Lawsuit against housing authority board member dismissed, but scandal continues

A lawsuit Region III Housing Authority Director Vincent “Smiley” Gallegos filed against one of the Region VII board members has been dismissed, according to The Citizen.

Gallegos filed the slander lawsuit against Frances Williams earlier this year after Williams alleged wrongdoing on the part of the housing authorities. The lawsuit was dismissed last week in district court in Las Cruces.

But that’s not all that’s going on with the housing authority scandal.

Here’s the short background: Gallegos has been embroiled in controversy related to his management of the Las Cruces-based Region VII Housing Authority and the Region III authority in Albuquerque. Perhaps most concerning is that Region III recently defaulted on some $5 million in bonds it owes the state.

In addition, the authority in Las Cruces has done little about the housing problem while building up a debt of several hundred thousand dollars.

The governor’s office recently completed a review of the state housing authorities, and said problems will make it difficult if not impossible for them to survive. The review cited operational troubles and financial losses at the authority based in Albuquerque, mismanagement and disarray at the authority based in Las Cruces, and questions about operations of a related non-profit that does much of the construction for the authorities, Housing Enterprises, Inc.

The review recommended the creation of an agency to oversee the authorities.

The authorities are quasi state agencies. They are supposed to be funded by bonds that are repaid with profits from home sales, so no tax dollars are used. The governor appoints housing authority board members.

At a Legislative Finance Committee meeting Tuesday in Santa Fe, the state investment council presented the preliminary findings of its own investigation, according to Wednesday Morning Quarterback, and the results weren’t pretty. A more detailed report should be out in about six weeks.

And most interesting of all: The Citizen in Albuquerque is currently running a three-part series examining the problems with the housing authorities and the bizarre tenure of Gallegos. It’s lengthy but well worth your time. Click here to read part one, here to read part two and here to read part three. And click here for a timeline on Gallegos’ tenure.

Gallegos, a former state legislator, makes more than $158,000 per year from the housing authority corporations. He is also a registered lobbyist in New Mexico who, sources tell me, spends a lot of time in Speaker of the House Ben Lujan’s office during legislative sessions.

The most interesting point of the articles in The Citizen: No one has oversight of the housing authorities. The state is responsible for them but they aren’t accountable to the state.

“We have no teeth to make them comply and send us audits. Neither does DFA, the LFC or the state auditor,” Erin Quinn, New Mexico Mortgage Finance Authority senior program advisor, told The Citizen.

There have been several audits in recent years that have revealed widespread problems in the housing authorities.

“The way these things are structured, they are ripe for corruption,” former Lt. Gov. Walter Bradley told The Citizen. “We tried to pass legislation to get rid of them and couldn’t get it done. It’s just astonishing what they can do.”