Officials who have pushed for reform of the affordable housing system praise AG for bringing public corruption case forward
“It’s about time,” were the words uttered by state Rep. Janice Arnold-Jones earlier today when told that four men had been indicted in the drawn-out investigation into the misuse of bond money in the state’s affordable housing system.
Arnold-Jones, an Albuquerque Republican, and Sen. Mary Kay Papen, D-Las Cruces, are among those who have previously expressed fear that political considerations could lead to the case being buried. Arnold-Jones said today’s indictments are a “glimmer of hope” that the law can win out over politics.
“In order to make your laws mean something and in order for government or individuals to be accountable, they have to be held accountable by the authorities whose job it is to hold them accountable. This is the first step in that direction,” Arnold-Jones said.
An indictment is only the first step in the formal process of government prosecutors attempting to convict those they accuse of crimes. In this case, the indictments of former legislator and Region III Housing Authority Director Vincent “Smiley” Gallegos and three others were three years in the making. The scandal first captured headlines in 2006 when the Albuquerque-based Region III 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 affordable housing.
Gallegos has been a close ally of House Speaker Ben Lujan and, as a lobbyist, spent a lot of time in the speaker’s office during legislative sessions before the scandal broke in 2006. Their relationship — and alleged attempts by Lujan and his allies to kill reform of the housing authority system during the 2007 legislative session — were the basis for the fear expressed by many that the investigation might never lead to indictments.
Attorney General Gary King never publicly addressed such fear, as it’s his office’s policy to not comment on pending investigations. Even after the probe moved past the “pending” stage today, his office refused to comment beyond providing the names of those who were indicted.
‘It’s a good day for New Mexico’
But today’s action goes a long way toward putting such fear to rest, said Frances Williams, a former board member of the Las Cruces-based Region VII authority and the whistleblower who first exposed the problems that led to the collapse of much of the housing authority system three years ago.
“I am elated that the attorney general has gotten an indictment against Vincent ‘Smiley’ Gallegos, and I want to thank him and his staff for their hard work,” Williams said, adding that “true justice will only be served if Gallegos is convicted.”
Papen said in an interview that she is also pleased.
“It’s a good day for New Mexico,” she said. “…I’m happy, and I really want to thank the attorney general. I’ve been really hard on him about getting this done.”
Lt. Gov. Diane Denish said in an interview that she believes the indictments “are the result of a very long and thorough investigation by the AG.”
“This is absolutely unacceptable, this kind of behavior with public money,” Denish said. “New Mexicans deserve better.”
State Auditor Hector Balderas, whose recent audits of the housing authority system led to his office’s aiding the AG’s case, said in a prepared statement that he “strongly believed” following the release of his audits, “as I do now, that there was evidence of gross mismanagement. We have since fully cooperated with the Attorney General’s Office in their investigation of this serious matter and trust that the justice system will handle the matter appropriately.”
What about Lujan?
Williams said she won’t be entirely satisfied even if Gallegos and the others who were indicted today are convicted. She called it a “shame” that Lujan, “who vehemently defended Mr. Gallegos as being a decent and honorable man who had done nothing wrong,” is still the powerful House speaker and “has the support of elected officials who are in his hip pocket.”
Lujan could not immediately be reached for comment.
Even before today’s indictments, some action had been taken 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 sued Gallegos and Albuquerque bond attorney Robert Strumor in an attempt to recover public money that was lost when Region III defaulted on the bonds. That lawsuit is pending.
Gallegos, Strumor and former Region III accountant Dennis M. Kennedy are facing felony charges including fraud and money laundering. The fourth defendant, former Region III employee David N. Hernandez, is charged with tampering with evidence.
A man who answered Strumor’s phone said Strumor was not available for comment. Attorneys for Gallegos and Kennedy could not be reached for comment.
Ryan Villa, an attorney for Hernandez, said his client is “totally innocent.”
“We’re eager for our day in court where we can show that,” he said. “I think this is a very politically driven case, and he’s caught up in the fray. I don’t think he did anything criminal.”
Strumor also politically connected
Gallegos isn’t the only defendant in the case with political ties. Strumor, a well-known bond attorney who has done work for government agencies in New Mexico, has given a number of campaign contributions over the years, mostly to Democrats.
For example, Strumor and his law firm have given $4,000 over the last several years to Denish, and in 2006 gave $2,060 to Gov. Bill Richardson and $1,000 to Secretary of State Mary Herrera.
Strumor and his firm also contributed to some now-disgraced politicians, including $2,550 former Senate President Manny Aragon, $10,000 to former state Treasurer Robert Vigil and $1,600 to former Treasurer Michael Montoya. All three are serving time in federal prison after being convicted of felony crimes in public corruption cases.