Whistleblower says Democratic Party chairman’s dual roles create ‘the perception of conflict of interest;’ Colón says there is no conflict
The chairman of the Democratic Party of New Mexico traveled to Las Cruces on May 14, 2008 to pick up documents left behind when the Region VII Housing Authority shut down in August 2006.
But Brian Colón wasn’t acting in his role as party chair. Colón is an attorney, and his law firm is suing two defendants on behalf of the State Investment Council (SIC) to try to recover money lost when the Albuquerque-based Region III Housing Authority defaulted in 2006 on $5 million in bonds it owed the state.
With a subpoena in hand, Colón met with Edgar Lopez, who had been Region VII’s landlord, filled his car with boxes of government records and headed north on Interstate 25.
Colón confirmed in an interview that his work on the case includes investigation, research and communicating with the SIC on behalf of his law firm, Robles, Rael & Anaya. And he confirmed that he picked up the Region VII documents in 2008 as part of his investigation.
The housing authority scandal centers on some well-connected Democrats. Four men were recently indicted, including a close ally of House Speaker Ben Lujan and a bond attorney who has been a donor to the campaigns of the governor, lieutenant governor and secretary of state.
Because of that, Frances Williams, a former Region VII board member and the whistleblower who first exposed the problems with the housing authorities more than three years ago, says Colón’s involvement in the lawsuit is inappropriate.
“Even if he didn’t do anything wrong, it has the perception of conflict of interest, that there is something wrong,” Williams said. “… This stuff with Brian Colón, it goes to the heart of ethics and how we deal with government and the problems we have.”
Colón says two roles are ‘consistent’
Colón, who is expected to announce his resignation from the party’s chairmanship today so he can run for lieutenant governor, said in an interview that there is no conflict between his position as head of the state Democratic Party and his role in the lawsuit.
“Being a zealous advocate for the State Investment Council and its desire to protect taxpayer’s funds is consistent to me with the Democratic Party’s desire to protect taxpayers,” Colón said when asked if he believes there’s a conflict.
The SIC’s public information officer, Charles Wollmann, said Robles, Rael & Anaya was selected for the job following a competitive bidding process. Three companies bid, but one opted out because it also worked with a bank that had been involved in housing authority business. That left two firms vying for the job.
“We went with what we perceived to be the firm with more firepower. They had more resources,” Wollmann said.
Other conflict-of-interest scandals
The housing authority case has been colored by a number of conflict-of-interest scandals:
• The man at the center of the controversy, former Region III Director Vincent “Smiley” Gallegos, convinced the board of a nonprofit tied to Region III to loan one of his personal companies $300,000 under the guise of purchasing land in Las Cruces that the authority already owned. That loan is the basis for some of the criminal charges against Gallegos, who is one of the four men under indictment.
• Three tenants of homes owned by Region III have been booted because they didn’t qualify for affordable housing. Two were Region III employees and one was a board member.
• A metro court judge in Albuquerque was suspended without pay for two weeks because she was living rent-free in a Region III home — though she was making $93,000 a year at the time — and had dismissed traffic tickets and an arrest warrant for Gallegos while she was living in the home.
• One of Lujan’s top aides was living live rent-free in a home owned by Region III even though she was earning more than $71,000 a year. Gallegos, a former House member from Clovis, became a lobbyist after leaving the Legislature in 1996, and he spent a lot of time in Lujan’s office — where the aide worked — during legislative sessions.
For years, Williams has cited those situations as evidence that cronyism pervades state government. She said when she first learned of Colón’s involvement in the SIC’s lawsuit she complained to the SIC, to Luis Robles, who is heading up the law firm’s team on the case, and to Colón himself.
“I said (to Colón), even if you don’t do anything wrong there’s the perception of wrongdoing,” Williams said.
Ultimately, she said, her concern fell on deaf ears.