Auditor won’t say what information led his office to consider whether there has been wrongdoing related to the land office’s dealings. Meanwhile, related legislation passes the House.
State Auditor Hector Balderas has decided to expand his special audit of the New Mexico Land Office beyond reviewing policies and procedures to also consider whether there has been any wrongdoing in the office’s dealings related to state trust land.
“New Mexico has been plagued with recent scandals that have exposed fraud, waste and abuse at every level of government,” Balderas said today in a news release. “We have come across information during our special audit of the land office that compels us to expand the scope.”
The news release stated that the auditor had identified “areas of risk” that will be reviewed, including “related-party transactions,” “instances of financial benefit in exchange for land transactions” and “transactions executed between government employees and officials.”
“My goal is to determine whether or not there was misappropriation and mismanagement of New Mexico’s trust lands that harms New Mexico taxpayers,” Balderas said in the release. “Transparency and accountability should be the foundations of good government when it comes to managing New Mexico’s most precious resources.”
In a follow-up interview, Balderas would not reveal more about the information that led to the expanded audit, saying it would not be appropriate “to talk about specific details at this time.” He would not say whether a specific allegation has been made against the land office.
A spokeswoman for the land office did not immediately respond to a request for comment. She said in May, when the auditor began his work with a review of policies and procedures the land office follows in the sale, exchange and leasing of trust lands, that the office was “cooperating fully” with the audit.
Meanwhile, the House of Representatives passed today on a vote of 51-16 a bill that would require competitive bidding for the land office’s development contracts. The bill has been endorsed by the land office, according to a news release from House Democrats.
“This very important legislation will require that our state land office always gets the best value for our citizens when developing state lands,” said Rep. Jeff Steinborn, D-Las Cruces and the sponsor of House Bill 606. “Additionally, it will eliminate the possibility of insider development deals and provide more transparency into this process.”
The bill now heads to the Senate for consideration.
The history
Balderas’ special audit was requested in May by a handful of state representatives following a 2007 opinion by Attorney General Gary King finding fault with Land Commissioner Pat Lyons’ leasing of land on Las Cruces’ East Mesa to Philip Philippou for development.
The AG’s formal opinion on The Vistas at Presidio land deal states that the lease agreement’s method of compensating Philippou’s company is “not comprehended by and in conflict with” a statute that allows developers who improve land for the state to be compensated only for the appraised value of the improvements. In the lease, the land office also agrees to compensate Philippou for other project costs and 40 percent of the change in value of the land as a result of the improvements.
There are a number of leases for land in Las Cruces, Albuquerque, Rio Rancho and Santa Fe that contain similar provisions.
But the Philippou lease has been the most controversial. In that situation, Lyons bypassed his own bidding process — which he’s not currently required by law to use – to lease the thousands of acres to Philippou in December 2006. Months earlier, while the Republican Lyons was running for re-election, Philippou gave $20,500 to a political action committee run by lobbyists he employs. The PAC gave most of the cash to
Like the special audit, Steinborn’s bill came in response to the situation in Las Cruces. It’s one of several land office reform proposals that have been introduced by a trio of Las Cruces lawmakers this year.