Hobbs mayor’s undisclosed conflicts erode public confidence

COMMENTARY: My friend and fellow City Hall watcher, Wanda Bell, wisely says, “If you don’t stand for something, you’ll fall for anything.” And not much gets by Wanda. In 2014, she saw through a scheme that amounted to a $600,000 bailout of the private, members-only Hobbs Country Club by the City of Hobbs. In explaining the ploy in a guest column to the Hobbs News-Sun, Wanda presented the many years of net losses shown on the country club’s tax returns, many of which also show that the mayor of Hobbs, Sam Cobb, has been a longtime board member of the country club.

The very next day, on March 3, 2014, City Commissioner Joseph Calderon defended the city’s actions and lashed out at Wanda by saying, “In the old days, we’d probably go do a duel, go to a fist fight … what she did to criticize us … and if she ever comes around, she and I are going to have a talk.” Listen to the audio.

Wanda sat in the front row as he said those menacing words from the rostrum. She has attended the majority of commission meetings since then. She not only stands for something, she stands her ground.

Wanda illuminated the mayor’s undeniable conflict of interest and his end run to appropriate hundreds of thousands of dollars for his beloved, exclusive social club in financial crisis. Wanda may have been the first to criticize the mayor for an obvious conflict, but she wasn’t the last.

State auditor: Mayor’s $60,000 loan to city manager an undisclosed conflict

Recently, the Office of the State Auditor admonished Mayor Cobb for being the registered agent and board member of a family business, Cobb Family Limited Partnership, which provided Hobbs City Manager John J. “J.J.” Murphy with a $60,000 loan. See the mortgage.

On its face, such a thing should not have happened. But since it did, the mayor was obligated to disclose his financial relationship, according to a Jan. 30 letter from the Auditor’s Office.

Addressing Mayor Cobb and Hobbs city commissioners, Deputy State Auditor Sanjay Bhakta wrote:

“The Mayor participated in employment matters involving Mr. Murphy while also serving as the Vice President and board member of a business holding a loan with Mr. Murphy. However, nothing in the Commission’s meeting minutes pertaining to the discussion and approval of Mr. Murphy’s compensation or other terms of employment indicate that the Mayor disclosed the Business’ interests with Mr. Murphy.”

Bhakta further wrote that, aside from Mayor Cobb’s duty to disclose his financial interest during public meetings on matters that pose a conflict, “City officials, including the Mayor and Commissioners, are required to file annual financial disclosures that include a listing of business interests.” Bhakta wrote that the Hobbs City Clerk said the city possessed no such records on file going back to 2013. “As such,” Bhakta wrote, “it does not appear that City officials are complying with the annual disclosure requirements provided for in the City’s Code of Ethics.” As of March 20, according to an email from the City Clerk, the City of Hobbs is still missing such disclosures.

Bhakta’s January letter impugning Mayor Cobb came just months after another letter affirmed my concerns that city contracts championed by Murphy “were handled in a manner that raises significant uncertainty as to whether the City received competitive prices … and raises the appearance that the contracts may not have been at arm’s length.”

An Associated Press article about Mayor Cobb’s loan to Murphy was picked up by media throughout the state, including the Albuquerque Journal, which gave the story the headline, “Auditors: Hobbs officials fail to follow ethics ordinance.”

The State Auditor’s letter to the city about the loan was the result of a complaint I filed in November. I obtained a copy of the mortgage in a separate investigation, and, recognizing the significance of the inherent conflict of interest, I handed over the mortgage and other supporting documents in a “short and sweet” tip to the Hobbs News-Sun’s publisher, editor and managing editor on Oct. 31:

“This would present a conflict of interest, right? If Mayor Cobb would like to have the loan repaid — not for more than $120,000, according to the mortgage — then wouldn’t he have a financial interest in seeing Murphy employed and well-compensated? Wouldn’t it even seem that he would have a financial interest in seeing Murphy receive a new contract that pays him as a consultant through mid-2018?”

