Fraud Fest 2010

Even by New Mexico standards, this year looks to be a memorable one for political corruption. Consider some of the headlines from this summer alone:

• Secretary of State Mary Herrera was accused by a subordinate, former Elections Bureau Director AJ Salazar, of soliciting what she calls “sponsorships” from contractors, and other

.

• State Attorney General Gary King was accused by Salazar’s attorney of covering up the allegations against Herrera, when he should’ve been investigating them.

• Santa Fe City Councilor Matt Ortiz faces an ethics complaint for failing to disclose his business relationship with a

under police investigation for soliciting favors from public officials.

• The two major party candidates for governor, Lt. Gov. Diane Denish and Doña Ana County District Attorney Susana Martinez, have been trading accusations of impropriety. Martinez is under scrutiny for buying office supplies from a deputy’s company without a competitive bid. Denish has been called to the carpet for her silence during years of pay-to-play investigations under Gov. Bill Richardson.

However these specific cases end, such stories will repeat themselves, Groundhog Day-style, until there is an “accountability revolution” at every level of government in New Mexico.

That’s the opinion of State Auditor Hector Balderas, who tells SFR the ethics measures passed this year by the New Mexico State Legislature won’t change much, in the bigger picture.

“It’s important for us to catch bad guys, and we’ve caught a few. But I think we need systemic reform,” Balderas says.

Both Denish and Martinez have promised to increase Balderas’ budget if elected. Yet neither candidate has offered Balderas specifics insofar as numbers, he says. Neither have they proposed concrete steps to increase cooperation between agency inspectors general and the Office of the State Auditor.

Those inspectors general—the oversight officers within each state agency—lack the independence needed to conduct effective investigations, Balderas says, and communicate with the auditor in a way that’s “casual at best.”

In fairness to the inspectors general, Balderas has found there’s competence lacking in many departments.

“In government, generally, the keys and the bank accounts are turned over to people who, with all due respect, are not the most competent to be handling these multimillion-dollar budgets,” Balderas says. “There’s no way corporations that size would allow them to be run by people without certification.”

Balderas knows he sounds something like a Republican on this point. “Can you believe that?” he says. “And I’m a liberal Democrat.”

This year, an actual Republican is running against Balderas: Errol Chavez, a former Drug Enforcement Administration special agent who lives in Las Cruces, and who, before state Republican Party Chairman Harvey Yates asked him to run for auditor, was running for commissioner of public lands.

Chavez says his first move, if elected, would be to investigate the Auditor’s Office. Why? “People are reporting they’ve called in and reported some wrongdoing. Hector has not done anything at all about it,” Chavez tells SFR. “We need to find out why things weren’t done.”

Chavez refuses to provide specifics. Balderas says his own reputation for independence is well-deserved, and says Chavez appears to misunderstand the legal authority of the office he seeks.

“If candidates are going to make accusations, they’d better come well-researched when it involves my professional work,” Balderas says. “Right now, this office has a strong reputation for not only being independent, but following the rule of law.”

Balderas believes the next governor, whether Democrat or Republican, has a rare chance to bring meaningful reform.

“The fiscal crisis has led, I believe, to an opportunity to discuss efficiency, to discuss oversight, in a way that we’ve never seen in the history of New Mexico,” he says.

So far, though, the recession has had the effect of pinching Balderas’ already pitiful budget.

This year, state lawmakers and Gov. Richardson cut the auditor’s budget by 3 percent, to $2.3 million, according to the Legislative Finance Committee’s 2010 post-session review.

That means the auditor’s budget is only $112,000 larger than that of the state Racing Commission, which is charged with regulating New Mexico’s six horse-racing tracks.

The New Mexico Gaming Control Board, which oversees the state’s 20 tribal casinos, has a budget of $5.4 million—more than double the resources available to Balderas.

The auditor’s relatively small budget pays for approximately 30 employees, half of whom are actual auditors. They are expected to keep tabs on a state budget with combined revenues of well over $8 billion.

And unlike his counterparts in most other states, Balderas’ office must audit not only state government, but every city and county government in New Mexico, every public school district, every district courthouse and every Podunk irrigation district—some 600 governmental entities in all.

The task is more or less impossible. Which is why Balderas isn’t joking when he says it’s potentially criminal for the Legislature to severely underfund his office.

Balderas cites a decades-old case in which the New Mexico Supreme Court ruled illegal the Legislature’s attempt to cut the auditor’s budget to $1.

“The Supreme Court ruled that the auditor is an independent representative of the people,” Balderas tells SFR. “The question that’s never been litigated is whether or not severely underfunding a budget is just as illegal as giving them $1…Is starving me just as criminal as robbing me?”

Maybe next year, that’ll be the question grabbing headlines.

NEW MEXICO’S FRAUDLINE

New Mexico State Auditor Hector Balderas supplied SFR with a breakdown from the hotline he launched two years ago for tipsters to report waste, fraud and abuse in government.

Since fall 2008:

421 cases have been received by hotline

258 have been processed

163 remain under investigation

So far in 2010:

80 reports have come in

50 were submitted anonymously

35 concerned alleged fraud

15 concerned conflicts of interest

13 concerned contracting or procurement improprieties

9 concerned accounting or auditing irregularities

5 concerned “theft of time”

3 concerned excessive benefits, travel or meal allowances

Call the Auditor’s hotline at 1-866-OSA-FRAUD, or fill out a report online

.

Santa Fe Reporter