Flawed NM campaign reporting system needs reform, many say

Update, April 22, 2016: This article has won a first-place prize for political reporting in the multi-state 2015 Top of the Rockies contest. Learn more.

Former state Rep. Brian Moore recalls a colleague once telling him that he was going to “borrow” the remaining money in his campaign account when he retired from the Legislature.

And never pay it back.

That’s illegal in New Mexico. Moore wouldn’t name the former lawmaker, who is now dead, and said he doesn’t know if he actually took the money when he left office. Moore called the colleague a friend and mentor who, “in all other respects, may have been one of the most honorable men I’ve known.”

Moore, a Republican from Clayton, said he shared the story with NMPolitics.net as “another example of crazy practices” related to campaign finance reporting that have recently come to light.

The most prominent example of recent problems that have eroded confidence in our state’s campaign reporting system, of course, is the criminal case against the very official who is charged with enforcing campaign finance law. That’s Secretary of State Dianna Duran, who is facing charges including fraud, embezzlement, money laundering and identity theft for allegedly using campaign funds to keep her personal bank account in the black.

Many other possible violations of campaign law have recently come to light. For example:

• Rep. Antonio “Moe” Maestas, D-Albuquerque, failed to report more than $11,000 in contributions in 2014. State law requires the disclosure of all contributions. Duran has asked the attorney general to investigate.
• Rep. James Roger Madalena, D-Jemez Pueblo, spent campaign money to help pay for a surgery, buy clothes, and aid a “needy family” in his district. That’s all illegal. After at first saying he hadn’t read the Campaign Reporting Act and didn’t know better, Madalena, who co-sponsored the legislation in 1993 that created the law, said he had “of course” read it. And he gave no explanation for violating it.
• The numbers in finance reports filed by Rep. Andy Nuñez, R-Hatch, don’t add up.
• Former Rep. Henry “Kiki” Saavedra, D-Albuquerque, appears to have given his son, who ran unsuccessfully to replace him in the House, a bigger contribution than state law allows.

There are other examples. Some of the alleged violations are worse than others, but they all further taint a state government that has been plagued by scandals in the past decade that include the felony convictions of two state treasurers and a New Mexico Senate president.

Among the current scandals, the allegations against Duran are especially concerning.

“Her actions make it harder for us to trust government as a whole,” Barbara Alvarez of Las Cruces wrote during a Facebook discussion. “… This is going to hurt us as a state for a long time, whether she’s found guilty or not.”

New Mexico isn’t alone in grappling with such problems. Earlier this year the former speaker of the Rhode Island House of Representatives went to prison for, among other things, filing false campaign reports and stealing $109,000 from his campaign account.

In response, policymakers in Rhode Island enacted reforms that include requiring candidates to file campaign bank statements with that state’s elections board so they can be compared with finance reports.

Many say New Mexico also needs reform.

In full view of the public

New Mexico has taken significant steps toward improving campaign transparency in recent years. Reports of fundraising and spending filed by candidates, lobbyists and PACs are available to the public online in a searchable database.

That means many of the problems revealed recently were essentially sitting out in the open.

Even in Duran’s case, some evidence of the alleged crimes was available for the public to discover, had anyone looked. Lobbyists and PACs reported contributions to Duran as far back as 2010 that her campaign never reported receiving.

“We have made some progress. There have been some wins in the last 10 years or we wouldn’t be able to see this stuff,” said Viki Harrison, executive director of Common Cause New Mexico.

Perhaps no one found the discrepancies until now in part because we have fewer journalists covering politics and government these days. Perhaps, in cases like Madalena’s, problems remained undiscovered until now because he’s in a safe seat, and uncontested races tend to be less-scrutinized.

Perhaps it’s because there’s not enough accountability within government. State law requires the secretary of state to audit 10 percent of reports. That’s a higher percentage than is required in many other states, Harrison said. But she doesn’t think it’s enough.