The response I received, however, sent chills through me:

“I’m not sure Nick. It could, but it appears if the loan is unpaid then the house is foreclosed and the sale price will be used to pay Cobb back, so in that regard I think it wouldn’t matter if JJ stayed employed or not.”

It’s alarming that the News-Sun’s editorial staff so naturally explains away tips concerning the community’s most powerful officials. Is that the job of a newspaper or a public-relations agency?

When it became clear the News-Sun would not be covering the Cobb-Murphy mortgage, I decided I had to self-publish my own investigative piece on my transparency website, WeTheFourth.org.

In Hobbs, we can’t go to the newspaper with a tip and a prayer that reporters will root out truth fairly and objectively on behalf of the public’s interest. We have to go straight to state-level investigative offices to get an independent, third-party opinion.

The News-Sun’s leadership might be operating on the philosophy that the newspaper’s job is not to prosecute city officials, but its job should neither be to protect them. What the News-Sun’s leadership doesn’t understand is that reporting on credible tips alleging impropriety puts the concerns in the public record for the public to discuss, which, for many, would satisfy the desire for scrutiny and accountability of public bodies. But, because of the News-Sun’s refusal to scrutinize public officials’ questionable actions, I have had to go to the state auditor or attorney general to have questions answered, and doing so has resulted in more formal and more serious rebukes.

The kinds of things brought to light by one private citizen and then confirmed by the state officials should be a major wake-up call to Hobbs taxpayers. These things earned Mayor Cobb and Murphy the “honor” of being finalists for the 2016 Black Hole Award, a national recognition presented by the Society of Professional Journalists, which “highlight[s] the most heinous violations of the public’s right to know … to educate members of the public about their rights and call attention to those who would interfere with openness and transparency.”

Bhakta cautioned that, since “the Commission may not have acted with respect to recusals or disqualifications that may have been appropriate under the circumstances, there may be other areas of noncompliance.” There might very well be, and I have one possible conflict that has gone largely unnoticed, but has certainly gone undisclosed by Mayor Cobb and un-vetted by the commission.

Does high number of Hobbs police officers benefit mayor’s house-arrest monitoring business?

In late 2016, the City of Hobbs made an appearance in the New York Times, which provided the widest coverage to date of the months-long crisis in the state Law Offices of the Public Defender. In October, the Hobbs public defender’s office filed a notice of unavailability, citing inadequate resources to provide attorneys to represent adult defendants in magistrate-court criminal cases.

The Santa Fe New Mexican quoted Chief Public Defender Ben Baur that his decision to file the motion was “because of the high caseloads and the lack of staff to handle the increased caseloads in Hobbs right now.” The motion led to the public defender’s office being found in contempt for not providing lawyers for indigent defendants.

Leave it to someone on the outside looking in to see the contributing factors to the crisis in the Hobbs public defender’s office. “Mo’ money, mo’ problems” might be one way to summarize the root cause. Fernanda Santos, the New York Times’ Phoenix bureau chief, very deftly noted that, “during the flush times” of Hobbs’ oil-based economy, the City of Hobbs used its extra money to “hire new police officers, which has led to additional strain on the state-run courts.”

Instead of looking deeper into the issue brought to light by the New York Times story, the star-struck News-Sun simply reported, “The New York Times came to town recently.” Since the News-Sun either fails to or refuses to see how we got here, let me help.

As soon as Hobbs City Manager Murphy arrived in Hobbs, he began lobbying the city commission to allow him to implement his first big idea – to increase the police force “to at least 90 officers.” Since 2012, according to the résumé Murphy has recently submitted to a number of out-of-state communities, he far exceeded that number and “[i]ncreased police force by over 60% (62 to 107 sworn).” That is, in fact, more than 72 percent.

