towns and cities — and instead of selling himself as the best possible commander-in-chief, Richardson is talking about his legislative priorities and budget plan.
On Wednesday, he went to Farmington, Las Cruces and Roswell to talk about public-safety initiatives. Today, he’s scheduled for a breakfast with “local leaders” in Hobbs; a speech about education initiatives at the Lincoln Jackson Family Center Cafeteria in Clovis; and another speech and “Pre-Groundbreaking Rally” at the Tucumcari High School Auditorium.
Maybe that’s not as romantic as running for president. But the events aren’t that different from speaking to a couple of dozen people in a freezing airplane hangar in Dubuque, Iowa, or strolling bookstores and coffee shops in Portsmouth, N.H.
The audiences are bound to be friendly, and you don’t have to deal with a bunch of grumpy senators or jaded statehouse reporters asking questions about grand juries and lawyers.
Speaking of such unpleasantness: It seems that ever since Richardson announced he was withdrawing as President-elect Barack Obama’s commerce secretary nominee, there’s been a steady stream of news about state scandals popping up.
On Wednesday, two scandals duked it out for column inches and TV news airtime — allegations of pay-to-play at the Education Retirement Board and new revelations about funny expenditures by the state’s regional housing authorities.
For the benefit of those who don’t know the difference between CDR Financial Products and A. Gutierrez & Associates, here’s a pocket primer to recent New Mexico political scandals:
* Region III Housing Authority: Last week, The Associated Press reported a state grand jury is investigating the operations of an Albuquerque-based regional housing authority that defaulted on payments for $5 million in bonds it sold to New Mexico. State Attorney General Gary King has been investigating the housing agency, which the State Investment Council in 2006 concluded had misused bond proceeds to pay salaries and benefits, make loans and buy vehicles. The SIC in May 2008 filed a separate civil action against the agency’s former executive director, Vincent “Smiley” Gallegos, and an Albuquerque bond attorney, Robert Strumor, in an effort to recover the $5 million in taxpayer money. That suit is pending.
On Wednesday, State Auditor Hector Balderas released a report saying all five regional housing authorities he audited “were plagued by weak internal controls and a lack of adequate oversight,” and “the blatant disregard for proper policies and procedures created an environment ripe for waste, fraud, and abuse.” Gallegos has denied wrongdoing.
* Vanderbilt Capital Advisors: Another allegation of pay-to-play. Frank Foy, a former chief investment officer of the state Educational Retirement Board, charged in a civil lawsuit unsealed Friday that state officials pressured ERB and the State Investment Council to hire a Chicago company, Vanderbilt Capital Advisors, which had contributed more than $15,000 to Richardson’s presidential campaign. Vanderbilt lost a total of $90 million in state money.
Richardson’s office and other state officials named in the suit denied wrongdoing.
* Secretary of State expenditures: Last week, the Attorney General’s Office confirmed it’s investigating how federal election money was spent under former Secretary of State Rebecca Vigil-Giron. Actually, the investigation was confirmed earlier by a strange news release Friday from the Department of Workforce Solutions, where Vigil-Giron now works. That statement was to deny a rumor that Vigil-Giron had been fired. “Ms. Vigil-Giron informed Secretary Betty Sparrow Doris of a pending Attorney General investigation involving matters not related to her work at the NM Department of Workforce Solutions,” that statement said.
A 2008 federal audit questioned whether Vigil-Giron had properly spent millions of dollars on a voter-education project that included television ads. An Albuquerque advertising company, A. Gutierrez & Associates, received more than $6 million to produce ads, many of them prominently featuring Vigil-Giron, who unsuccessfully ran for Congress last year. State records could substantiate only about $2.6 million of Gutierrez’s costs, the audit determined. Payments by the state to the company exceeded a contracted ceiling by more than $300,000. Vigil-Giron has denied wrongdoing.
* CDR: This is the grand jury investigation that cost Richardson a cabinet position. The federal grand jury in Albuquerque is looking at whether CDR Financial Products was awarded bond work for the state transportation construction projects because of campaign contributions totaling more than $100,000 from CDR and its chief executive officer.
Richardson has denied wrongdoing, and some of his supporters privately say the whole case is a political witch hunt by Republican prosecutors — remember the Justice Department scandals of 2007, some Richardson supporters say — who are out to make the governor look bad.
