Once accused of trying to kill an overhaul of the state’s housing authority system, Lujan is now shepherding it through the House
In 2007, Lt. Gov. Diane Denish and Sen. Mary Kay Papen accused House Speaker Ben Lujan of trying to torpedo their attempt to reform the state’s affordable housing system.
But this year, he’s shepherding their housing authority reform bill through the House for them. The move, announced Monday, indicates a great deal of consensus behind Papen’s Senate Bill 20, which unanimously passed the Senate this weekend. With Lujan’s backing, the bill is likely to sail through the House. The governor has endorsed it.
That’s quite a contrast to the battle that occurred in 2007, when there was widespread belief in Santa Fe that Lujan was trying to kill another Papen housing reform bill — one that was approved only after a great deal of political maneuvering and significant compromise. Most of the housing authority system had collapsed the year before in a scandal centered on a former legislator who has been a close ally of Lujan.
The speaker has maintained that he never opposed an overhaul of the housing authority system. Regardless, reform backers believe his support for this year’s bill is critical to avoiding a contentious battle like the one fought in 2007. Without naming Lujan or anyone else, Papen, a Las Cruces Democrat, said a number of House members who were hesitant about reform in 2007 “are now very willing to support it,” in part because reports recently released by the state auditor leave little doubt that widespread problems led to the collapse of the housing authority system.
Denish said she is “delighted that Speaker Lujan will be the House sponsor,” and commended Papen “for working to move the bill along.”
“This bill has strong bipartisan support, and I am confident it will move quickly in the House,” she said.
‘Look at my record’
Lujan said Tuesday that he “never stood against” reform of the housing authorities, and said he was asked to carry Papen’s bill in the House this year.
“I said that if the bill gets through the committees, I’d be happy to sponsor it,” Lujan continued. “I’ve always been a proponent for low-income affordable housing. Look at my record.”
The legislation should clear the House without any trouble, Lujan said.
Some of the reforms in Papen’s bill include consolidating the seven regional authorities into three, designating an oversight agency to oversee regional operations, strengthening conflict-of-interest language, permanently eliminating the authorities’ ability to issue bonds and requiring that transactions of over $100,000 be reviewed and approved by the mortgage finance authority.
That builds on the 2007 reforms, which included temporarily stripping the housing authorities’ bonding authority and giving the Department of Finance and Administration and state treasurer roles in administering the agencies’ finances. The bill approved that year also funded the audits that the state auditor recently completed.
Lujan ally at center of housing scandal
Most of the housing authority system collapsed in 2006 when the Albuquerque-based Region III Housing Authority defaulted on $5 million in bonds it owed the state. Soon thereafter, the State Investment Council released a report that found widespread misuse of the bond money, which was supposed to be spent on houses. In January, the state auditor released his office’s long-awaited reports.
Attorney General Gary King is preparing to take his criminal investigation before a grand jury.
At the center of the housing authority scandal is Vincent “Smiley” Gallegos, a former legislator from Clovis and a Lujan ally who ran Region III. Also a lobbyist, Gallegos has spent a lot of time in Lujan’s office during many legislative sessions.
During the 2007 session, Lujan’s relationship with Gallegos was under scrutiny because it had recently been revealed that a top aide to Lujan — who earned more than $71,000 per year — was living, rent-free, in a home owned by Region III that was supposed to benefit someone who qualified for low-income housing.
The 2007 reform bill
There were two, identical housing authority reform bills that year — one sponsored by Papen and the other sponsored by Rep. Janice Arnold-Jones, R-Albuquerque — and Lujan assigned them to different House committees. After one committee shelved Arnold-Jones’ bill, Lujan took the unusual step of moving Papen’s bill to the same committee.
Then-Denish spokesman Michael Henningsen said at the time that it appeared Lujan intended to kill Papen’s bill.
“The overall impression we’re getting is that this bill is following in the footsteps of Rep. Arnold-Jones’ bill,” he said.
Papen also said at the time that she believed Lujan was trying to kill her bill.
Lujan, a Nambé Democrat, insisted that wasn’t the case. But the committee that had killed the Arnold-Jones bill was stacked with Lujan allies, and it was only after a coalition of Republicans and a handful of Democrats threatened to bypass the committee and move the bill directly to the House floor for a vote that a compromise was reached.
Following that compromise, Lujan publicly thanked Papen “for addressing this issue.”
“We can now go back to our communities and hopefully be able to provide some affordable housing,” he said at the time. “… I congratulate you for all the hard work you’ve done here.”
The New Mexico Independent’s Trip Jennings contributed to this report.