And thanks to Murphy’s big idea to hire so many more officers, the public defender’s crisis in Hobbs is not going away any time soon. It’s very plausible this crisis will last at least four more years. Over the course of two November 2016 commission meetings, the commission debated and ultimately chose to accept a grant award from the U.S. Justice Department Office of Community Oriented Policing Services (COPS) to hire more officers, with the stipulation that the Hobbs Police Department shall not reduce its force at least one year after the three-year grant period has ended.

In minutes of the Nov. 7 meeting, Murphy said that, as a result of accepting the $625,000 grant, which required a $751,165 match from the City of Hobbs, the police department “will not be able to reduce its number of positions below 108.”

Can a community have too many police officers? Hobbs, population 36,000, must budget for at least 108 officers on its force for four years. To compare, the number of certified officers in Clovis is, at most, 64, with a population of about 40,000; Las Cruces, 200, population 100,000; and Roswell, 94, population 50,000.

At the Nov. 7 meeting, several commissioners expressed concerns about the requirement to maintain the police force at 108 officers, particularly amid Hobbs’ economic downturn and the city’s diminished revenues. Layoffs might have to come from other departments, they worried, since the police force could not be cut. Commissioner Pat Taylor called the situation a “quagmire.” Former police chief and Commissioner Marshall Newman made the motion to table the acceptance of the grant, and the commission unanimously agreed.

At the subsequent Nov. 21 meeting, a majority of the commissioners relented to accept the grant, but the former police chief still could not reconcile “the hard time” he had with the related staffing mandates; he alone voted against it.

For all the concerns expressed, missing from the discussion at both November meetings was another disclosure by Mayor Sam Cobb of a potential conflict of interest. According to a business registration with the New Mexico Secretary of State, since 2015 Mayor Cobb has been affiliated with a business, Southwest Monitoring LLC, that furnishes and monitors court-mandated ankle bracelets for persons on house arrest. State records list Mayor Cobb as the “organizer” of the business, and one of his sons lists himself as Southwest Monitoring LLC’s operations manager. The registered address of Southwest Monitoring LLC is the same as that of RMS Foods Inc., of which Mayor Cobb is president, and the Cobb Family Limited Partnership, of which Mayor Cobb is an officer and board member.

If the mayor had erred on the side of disclosure, would that have affected any other commissioners’ votes? Is it important for the public to know that the mayor has a vested business interest in “law enforcement, the courts, and the probation/parole services?” With more cops on the streets, more arrests will be made for crimes both minor (the majority) and major. More arrests in a strained system almost certainly translates to increased imposition of house arrests. How convenient!

Could Southwest Monitoring LLC, and thereby Mayor Cobb, profit from the current crisis in Lea County’s courts, particularly the public defender’s office? The mayor has voted on the hiring – arguably over-hiring – of police officers, 25 of whom received a housing bonus of up to $50,000 since 2013, totaling about $890,000.

The question Hobbs taxpayers should be asking themselves is this: Why do we need so many officers on the street in a city our size? If the answer is “We don’t,” then Mr. Murphy and the mayor have some serious explaining to do.

Quoting from the City of Hobbs’ own Code of Ethics, Deputy Auditor Bhakta reminded Mayor Cobb and Hobbs commissioners in his Jan. 30 letter that even “an indirect interest may result in disqualification based on the majority vote of the Commission or through voluntary recusal.” Commissioners deserved the opportunity to decide whether the mayor’s dealings posed yet another conflict of interest in a matter pending before the commission, but the mayor chose not to disclose the interest.

So long as there are conflicts of interest – potential, perceived or proven – we need sunshine, lots of it. I would like to encourage my fellow citizens to resolve to support quality journalism that you trust, like NMPolitics.net.

And if where you are there is not a trustworthy press in your community to shine a light on government, then resolve to be the Fourth Estate your community needs. That is precisely why I created WeTheFourth.org. We deserve ethical leadership and transparent financial dealings in government. Until I’m convinced we have those elements in place in Hobbs, I will keep digging. I hope more citizens will take up this work as well.

Nick Maxwell is a technology consultant, writer, and analyst. Maxwell advocates for government transparency and operates the watchdog website wethefourth.org.