January 15, 2009
When in doubt, hit the campaign trail.
That seems to be the reflex of Gov. Bill Richardson this week as scandals mount, the state’s economic picture grows more grim, and tensions with the state Legislature — at least the chairwoman of the Senate Rules Committee — grow.
A news release from Richardson’s office earlier this week reminded me of e-mails from his presidential campaign. But instead of naming stops in towns like Cedar Rapids, Iowa City and Des Moines, the new one listed New Mexico towns and cities — and instead of selling himself as the best possible commander-in-chief, Richardson is talking about his legislative priorities and budget plan.
On Wednesday, he went to Farmington, Las Cruces and Roswell to talk about public-safety initiatives. Today, he’s scheduled for a breakfast with “local leaders” in Hobbs; a speech about education initiatives at the Lincoln Jackson Family Center Cafeteria in Clovis; and another speech and “Pre-Groundbreaking Rally” at the Tucumcari High School Auditorium.
Maybe that’s not as romantic as running for president. But the events aren’t that different from speaking to a couple of dozen people in a freezing airplane hangar in Dubuque, Iowa, or strolling bookstores and coffee shops in Portsmouth, N.H.
The audiences are bound to be friendly, and you don’t have to deal with a bunch of grumpy senators or jaded statehouse reporters asking questions about grand juries and lawyers.
Speaking of such unpleasantness: It seems that ever since Richardson announced he was withdrawing as President-elect Barack Obama’s commerce secretary nominee, there’s been a steady stream of news about state scandals popping up.
On Wednesday, two scandals duked it out for column inches and TV news airtime — allegations of pay-to-play at the Education Retirement Board and new revelations about funny expenditures by the state’s regional housing authorities.
For the benefit of those who don’t know the difference between CDR Financial Products and A. Gutierrez & Associates, here’s a pocket primer to recent New Mexico political scandals:
* Region III Housing Authority: Last week, The Associated Press reported a state grand jury is investigating the operations of an Albuquerque-based regional housing authority that defaulted on payments for $5 million in bonds it sold to New Mexico. State Attorney General Gary King has been investigating the housing agency, which the State Investment Council in 2006 concluded had misused bond proceeds to pay salaries and benefits, make loans and buy vehicles. The SIC in May 2008 filed a separate civil action against the agency’s former executive director, Vincent “Smiley” Gallegos, and an Albuquerque bond attorney, Robert Strumor, in an effort to recover the $5 million in taxpayer money. That suit is pending.
On Wednesday, State Auditor Hector Balderas released a report saying all five regional housing authorities he audited “were plagued by weak internal controls and a lack of adequate oversight,” and “the blatant disregard for proper policies and procedures created an environment ripe for waste, fraud, and abuse.” Gallegos has denied wrongdoing.
* Vanderbilt Capital Advisors: Another allegation of pay-to-play. Frank Foy, a former chief investment officer of the state Educational Retirement Board, charged in a civil lawsuit unsealed Friday that state officials pressured ERB and the State Investment Council to hire a Chicago company, Vanderbilt Capital Advisors, which had contributed more than $15,000 to Richardson’s presidential campaign. Vanderbilt lost a total of $90 million in state money.
Richardson’s office and other state officials named in the suit denied wrongdoing.
* Secretary of State expenditures: Last week, the Attorney General’s Office confirmed it’s investigating how federal election money was spent under former Secretary of State Rebecca Vigil-Giron. Actually, the investigation was confirmed earlier by a strange news release Friday from the Department of Workforce Solutions, where Vigil-Giron now works. That statement was to deny a rumor that Vigil-Giron had been fired. “Ms. Vigil-Giron informed Secretary Betty Sparrow Doris of a pending Attorney General investigation involving matters not related to her work at the NM Department of Workforce Solutions,” that statement said.
A 2008 federal audit questioned whether Vigil-Giron had properly spent millions of dollars on a voter-education project that included television ads. An Albuquerque advertising company, A. Gutierrez & Associates, received more than $6 million to produce ads, many of them prominently featuring Vigil-Giron, who unsuccessfully ran for Congress last year. State records could substantiate only about $2.6 million of Gutierrez’s costs, the audit determined. Payments by the state to the company exceeded a contracted ceiling by more than $300,000. Vigil-Giron has denied wrongdoing.
