Embattled Richardson ally linked to troubled health foundation.
A key figure in the State Treasury scandal and powerful political ally of Gov. Bill Richardson may be in even more hot water because of his relationship with an already troubled Santa Fe nonprofit.
SFR has learned that investor Guy Riordan heads up a
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team from the national brokerage firm Wachovia Securities that is entrusted with handling nearly $23.5 million worth of investments for the Con Alma Health Foundation.
Con Alma was created in the wake of the 2001 dissolution of Blue Cross/Blue Shield of New Mexico as a charitable health group that distributes money to community-based health care organizations.
Both Con Alma and its former board
president, New Mexico Insurance Division Superintendent Eric Serna, are currently under
investigation by the Attorney
General's Office
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for alleged conflicts of interest.
Now, with Riordan thrown into the mix, Con Alma has been linked to a scandal that continues to pull in some of the state's most powerful politicians.
Riordan was implicated by former state treasurer Michael Montoya in an alleged kickback scheme during his April 18 testimony in the trial of former state treasurer Robert Vigil. Vigil is charged with 28 counts of racketeering, conspiracy, money-laundering and extortion for allegedly accepting cash to steer state business to specific companies.
Montoya, Vigil's predecessor, admits to receiving the kickbacks as well and is a government witness in the Vigil trial.
In his testimony, Montoya alleges Riordan paid him up to $100,000 in kickbacks in exchange for Montoya guiding business to Riordan, who has handled more than $1 billion in state investments.
Gov. Bill Richardson subsequently fired Riordan from his post on the State Game Commission and, along with numerous other politicians, vowed to donate campaign contributions given by Riordan to charity, as first reported by numerous local media outlets.
The serious allegations cast questions about Riordan's relationship with Con Alma and how exactly Wachovia became steward of the health foundation's money.
At least one former Con Alma board member, Barbara McAneny (CEO of New Mexico Oncology and Hematology Consultants), says Riordan's involvement with Con Alma is worrisome in light of the recent testimony.
"Hearing all of this, I'm concerned as to whether we did the job we were supposed to do," McAneny says, "and I'm concerned whether we had the appropriate stewardship of that money."
McAneny-who served on the board from Con Alma's inception in 2002 until 2005 when the board declined to re-elect her-also questions how Wachovia was chosen to handle Con Alma's finances.
"It was a done deal by the time it got to the board," McAneny says. "We were told 'here are your financial advisors' and that was it."
Con Alma Executive Director Robert Desiderio says the foundation's finance committee
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recommended the board hire Wachovia after interviewing numerous local banks and investment houses. Desiderio says the board voted around May 2002 to approve hiring Wachovia, which currently earns an annual 1.2 percent cut of the $23.5 million in Con Alma investments handled by Wachovia.
Desiderio says that following Montoya's testimony, he received a call from a representative from Wachovia's branch management office who told Desiderio that Riordan is not a target of the US Attorney's treasury investigation.
Rumaldo Armijo, spokesman for the office of US Attorney David Iglesias-which is trying the Vigil case-declined to comment. Wachovia Securities spokesman Tony Mattera also declined comment, citing "the fact that this is an ongoing legal matter." But despite Montoya's testimony at the Vigil trial, Desiderio says the allegations will likely not affect the partnership between Con Alma and Wachovia.
"The statements made by Mr. Montoya in court is not something that the US Attorney sees as a problem," Desiderio says. "The work of Wachovia has been simply outstanding."
But Richard Carpenter, co-chairman of Con Alma's finance committee, says he is concerned about the allegations, though he terms them as "untested." Carpenter, along with Con Alma finance committee co-chairman and recently appointed state General Services Secretary Arturo Jaramillo, made the initial recommendation to the committee to hire Wachovia.
Carpenter says he was swayed by Wachovia's offer to initially conduct pro bono consulting on Con Alma's behalf. Still, Carpenter is worried by how Montoya's allegations regarding Riordan might ultimately impact Con Alma.
"If I was Wachovia, I'd be asking myself whether Mr. Riordan is an asset or a liability," Carpenter says. "They have some decision-making to do."
According to figures provided by Carpenter, since 2003 Riordan's team has made an annual return rate of approximately 15.6 percent for Con Alma on its investments, including the first quarter of this year.
Riordan did not return calls to his home office or to his Wachovia office in Albuquerque. His lawyer Timothy Padilla also did not respond to an interview request, but has publicly denied Montoya's allegations against his client.
Eric Serna acknowledges Riordan is a "friend," but denies he had any involvement in the hiring process that brought Wachovia on board.
"I had absolutely nothing to do with that," Serna says. "It's my understanding that [the decision] was made by committee. I was not part of that committee. I didn't have any involvement."
Serna-currently on paid administrative leave from his insurance superintendent post-is under investigation by the Attorney General's Office for actions taken in his dual capacity as Con Alma president and insurance chief.
As first reported by the Albuquerque Journal, Serna's Insurance Division issued a contract to Century Bank, partially owned by another Richardson ally, Gerald Peters. During the same period of time, Century began donating at least $124,000 in contributions to Con Alma. Furthermore, according to the Journal, Century Bank purchased $16,500 worth of pens from the Española jewelry store operated by Serna's wife just months before Century Bank won the lucrative contact.
Serna says that, despite the controversy swirling around Riordan and now Con Alma, he sees no reason why the foundation shouldn't continue to do business with Wachovia.
"Wachovia is an internationally recognized investment group so
they have expertise that transcends any type of criticism of anybody who may be getting some adverse publicity," Serna says. "It's a big operation with a lot of expertise and they've performed very well for Con Alma. If you look at the returns, they've been very, very good."
The attorney general, investigating Con Alma, did not know about Riordan's connection with the foundation until questioned on the matter by SFR.
"The allegations of monetary kickbacks by Guy Riordan raised in the Robert Vigil trial are quite serious," Attorney General Patricia Madrid said in an April 24 written statement to SFR. "So serious, in fact, that the Governor removed him from the [State Game Commission]. My office was not aware that Mr. Riordan had any involvement with the Con Alma Foundation. Under our authority to examine and investigate charitable organizations we are concerned that all nonprofits operate in accordance with the law and their specific mission. We have requested that Con Alma cooperate with our office and provide numerous documents for our review. We will also be interested in learning how the Con Alma Board decides to proceed in light of the allegations about Mr. Riordan."
On April 21, the Attorney General's Office sent a letter to Con Alma's board of directors requesting documents, including those pertaining to possible conflicts of interest, audited financial information and board minutes, e-mails and communication records. The letter charges the directors with "arguably violating the Board's legal obligation to act in the best interests of Con Alma" in the actions it took regarding Serna.
