Housing authority probe a priority for AG King

Those who were worried that an investigation of the scandal that toppled the state’s regional housing authorities last year would fall through the cracks with a change in leadership at the attorney general’s office have nothing to fear, the office’s new spokesman says.

The investigation is one of the top priorities for Attorney General Gary King, said spokesman Phil Sisneros.

“This case, as I understand it, is in the top tier of cases for the attorney general right now,” Sisneros said. “It’s on the front burner.”

Sisneros didn’t have many details, including an update on the investigation. King took office earlier this week and is still settling in, but Sisneros said King brought up the investigation Tuesday as one he wants to be a top priority.

The investigation began several months ago at the request of the State Investment Council, which asked former Attorney General Patricia Madrid 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.

The investment council released in October its report on the operations of the housing authorities. 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. That was one of several matters the investment council asked be thoroughly investigated to determine whether there was any criminal activity that needs prosecuted or any civil remedy for the loss of the bond money.

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 already suing over the homes sold to those tied to the housing authority.

In addition, a Bernalillo County metropolitan judge and a top aide to Speaker of the House Ben Lujan were living rent-free in homes owned by the Region III authority.