Attorney General Gary King will take his investigation into the housing authority scandal before a grand jury Friday with the intent of securing indictments, a source with knowledge of the situation confirmed.
The source provided no other details about how long the grand jury will meet or who might be targeted by the AG. King’s office did not immediately respond to a request for comment, but usually refuses to comment on or even acknowledge grand jury proceedings, which are secret.
It’s the second time King has scheduled a grand jury in the drawn-out investigation of the scandal in the state’s affordable housing system. After subpoenaing multiple witnesses to appear before a grand jury in February, King called it off. His office, which never confirmed that grand jury in the first place, would not say why it was delayed.
At the time, one state lawmaker who has played a prominent role in reforming the housing authority system, Sen. Mary Kay Papen, D-Las Cruces, said she feared King was not treating the investigation as a priority. She’s one of many who has publicly questioned whether the case would ever lead to criminal charges.
The scandal first 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 Papen and others have said they are hoping someone will be held criminally liable for what happened.
The housing authority case is one of three public corruption probes by the AG that is known publicly. His office recently indicted Public Regulation Commissioner Jerome Block Jr. and his father on charges related to abuse of the state’s public financing system. King’s office is also investigating the spending of voter education funds under former Secretary of State Rebecca Vigil-Giron.
This article has been updated for clarity.