On Demons Down That Field

Here's a correction to a Monday press release that I know my former colleague Andy Lenderman (Now with the state Department of Education) didn't want to write.

Yesterday we were informed that Santa Fe High was on one of three New Mexico high schools named by Newsweek as one of "America's Top Public High Schools."

But just a few minutes ago we get a little update:

Newsweek inadvertently included a Santa Fe High School in Florida on the New Mexico listing highlighted in a Monday news release. Santa Fe High’s name on the New Mexico listing will be removed from Newsweek’s online list this week. Newsweek apologizes for the error.

Apparently Moreno Valley High School and Hobbs High School are still on the list.

Gary vs. The Godfather

Look out Don Corleone! Beware Tony Soprano! Gary King is ready for you.

Or at least he will after he gets back from Italy from a special Mafia fighter workshop.

Here's the press release from the Attorney General's Office:

Attorney General Gary King is joining AGs from Mexico and Italy next week to discuss how Italy battles Mafia-related organized crime; the government's collaboration with the civilian sector; and how those efforts can be applied locally.

"The current violence in Mexico is linked to organized crime drug traffickers and it is clearly in New Mexico's best interests to study what Italy has done to address similar crimes," says AG King. "My office has been working closely with our Mexican counterparts to deal with organized crime activities along our border so we all hope to bring back strategies and practices we can employ here."

Attorney General King and the AG's from Idaho and North Dakota are attending the Rome meeting at the invitation of the Conference of Western Attorneys General (CWAG). AGs, other law enforcement and community leaders from five states in Mexico are scheduled to meet with Italian prosecutors, academics, community leaders and others during the week-long summit that gets underway Monday, June 22. AG King will attend the first three days only.

Roundhouse Roundup: Yellin' and Screamin'

A version of this was published in The Santa Fe New Mexican
June 11, 2009

Last week, reporters and others were barred from a court deposition of a witness in the Vanderbilt whistle-blower/alleged pay-to-play case.

According to court papers filed this week, the press missed out on some excitement, or at least something you don’t normally encounter at court proceedings involving complex financial matters: “Yelling and screaming” by lawyers.

But while that might sound like fun for a jaded reporter, the 71-year-old woman with serious health problems who was the subject of the deposition surely made an understatement when she described the situation as “stressful.”

A little background: The lawsuit in question was filed by Frank Foy, former investment officer for the state Educational Retirement Board. Foy claims the ERB was pressured by Dave Contarino, former chief of staff and campaign manager for Gov. Bill Richardson, into making a $40 million investment with Vanderbilt Capital Advisors, a Chicago firm. The ERB lost all the money in the Vanderbilt investment. At the same time, the State Investment Council lost $50 million with the company.

Vanderbilt and its employees contributed $15,000 to Richardson’s presidential campaign. And it was revealed after the suit was filed that the politically connected Marc Correra, son of a Richardson adviser and contributor, made $2 million in finder’s fees for the Vanderbilt deals.

Defendants in the case include Vanderbilt, Contarino, ERB Chairman Bruce Malott (whose accounting firm did the books for the Richardson campaign and now is doing the same for Lt. Gov. Diane Denish’s gubernatorial campaign) and SIC director Gary Bland.

All have vehemently denied wrongdoing.

Pauline “Polly” Turner, a former University of New Mexico professor, was one of two ERB members to vote against the Vanderbilt deal. In January, she told The Associated Press that she did not think the board had been properly educated on the investment instrument known as “collateralized debt obligations,” which was being used by Vanderbilt. She also said the board moved too quickly to approve the deal.

Reasonable limits: Turner, who resigned from the ERB last year because of health reasons, was subjected to what she said was a 10-hour deposition last week.

In her letter to state District Judge Stephen Pfeffer, Turner described her health condition.