There’s a lack of transparency surrounding audits of campaign reports in New Mexico, Harrison said. We don’t really know whether audits are thorough. And violators who’ve been discovered have usually gone unpunished during Duran’s tenure.

Maybe an acceptance of shenanigans has led to people openly and sometimes even brazenly breaking the law. Recalling the lawmaker who said he planned to keep leftover campaign funds when he retired, Moore said the revelation came as the two were discussing the official legislative retirement system.

The legislator “just volunteered the information” about the other way he planned to profit when he quit, Moore said.

Moore, who served in the House from 2001-2008 and ran unsuccessfully for lieutenant governor in 2010, has experience with the campaign reporting system as a candidate — who worked as his own campaign treasurer — and as a donor.

In fact, Moore’s name popped up Friday in a new court filing in the Duran case. The AG’s Office says Duran deposited a check from Moore and his wife Linda into her personal account in August 2010. The $500 check had “Secretary of State!” written on the memo line, the court filing states. Duran has not been charged with any crime related to the check from the Moores.

Brian Moore told NMPolitics.net that check was intended “as a campaign donation,” as was a $1,000 donation he made to Duran in September 2010. Both contributions showed up on Duran’s 2010 finance reports (here and here) even though one allegedly ended up in her personal account instead.

Moore said little about the allegations against Duran. In general, he contends that many problems coming to light now are “unintentional mistakes.” He recalled how difficult it was to keep up with finances when he served as his own campaign treasurer. He also mentioned past problems with the secretary of state’s reporting system — the software was difficult to use and mistakes weren’t easy to correct.

But, especially if the allegations against Duran are true, not all problems are mistakes.

Ideas for reform

With such problems now exposed, the drum beat for reform is growing louder. Some have called for an audit of all campaign finance reports in New Mexico. Most states require random audits of somewhere between 2 and 10 percent of reports, Harrison said. Maryland audits every report, while Nebraska audits none.

Attorney General Hector Balderas, whose office is prosecuting Duran, recently called for mandatory fines for violations of the Campaign Reporting Act. Earlier this year, the Farmington Daily Times reported that Duran had waived almost a third of the fines her office had issued during the 2012 and 2014 elections. Duran had failed to collect almost all the remaining two-thirds of fines.

The secretary of state should hold regular candidate trainings on compliance with campaign reporting law, Balderas said. And he proposed creation of a system that would notify campaigns about late reports and other developments.

Perhaps candidates should be required to hire certified public accountants to be campaign treasurers, Claudia Anderson of Farmington wrote in a discussion on Facebook.

“It seems everyone asks their best friend, the one who knows how to balance their checkbook. It’s far more complicated than that,” Anderson wrote.

Gov. Susana Martinez has called for more frequent campaign reporting and requiring the secretary of state to post its audits of finance reports online. Harrison agreed that posting audits of reports online is critical.

New Mexico also needs a state law or regulation that dictates how audits of finance reports are to be conducted so the rules are the same regardless of who is elected secretary of state, Harrison said. In the past it’s been difficult to learn about the processes various secretaries of state have followed.

“To me the whole auditing process has got to come out into the public,” Harrison said. “We have to be able to know what happens with that process.”

Harrison also wants upgrades to the state’s campaign reporting system to allow automatic comparisons of contributions made by PACs and lobbyists with those candidates report receiving. And she wants the information the secretary of state collects on campaign donations and spending made available to the public in a more accessible and downloadable format, so it can be easily sorted and compared.

Martinez controls the agenda for the upcoming 30-day session of the Legislature, which begins Jan. 19. Her staff hasn’t yet responded to an email asking whether she will allow consideration of legislation that would reform the state’s campaign reporting system.

Approving reform could be difficult. Any increased transparency that makes information about incumbents “easier to get and expose” makes it more difficult for incumbents to get re-elected, Moore said. That means lawmakers from both parties might have a political incentive to not improve the system.

“Part of the problem is the lack of campaign reporting transparency helps incumbents,” Moore said.