First Shots in the Booze Battle

In today's paper I previewed what's bound to be a big battle in next year's Legislature -- a move to increase the state excise tax on alcoholic beverages.

According to lobbyist Ed Mahr, to whom I spoke yesterday, the state hasn't raised this tax since 1994. But between the increases that year and the year before, the tax went up by 100 percent he said. As the story points out, New Mexico is in the top 10 states for taxes on beer and wine and in the top 20 for distilled spirits. (There's also a tax on "fortified" wine, which is higher, but hardly anyone ever talks about this, I supposed because winos don't vote.)

"In a recession, it's a bad idea to raise any tax. Things are tough out there for businesses. The excise taxes here are too big already," Mahr said.

But Rep. Brian Egolf, D-Santa Fe, argues that his "dime-a-drink" proposal won't have that big of an effect. "If you are going out with your friends to have three or four beers — with a designated driver, of course — you're not going to stay home just because it's going to cost you an extra 40 cents," he said.

Whoever's right, it should be an interesting showdown. The real winners might be the broadcast industry. The last time the state gave serious consideration to raising alcohol taxes (2003) a national liquor industry group waged a radio campaign against the idea.

Eichenberg Reaffirms Support for Denish

Sen. Tim Eichenberg, D-Albuquerque, in a statement e-mailed to me and several other political bloggers, spoke about his recent prediction that Lt. Gov. Diane Denish would lose in her race for governor because of what he called her “complacency or complicity with the ‘pay-to-play’” atmosphere in the Richardson administration.

But notice he's not retracting his remarks nor is he challenging the accuracy of the initial report by photographer/blogger Mark Bralley.

Here's what the senator said:

I find it unfortunate that my comments were used to create division among Democrats and the Democratic Party, I will continue to support both! I realize my comments have stirred emotions on both side of the aisle but I hope they will provoke continued discussions on ethics reform, transparency and accountability.

"As Lt Gov Diane Denish continues the fight to bring meaningful ethics reform to Santa Fe, I will proudly vote for her proposals to make government more transparent and accountable to the taxpayers. She can lead New Mexico into the future and there is no doubt in my mind who I will vote for in November.

Gary Johnson 2012 Ad

Here's the latest from the grassroots group pushing former New Mexico Gov. Gary Johnson for president. No evidence Johnson himself had anything to do with this.


Warning! Techno music is involved here.



(Thanks Heath.)

Taxes Increases Inevitable, Richardson Says

I just got back from a press conference with Gov. Bill Richardson. Although he's campaigned both for president and for re-election as governor as a tax-cutting Democrat, Richardson told reporters today that tax increases are "inevitable" during the next legislative session because of the budget crisis.

"It's very painful," he said. Richardson declined to say which taxes he wants to boost. He said he'll soon be appointing a committee to study the best ways to raise revenue.

On another topic, I asked Richardson if he planned to follow Lt. Gov. Diane Denish's example and give his political contributions from indicted CDR found David Rubin to charity.

His answer proves he's still got a sense of humor. "I'll have to review that," he said. "Did I get donations from them?"

For the record, the $110,000 CDR gave to Richardson's political committees led to a federal investigation and cost him a job in the Obama cabinet. The investigation ended with the Justice Department deciding not to indict anyone.

Michael Steele Coming to NM

The state Republican Party just announced that Republican National Committee Chairman Michael Steele will be in Albuquerque on Friday, Nov. 13.

Steele will appear at a cocktail reception and dinner at Hotel Albuquerque in Old Town. I assume it's some kind of fundraiser, but no ticket price is listed. For more information try this email.

Mayor-elect R.J. Berry will be a "special guest."

Martinez First With Eichenberg Quote

Yesterday Matt at NM FBIHOP predicted that Sen. Tim Eichenberg's statement that Diane Denish will lose the governor's race would be the subject of Republican press releases for the next few days.

That's coming true. GOP governor candidate Susana Martinez was the first to issue a "They Said It!" press release.

One thing you have to give Team Martinez: They've got the best rapid-response effort of any of the candidates. Martinez almost always is the first to comment on such developments.

Smiley in Bloomberg

Bloomberg.com has a story this morning featuring Vincent "Smiley" Gallegos -- who currently is facing state charges alleging misuse of bond money when he was director of a state affordable housing program -- and CDR Financial Products, whose president and founder was indicted last week on unrelated charges in New York federal court.

Gallegos, then the executive director of Region III Housing Authority New Mexico Inc., sold bonds in February 2003 with the help of Los Angeles-based CDR Financial Products Inc. and its founder, David Rubin.

“At the time the authority issued the bonds, there was ample evidence that the program would not be successful,” the IRS wrote in March 2007 after investigating the transaction. “A prudent person would not have taken the same actions.”

Two months later, federal tax authorities revoked the bonds’ tax exemption. The IRS found that one of the agency’s banks, Paris-based Societe Generale SA, would earn as much as $1.5 million on a program for low-income and first-time homebuyers that lent only about $2.6 million. Tax authorities also found that CDR was collecting more than $50,000 a year from Societe Generale in fees not disclosed in public bond documents.

Gallegos, 56, and Rubin, 47, are under criminal indictments as the result of separate investigations unrelated to that debt.

Bloomberg quotes Gallegos' lawyer Paul Kennedy saying no jury will convict his client. The story also notes "Gallegos didn’t open the door of his home in Albuquerque when a reporter knocked, nor did he answer his mobile phone."

Eichenberg Says Denish Can't Win

Photographer/Blogger Mark Bralley got a nice scoop involving the governor's race.