“I am 71 years old. I had lung cancer in 2002, which resulted in the removal of 2/5 of my right lung,” she wrote. “I am now in the ‘end stage’ of chronic obstructive pulmonary disease (COPD), which manifests itself in emphysema and chronic bronchitis. I require oxygen 24/7, and am not able to talk continuously for much more than 3 hours. I use a bi-pap machine at night and for a minimum of one hour in the day in order to pump air into my lungs. In addition, I have been treated for high blood pressure for about 20 years. Finally my husband is in his 90s and is legally blind due to macular degeneration.”

Turner wrote, “My purpose in writing to you is to respectfully request that you impose reasonable limits on the remainder of this deposition in order to protect my health. …”

Then she went on describe why unlimited depositions could be bad for her health.

“As I am sure you can imagine, this experience has been very stressful for me with 15 attorneys in the room and others connected remotely. It is especially stressful when these attorneys are yelling and screaming at each other. …”

She asked that the depositions be limited to one more session — of only three hours. Turner requested that to take place Wednesday or today, but that didn’t happen.

Those familiar with the case won’t have a hard time imagining the yelling and screaming by the lawyers involved.

A February news conference called by Foy’s lawyer, Victor Marshall, at an Albuquerque senior-citizen center turned into a raucous shouting match when two defendant lawyers — Marty Esquivel, who represents Malott, and Sam Bregman, who represents Malott’s accounting firm Meyners and Co. — showed up uninvited.

Pfeffer has scheduled a hearing on Turner’s request June 19. I wonder how many voices will be raised there.

CDR Investigation Over?

That's what New Mexico Finance Authority chairman Steve Flance told a legislative oversight committee this afternoon. He said the FBI has wrapped up the investigation and sent it to U.S. Attorney General Eric Holder.

Flance said he was told that by NMFA lawyer Rey Romero. Romero told reporters he couldn't say who told him that.

For those trying to grasp all the ongoing financial scandals, the CDR investigation is about the California company that got to handle part of the state transportation bonds for the GRIP program -- around the same time the company made hefty contributions to Gov. Bill Richardson's political committees. This is the investigation that derailed Richardson's appointment as U.S. Commerce secretary.

What Flance said basically confirms what KRQE reported recently, using an anonymous source. However, Flance's statement appears to be the first time that any state official has said it in public.

Flance also made some interesting remarks to the committee about how the Finance Authority got involved in "swaps" and derivatives.

"The mistake we made was listening to financial advsers who had an interest in the work," he said. "Some conflicts of interest were not disclosed to the board."

Flance later told reporters he was refering to an advisory group set up by former Finance Authority director David Harris to look at alternative ways to finance the GRIP project. Advisers on that group included representatives of J.P. Morgan and other companies that later handled some of the bonds, Flance said.

"We thought we were getting independent advise, but (it turned out) they had a product they wanted to sell. That's my own opinion."

Flance said he and other board members have been interviewed by the FBI, who were "friendly" and mainly wanted documents. He said never testified before the CDR grand jury -- and that no current board member or current NMFA staffer has testified. The key word is "current."

It's known that the grand jury is looking at Harris as well as former Richardson chief of staff Dave Contarino, Mike Stratton, who worked as a Richardson presidential campaign official as well as a CDR lobbyist, and Chris Romer, a Colorado state senator who works for J.P. Morgan.

Correra Out of Raton Racetrack

Marc Correra, the Santa Fe investment broker at the center of a recent state investment controversy has withdrawn as a partner in the planned racetrack in Raton.

This just in from the Associated Press:

The state Gaming Control Board has authorized a casino license for a proposed racetrack in the northeastern New Mexico community of Raton. It clears the way for the project to proceed, since the state Racing Commission earlier gave approval for horse racing.

Project manager Michael Moldenhauer says construction activity should begin in the next two weeks.

The board acted after an investor, Marc Correra, said he was withdrawing his application from the project. A news release issued by the Gaming Control Board indicates Correra has decided to focus on other business opportunities.

Board Chairman David Norvell told Moldenhauer the project means a lot to the Raton area and that failure is not an option.