* CDR: This is the grand jury investigation that cost Richardson a cabinet position. The federal grand jury in Albuquerque is looking at whether CDR Financial Products was awarded bond work for the state transportation construction projects because of campaign contributions totaling more than $100,000 from CDR and its chief executive officer.
Richardson has denied wrongdoing, and some of his supporters privately say the whole case is a political witch hunt by Republican prosecutors — remember the Justice Department scandals of 2007, some Richardson supporters say — who are out to make the governor look bad.
NEW PAY-TO-PLAY?
There's a breaking new scandal involving Gov. Bill Richardson’s administration and another allegation of pay to play.
A lawsuit unsealed in State District Court this morning alleges that state taxpayers were defrauded of $90 million by a host of financial companies and two state officials. Among the defendants are State Investment Office and Educational Retirement Board officials, including Gary Bland, who is appointed by Richardson and Bruce Malott, chairman of the ERB board.
The lawsuit, filed by Frank Foy, the former chief investment officer at the ERB, alleges that Bland and Malott were instructed by an unnamed “John Doe # 2” to invest statement in exchange for political contributions from employees of Vanderbilt Financial and associated companies. According to federal campaign finance records, Vanderbilt and its employees and their families contributed more than $15,000 to Richardson’s presidential campaign.
“John Doe # 2”’s identity has not been released. It isn’t clear why his name is being kept secret. The lawsuit was filed in July of last year.
At the heart of the suit is an allegation that the state invested in $90 million with Vanderbilt companies. The state received dividends from the investment totaling about $3.7 million. But sometime since May 2007, “Vanderbilt has informed the ERB and the SIC not to expect any more from its investment.” The ERB invested $40 million and the SIC invested $50 million.
“The defendants sold the state of New Mexico a worthless combination of liar’s loans, lethal leverage and toxic waste,” according to the complaint, referring to industry terms for types of bad investments.
Foy, who eventually was demoted and, he says, was forced to retire, was the subject of a sexual harassment suit in 2007. His suit claims, “These accusations ... clearly contrived to force Mr. Foy to retire.”
“It was my job at the Educational Retirement Board to act as a prudent fiduciary to protect schoolteachers’ retirement money,” Foy said in a statement Wednesday. “But teachers and taxpayers have lost millions due to pay-to-play practices that benefited Governor Richardson and his campaigns. Our primary goal is to restore the lost funds to their respective owners: taxpayers, teachers, and retired educators here in New Mexico.”
According to the lawsuit, “Beginning in 2003, the ERB was pressured to award contracts and make investments with persons or entities based upon political considerations. These pressures were exerted by Bruce Malott on instructions from John Doe #2 (and perhaps others). This was a plain violation of the fiduciary duties owed by the ERB to its members.” Richardson became governor in 2003.
According to the suit, in early 2006 Patrick Livney of Vanderbilt began to call Foy and Malott, pressuring Foy and his staff to invest with Vanderbilt. Foy said the type of investments offered by Vanderbilt “was not a good investment, and it did not fit in ERB’s portfolio.” Foy “vigorously resisted,” as did other staffers, the suit says, but Malott insisted.
In May 2006 the ERB board voted 4-2 to invest in Vanderbilt. “The directors selected by public school teachers voted against the investment. The directors who voted for the investment were swayed by improper considerations,” According to the suit, those members “voted for the Vanderbilt investment on instructions from Malott and/or John Doe #2 (and perhaps others).”
The lawsuit says there were other instances in which Malott “pressured the ERB to hire investment managers who were not the best qualified candidates, or to make investments.” The suit doesn’t specify these cases.
“Malott’s actions were intended to gain business and political favor for himself and Meyners, as part of Meyners’ efforts to develop its accounting business,” the lawsuit says, referring to Malott’s Albuquerque accounting firm. “Malott’s actions were a deliberate breach of the strict fiduciary duties which he owed to the ERB and ERB retirees. Malott’s actions were not within the scope of his duties as an ERB board member; those duties do not include raising political contributions and developing business for his CPA firm.”
The suit says that on several occasions after the State invested in Vanderbilt, “the defendants knowingly made false statements about the investment and the underlying assets and liabilities. These false statements were designed to conceal and misrepresent the fact that the State’s investment was virtually worthless ...”
Foy started at the ERB in 1996 and retired in 2007.
