State auditor says Hobbs may need ‘new leadership’


State Auditor Tim Keller’s office has launched its third investigation in recent months into alleged conflicts of interest and other problems in Hobbs city government.

And after already twice directing city leaders in Hobbs “to take prompt action to implement policies and procedures to protect taxpayer dollars and restore confidence,” Keller sounds impatient.

Tim Keller

Courtesy photo

State Auditor Tim Keller

“If the city is not serious about righting the ship, perhaps the citizens of Hobbs could be better served with new leadership,” Keller said in a statement to

The new conflict-of-interest allegations involve Hobbs Mayor Sam Cobb. In a recent commentary, activist Nick Maxwell wrote that the mayor is listed in state records as the “organizer” of a business that “furnishes and monitors court-mandated ankle bracelets for persons on house arrest.”

The city has beefed up its police force in recent years. Maxwell questioned whether Cobb profits personally from increased city spending on law enforcement.

“More arrests in a strained system almost certainly translates to increased imposition of house arrests,” Maxwell wrote. “How convenient!”

Cobb didn’t disclose the potential conflict when the city commission voted last year to accept a federal grant to pay police officers, Maxwell wrote.

The state auditor’s office confirmed that it has “initiated a fact-finding case regarding the latest allegation” made by Maxwell.

Cobb and Hobbs City Manager J.J. Murphy haven’t responded to’s requests for comment.


Keller’s office first chastised the City of Hobbs last year for the way it handled two contracts with an attorney and a consultant from Pennsylvania, where Murphy used to work. That came after Maxwell alleged in a complaint to the state auditor that the contracts represented “less-than-arms-length” dealings.

Both contracts, Deputy State Auditor Sanjay Bhakta wrote to the city in October, “were handled in a manner that raises significant uncertainty as to whether the City received competitive prices. Additionally, the fact that both firms are from Pennsylvania and have connections to the City Manager’s prior employer raises the appearance that the contracts may not have been at arm’s length.”

The auditor’s office found no procurement code violations in that instance. It recommended changes in city policy and said it would continue monitoring the situation.

Then in January, the auditor’s office determined that Hobbs officials weren’t filing required financial disclosures or recusing themselves from issues on which they may have conflicts. That investigation came after Maxwell discovered that a business tied to Cobb had given a $60,000 home loan to Murphy, which the auditor’s office said “raises a potential conflict of interest with respect to employment decisions.”

The auditor’s office also said at the time that the city had “violated its procurement code by purchasing over $40,000 of goods and services from vendors owned by two commissioners.”

“This was a failure of multiple elected officials to follow their own ethics ordinance,” Keller said at the time.

In light of the newest investigation, Keller encouraged those with “further information” to call the state auditor’s fraud hotline: 1-866-OSA-FRAUD.

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