Correra shared in more than $15 million in fees for helping secure business for clients who handled state pension and permanent fund investments. His father Anthony Correra is a contributor to and adviser of Gov. Bill Richardson. Marc Correra's lawyer Sam Bregman has said political connections had nothing to do with his client getting so many fees.

Here's the link to my story about last month's meeting CLICK HERE

UPDATE: Just got a copy of the news release referred to in the Associated Press story. It says the Gaming Control Board received a "communique" from Correra's Chicago attorney saying Correra was withdrawing his application for his "individual finding of suitability in connection with the racetrack/casino application filed by Horse Racing in Raton Limited Partnership."

"Mr. Correra has decided to focus on other business opportunities currently available to him

"The Board respects Mr. Correra's decision and would like to take this opportunity to express our appreciation for his participation in our licensing process," the news release says. "We compliment him on his professionalism and wish him the very best in his future endeavors."

Gov. Richardson on American Prisoners in N. Korea

Gov. Richardson spoke Monday on CNN International about American journalists sentenced to 12 years in prison in North Korea. Richardson, who has a history of negotiating release of Americans imprisoned in North Korea, says there are hopeful signs despite the harsh 12-year sentence received by journalists Laura Ling and Euna Lee.




You can read the story on the CNN site.

Political Odd Couple Coming to Santa Fe

To quote The Patty Duke Show theme, "What a wild duet!"

The greatest political odd couple of our time, James Carville and Mary Matalin are coming to Santa Fe this month to give a talk titled "All's Fair: Love, War & Politics" at the Lensic Performing Arts Center.

Just in case you somehow missed either of them on any of the talking-head CNN shows they frequent, Carville, aka "The Ragin' Cajun" is a longtime Democratic Party operative and was a bigwig (without the wig) in President Bill Clinton's 1992 campaign. Matalin is a longtime Republican operative and former aide to Vice President Dick Cheney.

According to an ad in today's Pasatiempo, the presentation on Saturday June 20 will have "a special focus on bi-partisanship and health care."

Good. If there's one issue that inspires bi-partisanship, it's health care. (I also believe in unicorns and Care Bears.)

The speech is sponsored by the St. Vincent Hospital Foundation and Christus St. Vincent. Tickets are $10 and available at the Lensic box office.

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.

Defendants in Foy Case Won't Turn Over Documents

Here's another case of the state refusing to turn over documents related to the investment scandals. This time it's in the "discovery phase" of the Frank Foy whistle-blowing suit.

State officials as well as the Chicago-based Vanderbilt Financial, which lost $90 million in investments from state pensions and public trust funds, have told the court they won't turn over discovery documents requested in Frank Foy's pay-to-play suit against former Bill Richardson chief of staff and campaign manager Dave Contarino, state Investment Officer Gary Bland, Educational Retirement Board chairman Bruce Malott and others.

In a motion filed in state District Court in Santa Fe last week, Victor Marshall, attorney for Foy, who is a former ERB investment officer, said, "All of the defendants have refused to answer any interrogatories or produce any documents whatsoever, even the most basic documents concerning the transaction giving rise to this lawsuit."

In his response to Foy's discovery motion asking for various documents, Bland said the requests were "vague, overly broad and overly burdensome." Vanderbilt, in its response, uses similar terms, which the plaintiffs call "boilerplate" language.

See my story in the New Mexican on this HERE.

The Facebook Candidate

Just a couple of years ago Senate Majority Leader Michael Sanchez successfully carried a bill that would have scuttled the mandatory electronic filing of campaign finance reports. (It passed the Legislature but was vetoed by Gov. Bill Richardson.)

He explained at the time that he wasn't trying to sandbag electronic reports --- which makes it easier for the press and the public to access. “This isn’t trying to hide campaign-finance reports,” he told me in 2007. “It’s for people like me who aren’t very good at computers or access to the Internet.”

That was then, this is now.

This weekend, like some Internet hipster, Sanchez used his Facebook page to announce that he's forming an "exploratory committee" for a possible gubernatorial run.

You don't have to have a Facebook account to check out his page. Just CLICK HERE.