At the request of the State Investment Council, the attorney general’s office is looking into the scandal that toppled the state’s regional housing authorities earlier this year.
Charles Wollmann, spokesman for the investment council, said the agency asked the attorney general to look into the widespread misuse of $5 million in bonds the Region III Housing Authority in Albuquerque sold to the state, then later defaulted on.
“We believe there are some things that merit taking a look at,” Wollmann said. “We’re just investors. We aren’t prosecutors or investigators. … It’s up to the AG to decide whether there is any criminal or civil action to be taken.”
Sam Thompson, spokeswoman for the attorney general’s office, confirmed that the matter was referred to the office, which she said has requested additional documents from the investment council.
The investment council released in October its report on the operations of the housing authorities – quasi-government agencies charged with providing affordable housing around the state. You can read the entire report by clicking here.
The investment council found widespread misuse of the state-owned bonds, including almost $900,000 that went to former Region III Director Vincent “Smiley” Gallegos as salary, benefits and a loan.
The scandal ultimately resulted in the closing of housing authorities in Las Cruces and elsewhere and a probable restructuring of the entire system.
Perhaps the most intriguing misuse of money revealed in the investment council report was a $300,000 loan the housing authority made to a private company owned by Gallegos under the guise of purchasing more than 30 lots in Las Cruces, even though the properties had already been purchased by the authority.
Gallegos repaid the loan, with interest, on July 31, the day before he resigned.
The report also found that homes were being sold to investors, in addition to two employees and a board member of the Region III authority. The attorney general is suing over the homes sold to those tied to the housing authority.
Gallegos, a former legislator from Clovis who has repeatedly denied misusing the money, was further implicated in the housing authority scandal on Monday when the Albuquerque Journal reported that a Bernalillo County metropolitan judge and a top aide to Speaker of the House Ben Lujan, a close friend of Gallegos, have been living rent-free in homes owned by the Region III authority.
Lujan has denied having knowledge of any deal between Gallegos and his aide, and says politics were not involved.