Heath Haussamen
Scarantino’s report has spread like a virus, but I can’t figure out what all the fuss is about
There’s been much ado this week following a report from a new Web site about the way Lt. Gov. Diane Denish spent federal stimulus funds she was given in 2003 by Gov. Bill Richardson.
I’ve been investigating the situation for two days and, frankly, I can’t figure out what all the fuss is about.
First the context: Jim Scarantino, on the site New Mexico Watchdog (which is a project of the libertarian Rio Grande Foundation), published an article on Wednesday about Denish’s spending of money appropriated to New Mexico under the Jobs and Growth Tax Relief Reconciliation Act of 2003.
From the article:
“Lt. Governor Diane Denish used $225,000 in federal funds to pay for a driver to shuttle her to meetings and press events, a contractor to take Christmas pictures and write Christmas cards, a lawyer to make hotel reservations, opinion polling and public relations services.”
The article made no allegations of wrongdoing, but it did raise a lot of questions. There was no indication that Scarantino made attempts to answer those questions – which would have been required before such an article would have been published by many journalistic organizations, including my own site.
For example, what did the poll say? Was it related to legitimate government services, or did it have to do with political topics that might have made it an inappropriate way to spend taxpayer money?
The GOP pounces
Unfortunately, there was no way to tell from the report what the poll was about. Republicans seized on the less-than-complete article about the spending by the Democrats’ likely 2010 gubernatorial nominee, and the story grew into a scandal and spread like a virus.
“Today’s news concerning Diane Denish is deeply disturbing and raises serious questions that must be answered,” GOP gubernatorial candidate Susana Martinez said in a news release.
“A full federal audit needs to be done to find out whether Lt. Governor Denish has misused federal tax dollars for personal and campaign purposes,” former U.S. Rep. Heather Wilson wrote in an e-mail to reporters.
“The questionable manner in which Ms. Denish has spent federal taxpayer dollars is not surprising given the spending habits of the Richardson-Denish administration,” state GOP Chairman Harvey Yates Jr. said in a release.
The worst came from Republican Gubernatorial candidate Allen Weh, who put out a news release and held a news conference to announce that he’d asked the U.S. and state attorneys general and the state auditor to look into the situation.
“On the surface, it looks like tax dollars were spent to help her in her campaigning, and that’s why today’s report is so serious,” Weh said in the release. “When I entered this race for governor, I pledged that the first thing I’d do when elected is root out corruption in Santa Fe, but it looks like I’m going to start early.”
Asked at the news conference if he’d read the 2003 act, Weh said he had not. Asked by me what specific questions needed to be looked into, Weh spokesman Christopher Sanchez said, “Clearly, Scarantino’s report raises many questions that need to be looked into.”
I asked Sanchez again what questions needed to be looked into, since he didn’t answer the first time. He had no response. I also asked the state GOP and Martinez what questions needed to be answered and got no response.
Here’s what I know
Disappointingly, in spite of the fact that Weh and others had provided no substance to back up their allegations, many in the media were happy to oblige attempts to turn Scarantino’s report into a scandal.
Two Albuquerque TV stations ran with reports. So did the Albuquerque Journal and Santa Fe New Mexican. As far as I can tell, none did the digging to find out whether there is actually a story to report here in the first place. I guess they judged that Weh holding a news conference was cause in and of itself to cover the situation.
Well, I’ve spent a couple of days digging into this situation. I’ve obtained the documents in question (so did the Journal and New Mexican), along with a bunch of other related documents Scarantino apparently never looked at. I’ve conversed with Wilson about the situation. I’ve obtained a number of statements. Here’s what I know:
The 2003 act appropriated funds to states to be used for two purposes: “essential government services” and to comply with federal mandates. The U.S. Government Accountability Office states on its Web site that the funds were “generally… unrestricted in nature.”
Wilson suggested otherwise. She wrote in an e-mail that federal funds generally have to be used for “a bona fide public purpose.” Pointing to the above-referenced provisions in the act, she said regulations were “probably” promulgated that were more specific about how the money must be spent.
I could find no such regulations. But I did learn that the GAO looked into — for Congress — how the funds were spent in a number of states, including New Mexico. That office wasn’t looking for wrongdoing, but was simply surveying how the cash was spent.
