Fraud Against Taxpayers Act allows lawsuit alleging schoolteachers and taxpayers lost $90 million in investment deals made in exchange for contributions to Richardson’s presidential campaign
When he signed the Fraud Against Taxpayers Act into law in 2007, Gov. Bill Richardson said it “sends a strong message to those who would try to cheat the taxpayers and the state of their money.”
“Crime doesn’t pay,” Richardson said at the March 15, 2007 bill-signing ceremony in his office.
On Wednesday, the public learned that the very law Richardson said would help fight corruption was being used to file a lawsuit on behalf of the state alleging that schoolteachers and taxpayers lost $90 million in investment deals made in exchange for contributions to Richardson’s presidential campaign. Richardson, whose office says the allegations are baseless, hasn’t been publicly named as a defendant in that lawsuit, but the names of dozens of defendants remain sealed, and it’s possible the governor’s is among them.
The act, which was unanimously approved by the Legislature in 2007, was sponsored by state Rep. Joseph Cervantes, D-Las Cruces, who said in an interview that he proposed it in response to the scandal in the treasurer’s office that led to the previous two state treasurers serving time in federal prison for felony crimes.
“The act is designed to weed out corruption in state government by providing a bounty for whistleblowers to come forward with knowledge of wrongdoing,” Cervantes said. “There were apparently a lot of people who knew what was going on (in the treasurer’s office) and didn’t come forward. As we learn more and more about other issues in state government, I’m counting on people coming forward, and this act provides a financial incentive for the private citizen to help expose any wrongdoing in government.”
What kind of financial incentive? If the citizen suing on behalf of the state wins and damages are awarded to the state, he or she could receive between 15 and 30 percent of the award.
In the case of the current lawsuit alleging pay to play in the Richardson administration (which you can read by clicking here), former New Mexico Educational Retirement Board Chief Investment Officer Frank Foy is seeking an award that could total more than $300 million for the state, so he could personally walk away with tens of millions of dollars or more for his work — if he’s successful.
As required by the law, Foy had to first take his allegations to Attorney General Gary King. King reviewed them and decided, instead of prosecuting them, to allow Foy to proceed with the lawsuit on behalf of the state.
King’s office said on Thursday that the AG’s decision to decline prosecuting the case doesn’t mean the AG thinks Foy doesn’t have a case: What it means is that the AG believes Foy “is capable of pursuing his claims and that we can assure the state’s interests are protected.”
So has the governor’s opinion of the Fraud Against Taxpayers Act changed now that it’s being used to target his administration? A Richardson spokesman has not responded to a request for a response to that very question.