Bland was appointed to the SIC by Richardson at the outset of his first administration. He makes more the $300,000 a year.
Malott, a CPA, served as chairman of a Richardson task force to look at shortfalls in the state’s education retirement fund and was named by Richardson to the task force to find an interim state treasurer in 2005 when Treasurer Robert Vigil resigned over a kickback scandal.
Vanderbilt is a subsidiary of Pioneer Investments of Boston, which in turn is owned by Unicredito Italiana, a large European Bank.
Watch this blog and The New Mexican for more details to come.
UPDATE 4:05 p.m.: Richardson spokesman Gilbert Gallegos just commented on the lawsuit:
Earlier , State Investment Council spokesman Charles Wollmann said Bland has done nothing wrong: “The state investment officer has not participated in any wrong doing and will vigorously fight the reckless allegations made today."
UPDATE: You can see the complaint itself HERE
A lawsuit unsealed in State District Court this morning alleges that state taxpayers were defrauded of $90 million by a host of financial companies and two state officials. Among the defendants are State Investment Office and Educational Retirement Board officials, including Gary Bland, who is appointed by Richardson and Bruce Malott, chairman of the ERB board.
The lawsuit, filed by Frank Foy, the former chief investment officer at the ERB, alleges that Bland and Malott were instructed by an unnamed “John Doe # 2” to invest statement in exchange for political contributions from employees of Vanderbilt Financial and associated companies. According to federal campaign finance records, Vanderbilt and its employees and their families contributed more than $15,000 to Richardson’s presidential campaign.
“John Doe # 2”’s identity has not been released. It isn’t clear why his name is being kept secret. The lawsuit was filed in July of last year.
At the heart of the suit is an allegation that the state invested in $90 million with Vanderbilt companies. The state received dividends from the investment totaling about $3.7 million. But sometime since May 2007, “Vanderbilt has informed the ERB and the SIC not to expect any more from its investment.” The ERB invested $40 million and the SIC invested $50 million.
“The defendants sold the state of New Mexico a worthless combination of liar’s loans, lethal leverage and toxic waste,” according to the complaint, referring to industry terms for types of bad investments.
Foy, who eventually was demoted and, he says, was forced to retire, was the subject of a sexual harassment suit in 2007. His suit claims, “These accusations ... clearly contrived to force Mr. Foy to retire.”
“It was my job at the Educational Retirement Board to act as a prudent fiduciary to protect schoolteachers’ retirement money,” Foy said in a statement Wednesday. “But teachers and taxpayers have lost millions due to pay-to-play practices that benefited Governor Richardson and his campaigns. Our primary goal is to restore the lost funds to their respective owners: taxpayers, teachers, and retired educators here in New Mexico.”
According to the lawsuit, “Beginning in 2003, the ERB was pressured to award contracts and make investments with persons or entities based upon political considerations. These pressures were exerted by Bruce Malott on instructions from John Doe #2 (and perhaps others). This was a plain violation of the fiduciary duties owed by the ERB to its members.” Richardson became governor in 2003.
According to the suit, in early 2006 Patrick Livney of Vanderbilt began to call Foy and Malott, pressuring Foy and his staff to invest with Vanderbilt. Foy said the type of investments offered by Vanderbilt “was not a good investment, and it did not fit in ERB’s portfolio.” Foy “vigorously resisted,” as did other staffers, the suit says, but Malott insisted.
In May 2006 the ERB board voted 4-2 to invest in Vanderbilt. “The directors selected by public school teachers voted against the investment. The directors who voted for the investment were swayed by improper considerations,” According to the suit, those members “voted for the Vanderbilt investment on instructions from Malott and/or John Doe #2 (and perhaps others).”
The lawsuit says there were other instances in which Malott “pressured the ERB to hire investment managers who were not the best qualified candidates, or to make investments.” The suit doesn’t specify these cases.
“Malott’s actions were intended to gain business and political favor for himself and Meyners, as part of Meyners’ efforts to develop its accounting business,” the lawsuit says, referring to Malott’s Albuquerque accounting firm. “Malott’s actions were a deliberate breach of the strict fiduciary duties which he owed to the ERB and ERB retirees. Malott’s actions were not within the scope of his duties as an ERB board member; those duties do not include raising political contributions and developing business for his CPA firm.”
