Sen. Papen is among those who are frustrated that the case hasn’t moved forward
Attorney General Gary King has delayed his plan to take the drawn-out investigation of scandal in the state’s affordable housing system before a grand jury, and that has some frustrated.
Witnesses in the case had been subpoenaed to appear before the grand jury in February, but that never happened. Multiple sources confirmed that the housing authority grand jury was postponed, but King’s office, which never confirmed its grand jury plans in the first place, won’t say now why the grand jury has been delayed.
As is customary, AG spokesman Phil Sisneros would say only that his office doesn’t comment on the status of investigations.
The delay frustrates Sen. Mary Kay Papen, D-Las Cruces. She was among those expecting action from the AG sometime during the current legislative session, in which she is the sponsor of a bill that would overhaul the housing authorities in response to the scandal.
“Gary King said he was making this a priority, and I hope that’s accurate because it doesn’t appear that way,” Papen said. “… They say they’re working on it, and I’m not really privy to what they’re doing. It just seems like it’s grinding very slow.”
The investigation has spanned nearly three years and preceded King taking office at the beginning of 2007. King said the probe was a top priority when he took office but, before news broke in January of the plan to take the case before a grand jury last month, many had begun to wonder whether it would ever lead to criminal charges.
Not all are worried. Lt. Gov Diane Denish, who has joined Papen in championing reform of the housing authority system, said she’s not concerned about the pace of the probe or the AG’s unwillingness to comment.
“It would be inappropriate for the attorney general’s office to discuss an ongoing investigation,” she said. “I am confident that he is pursuing all legal recourse. It’s important that all evidence is thoroughly reviewed before any action is taken.”
‘Everybody is waiting’
The scandal captured headlines in 2006 when the Albuquerque-based Region III Housing Authority defaulted on $5 million in bonds it owed the state. The State Investment Council (SIC) and state auditor have found widespread misuse of the bond money, which was supposed to be spent on houses.
The misuse included a $300,000 loan the housing authority made to a private company owned by former Region III Director Vincent “Smiley” Gallegos, the man at the center of the scandal, under the guise of purchasing more than 30 lots in Las Cruces — lots that had already been purchased by the authority. Gallegos repaid the loan before he resigned in 2006.
There has been some action in response to the scandal. The AG obtained court orders to boot three tenants from homes owned by Region III because they didn’t qualify for affordable housing — two employees of the authority and a board member. A judge was disciplined for a conflict of interest related to the scandal. And the SIC is suing Gallegos and Albuquerque bond attorney Robert Strumor in an attempt to recover public money that was lost when Region III defaulted on the bonds.
But no one has been held criminally liable, and Papen is among those hoping for more.
State Auditor Hector Balderas has publicly expressed frustration at the level of documentation the housing authorities were required to keep that cannot be located, and says that reality hindered investigation. But Balderas is unwilling to publicly guess whether the documents were destroyed, taken or not kept in the first place.
Papen said the volume of missing documentation that was required to be maintained leads her to believe documents were destroyed — which would be a felony crime — and she wants that to be among the actions for which someone is held accountable.
“I’m just hoping that we will see more action coming from the attorney general, that we’ll see his case move forward,” Papen said. “I think everybody is waiting to see what the attorney general is going to do — if and when he’s going to do something.”