State suspends two Sunland Park officials

Following the release of an eagerly awaited special audit, the state suspended two city officials today and assumed control of their duties; meanwhile, the city council opted once again to postpone the appointment of a new mayor.

The state Department of Finance is suspending the finance director and purchasing agent in Sunland Park, assuming control of those employees’ duties and taking control of the disbursement of city funds.

The action – believed to be the first time in state history that DFA has suspended local-government officials – followed the release of an eagerly awaited special audit that identified statutory, regulatory and criminal violations.

“We have met numerous times with the state auditor and his team and we will continue to work together to methodically and diligently ensure the proper expenditure of taxpayer dollars in Sunland Park,” Gov. Susana Martinez said in announcing the suspensions. “The extraordinary level of financial mismanagement in Sunland Park is unacceptable; protecting public funds will be our highest priority.”

Meanwhile, the Sunland Park City Council had been scheduled to appoint a new mayor tonight – an action that would not be affected by DFA’s decision. But, during the course of the chaotic day, the city briefly cancelled the meeting, then held it anyway, then decided at the meeting to postpone its decision until Friday at 6 p.m.

DFA suspended Finance Director Helen Gonzalez and Purchasing Agent Neryza Rivera. Each will receive a hearing within five days unless they request additional time. The city might also have suspended several other officials, including the former mayor, two city managers and the city clerk, but they’re no longer in those positions so they’re not subject to suspension.

Details of the audit

Many of the violations identified in the audit, which you can read here, weren’t surprising because they’re allegations that have already been made public as part of the criminal cases against numerous city officials. A summary of the more serious violations from the audit, from a news release sent out by the State Auditor’s Office:

• “The special audit confirmed the fraudulent misappropriation of public funds from the City’s Border Crossing Fund by former Mayor Pro-Tem Daniel Salinas. The audit’s findings show the City expended $42,161.35 from the restricted Border Crossing Fund as a result of fraudulent invoices submitted by EnviroSystemsManagement Consultants, Inc. (EMC) and the Diaz Consulting Firm. The money was used to pay for prostitutes for Salinas and the City’s former Public Information Officer, Arturo Alba, during a trip to Mexico. Additionally, the funds were used to pay the costs of a campaign video for Salinas. It was also used to pay a private investigator who filmed a video used to extort Salinas’ opponent in the Mayoral election;
• “The City violated the Procurement Code by hiring Frank Coppler as City Attorney without following a competitive sealed bid process. The City has paid Coppler $481,378 in legal fees;
• “The City violated competitive sealed bid requirements of the Procurement Code in its award of a $2,400,000 contract to EMC. The money used was from the Border Crossing Fund;
• “The City violated state law in fiscal year 2010 by exceeding its approved budgeted expenditures for the Joint Utility Fund in the amount of $769,882;
• “Former City Manager Aguilera and former Mayor Pro-Tem Salinas were responsible for reducing customers’ utility billings and accounts in violation of the state law and the New Mexico Constitution. One bill was reduced from $767.00 to $195.80. Auditors found no evidence that the City Manager reduced the bills based on criteria approved by the City Council; and
• “In July 2010, the City Council also forgave approximately $200,000 in utility bills for residential customers in violation of the Anti-Donation Clause and state law.”

Mayor pro tem expedited release of audit

State Auditor Hector Balderas and auditors conducted an exit conference this afternoon to discuss the situation with city officials.  Balderas commended the current mayor pro tem, Isabel Santos, for “helping expedite the public release of the special audit.” By law, the city is entitled to see and respond to the audit before it becomes public.

“I appreciate the mayor pro tem’s commitment to transparency,” Balderas said. “Embracing the special audit’s recommendations is a positive step forward in improving the city’s financial situation.”

Balderas also referred the audit to state and federal criminal investigators and other agencies.