The suit says that on several occasions after the State invested in Vanderbilt, “the defendants knowingly made false statements about the investment and the underlying assets and liabilities. These false statements were designed to conceal and misrepresent the fact that the State’s investment was virtually worthless ...”
Foy started at the ERB in 1996 and retired in 2007.
Bland was appointed to the SIC by Richardson at the outset of his first administration. He makes more the $300,000 a year.
Malott, a CPA, served as chairman of a Richardson task force to look at shortfalls in the state’s education retirement fund and was named by Richardson to the task force to find an interim state treasurer in 2005 when Treasurer Robert Vigil resigned over a kickback scandal.
Vanderbilt is a subsidiary of Pioneer Investments of Boston, which in turn is owned by Unicredito Italiana, a large European Bank.
Watch this blog and The New Mexican for more details to come.
UPDATE 4:05 p.m.: Richardson spokesman Gilbert Gallegos just commented on the lawsuit:
The Governor is confident that the state agencies named in this
lawsuitacted properly and in the best interest of New Mexicans. This lawsuit,filed by a disgruntled former employee who was accused of serious misconduct during his time as a state employee, makes absurd claims against state agencies. The state will vigorously defend those agencies."
Earlier , State Investment Council spokesman Charles Wollmann said Bland has done nothing wrong: “The state investment officer has not participated in any wrong doing and will vigorously fight the reckless allegations made today."
UPDATE: You can see the complaint itself HERE
Tuesday, January 13, 2009
DUB DEPARTS THE HOUSE
State Rep. Dub Williams, who won re-election to his state House seat in November, apparently has decided to retire.
The governor's office just sent this news release:
Gov. Bill Richardson released the following statement today, following the retirement of Rep. W.C. “Dub” Williams. Representative Williams has served the people of Lincoln and Otero Counties as State Representative for District 56 since 1995.
“While I understand his decision I am saddened at the news of Dub Williams’ retirement from the state legislature. Dub is the walking definition of the term “gentleman.” The legislature will sorely miss his considered engagement and even hand. I would request that the Lincoln and Otero county commissions seriously consider Dub’s wishes in sending the nominations to name his replacement.” - Gov. Bill Richardson
Most recently Williams served on a number of legislative committees including the Legislative Education Study Committee, Legislative Committee on Compacts, Indian Affairs Committee, Education Committee, Consumer and Public Affairs Committee and the Public School Capital Outlay Oversight Task Force.
ANOTHER GRIP FINANCE FIRM INVOLVED WITH GUV PAC
Kudos to Bloomberg -- again. They've uncovered another lobbyist for a firm that was part of the GRIP finance team who played a role in Gov. Bill Richardson's political efforts.
Read the complete Bloomberg story HERE
Fred Duval of Phoenix was a lobbyist for the Swiss USB, one of four banks that split more than $5.1 million of fees for lining up buyers for the New Mexico Finance Authority’s GRIP project bonds sold in 2004. Duval also was listed as a director for Si Se Puede!, the political action committee that paid for the expenses of Richardson and his entourage in Boston at the 2004 DNC.
In the Bloomberg story, Duval denies he had a role in landing the NMFA bond deals for USB. He also said he didn't do anything but lend his name to Richardson's PAC.
Mike Stratton of Denver lobbied for JPMorgan Chase & Co as well as CDR Financial Products in 2004. He became one of Richardson's main political strategists in his presidential bid. I first met Mike in 2005 during a Richardson trip to New Hampshire -- though that was a year and half before he formally launched his campaign.
Read the complete Bloomberg story HERE
Fred Duval of Phoenix was a lobbyist for the Swiss USB, one of four banks that split more than $5.1 million of fees for lining up buyers for the New Mexico Finance Authority’s GRIP project bonds sold in 2004. Duval also was listed as a director for Si Se Puede!, the political action committee that paid for the expenses of Richardson and his entourage in Boston at the 2004 DNC.
In the Bloomberg story, Duval denies he had a role in landing the NMFA bond deals for USB. He also said he didn't do anything but lend his name to Richardson's PAC.
Mike Stratton of Denver lobbied for JPMorgan Chase & Co as well as CDR Financial Products in 2004. He became one of Richardson's main political strategists in his presidential bid. I first met Mike in 2005 during a Richardson trip to New Hampshire -- though that was a year and half before he formally launched his campaign.
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