The GAO’s report indicates a lack of restrictions placed on how the money was to be spent.
“Some officials indicated that they dedicated funds for a specific purpose, while others told us that they have used the funds as general revenue,” the report states.
There was even a dispute in New Mexico about whether the governor had to gain legislative approval before spending the money. The GAO report made Congress aware of that.
Basically, a report written by two Legislative Council Service staffers stated that the governor had to gain legislative approval before he could spend at least some of the money. The situation was discussed at a July 2003 meeting of the Legislative Finance Committee. Ultimately, lawmakers, as they’ve done so often in the last few years, decided against challenging the governor’s insistence on spending the money how he pleased.
This statement is included in that LCS report:
“In the instance of the temporary fiscal relief funds, Congress has not made the policy choice of how these temporary funds are to be allocated. It has only required that such funds be utilized for ‘essential government services’, or to cover co-called unfunded federal mandates, so long as the expenditure of these temporary funds are limited to the ‘types of expenditures permitted under the most recently approved budget for the state.’”
So what are “essential government services?” Well, in the minds of the LCS staffers, there are “a host” of them, and the feds placed “no specific requirements” on what they were.
The governor certified in a letter to the feds in 2003 that the money would be spent according to the two requirements from the act. And, with that, he gave some of the money to Denish, who spent much of it on a poll related to children’s issues in New Mexico – one of the primary focuses of Denish’s work as lieutenant governor – and hiring contractors to do public relations and media work and shuttle her around.
Scarantino: ‘I hope my work serves as a resource’
So the bottom line is this: I’ve spent the better part of the last two days digging into this and doing work I personally think Scarantino should have done before publishing his story. And I’ve found that only Wilson, among the Republicans who were quick to complain about Denish’s spending, had any wise words to back up her complaint.
Even then, none of the reporting I’ve done has turned up anything to back up Wilson’s claim – and some of it suggests she’s wrong.
Scarantino, for his part, sounds pleased with how this has turned out.
“Please understand my role as New Mexico Watchdog,” he wrote in an e-mail. “Most of what I will do is dig through voluminous records and report on what’s there, something that too few people have the time or wherewithal to do. I then report on what is in the records.”
“I hope my work serves as a resource to enable professional and citizen journalists to dig deeper, which seems to be the case in this matter,” he wrote.
One final point
There’s one point that still raises my eyebrows: An invoice Scarantino reviewed has one contractor billing Denish’s office for “work on Christmas card.” What that work was isn’t clear, and I couldn’t get an answer out of Denish Chief of Staff Joshua Rosen that satisfied me.
“The invoice (the contractor) submitted made reference to work on a Christmas card. Based on staff recollection, that work had to do with the Holiday Open House,” he wrote in an e-mail. “… This was quite a few years back. Based on staff recollection, that staffer was primarily focused at the time on a 2004 Holiday Open House that the Office of the Lt. Governor held for members of the public, including homeless children from La Comunidad De Los Ninos in Santa Fe, not a personal or political event for the Lt. Governor, herself. The 2004 holiday card was primarily handled and paid for by the Denish campaign, not the state office.”
Rosen also provided an invoice that shows most expenses related to the 2004 Christmas card were paid for by the campaign.
Though I’m not certain at all, I think it’s still possible there was a little mixing here, with a very small amount of public money. But my question, then, is this: If Republicans want to complain about the possibility that a Denish staffer might have been paid with public money for a few hours of work related to a Christmas card, do they also have a problem with the calendar hanging above my desk and paid for by taxpayers that former U.S. Sen. Pete Domenici, R-N.M., mailed me (also with taxpayer money) last year just before he retired?
I’m not saying it’s OK to abuse taxpayer money, even in very small amounts. I’m saying that, if the possibility that Denish spent a small amount of the stimulus money on a Christmas card is the worst we’re looking at here, it’s not even clear that such an expense would be inappropriate.
An investigation by the U.S. attorney general? Come on. There are much more important issues to be discussing.
A prior version of this posting incorrectly attributed the Legislative Council Service report to Legislative Finance Committee staffers.