State Sen. Tim Eichenberg, D-Albuquerque, who had been considering a race for lieutenant governor, showed up at a coffee held by state Rep. Janice Arnold-Jones , R-Albuquerque -- who is running for governor -- and said Lt. Governor Diane Denish "can't win."

From Bralley's blog What's Wrong With This Picture:

He talked with current Lt. Gov. Diane Denish, who is the only declared gubernatorial Democratic Party candidate, telling her that because of her “complacency or complicity with the ‘pay-to-play’” atmosphere surrounding the administration of Governor Bill Richardson, and standing quietly behind him, Eichenberg was unwilling to invest a half million dollars in a losing campaign.

"I looked her square in the eye when I said that,” Eichenberg said. “I told her I didn’t think she was going to win.”

Pretty strong words from a fellow Democrat!

As I blogged here a couple of weeks ago, I talked with Eichenberg at the outset of the special session and he told me he wouldn't be running. At that time, however, he didn't mention pay-to-play or spending a half-million dollars on a losing race.

Eichenberg told me that he "doesn't compliment the ticket." As I said at the time, I assumed he was talking about ethnicity. He would have been the only Anglo among six Hispanic candidates. Denish also is Anglo.

Why was he at an event sponsored by a Republican lawmaker/gubernatorial candidate? Bralley explained Eichenberg's district overlaps with Arnold-Jones' and it's billed as a "Saturday morning constituent meeting" that's "open and nonpartisan."

Campaign Tidbits

I just got official work that Santa Fe Rep. Lucky Varela will be seeking re-election to his District 48 seat.

Varela, a Democrat, has served in the Legislature for 23 years and is chairman of the Legislative Finance Committee. He's earned the reputation of having more knowledge of the budget process than anyone in state government.

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Republican gubernatorial candidate Allen Weh says he's collected enough signatures to get his name on the ballot.

"Republican gubernatorial candidates need 1,062 signatures to qualify for the pre-Primary convention and 2,124 signatures to secure a place on the ballot for the June Primary," a Weh press release said, noting he's reached that latter mark. "Reaching this goal will place Weh’s name on the ballot regardless of the results of the Pre-Primary convention slated for early March."

There is the little formality of verifying the signatures if another candidate decides to challenge. This has kept some candidates off the ballot in the past. But I haven't talked to anyone who thinks Weh will have this problem.

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State Sen. Jerry Ortiz y Pino, D-Albuquerque, has been campaigning for lieutenant governor for a few months now. In fact, I'd forgotten, until I got his press release today, that he hadn't officially declared his candidacy.

Here's the news: Now he has. Or at least he will in a couple of hours (5:30 p.m. to be exact) at his office in Winrock Mall.

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Finally, the state Democratic Party is having a little fun with this video of GOP gubernatorial candidate Doug Turner making a campaign video with his family, apparently at some rally this week.

"After Turner forgot to actually announce his candidacy, his personal public relations team reminded him why he was there. And even then, it took Turner four tries to get it right and tell his audience that he was actually running for Governor," says the party blog

To be honest, I'm a little disappointed. I was hoping for a "Macacca moment" or something like John Edwards primping his hair. But here Turner doesn't come across as stupid or vain. And even though he's obvious taking direction from some guy with a video camera, he doesn't come across as "flashy prepackaged" like the blog says. To me, this video makes him look human -- a guy with a nice young family (including a toddler who messes up Doug's mike.)

You be the judge. Here's the video.

Gifts From CDR

State Republican Chairman Harvey Yates, responding last night to the CDR indictments, is calling for Gov. Bill Richardson and Lt. Gov. Diane Denish to "relieve themselves of all campaign contributions collected from (CDR owner David) Rubin." That's not such an unusual demand. What's unique is that Yates says the money shouldn't be given to charity, which is the usual route for tainted campaign cash. (In the past I've sardonically referred to this as the "Kickbacks for the Kiddies" campaign.)

Instead, Yates says, these funds should be given to the state attorney general "for an account maintained specifically to investigate political corruption in New Mexico.” That might not be a bad idea to have such an account for toxic campaign funds. Of course our charities that have come to depend upon windfalls from corruption would be hurt.

While thinking about those CDR contributions, I came upon this January 2009 report from the Institute of Money in State Politics. It's a look at contributions from Rubin and CDR to politicians from around the country.

Pennsylvania Gov. Ed Rendell tops the list with $35,000 in contributions. 2003 California gubernatorial candidate Cruz Bustamante is second with $21,200 and Richardson third with $20,000.

Of course, these numbers aren't complete, at least as far as Richardson goes. Most of CDR's contributions to him went to Richardson PACs Moving America Forward and Si Su Puede, which paid for hotels, limousines etc. at the 2004 Democratic National Convention in Boston for Richardson and his staff.

In fairness, I don't know whether there are simialr PACs for Rendell or Bustamante to which CDR might have contributed. In fact a Pittsburgh paper reported earlier this year that Rendell received $40,000 from Rubin.

The report lists $10,000 in CDR contributions to Denish. As her campaign for governor continues, expect to hear more about this cash from the state GOP and the Republican gubernatorial candidates.

UPDATE 2:10 p.m.:

According to Denish campaign spokesman Oren Shur, the campaign donated its old CDR contributions to two Albuquerque charities this morning.

"Earlier today, the campaign delivered a $5,000 check to the Storehouse, which provides food to families in need, and a $5,000 check to the Barrett Foundation, a shelter for women and children," Shur said in an e-mail.

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Courtesy of Heath Haussamen, here's a copy of Thursday's CDR indictment in New York federal court.

Rubin Indictment