Interim committee vote puts pressure on House Speaker Lujan to remove council appointee

Region III Housing Authority Director Vincent “Smiley” Gallegos is again under fire, and this time there’s pressure for Speaker of the House Ben Lujan to take action.

Gallegos has been embroiled in controversy related to his management of the Las Cruces-based Region VII Housing Authority and the Region III authority in Albuquerque. Perhaps most concerning is that Region III recently defaulted on a $2.5 million bond payment it owed the state.

That probably came in part because Region III has loaned Region VII some $700,000 that the Las Cruces authority has been unable to repay.

The missed bond payment prompted the interim Legislative Mortgage Finance Authority Act Oversight Committee to take action last week.

Gallegos serves on an advisory council to the finance authority. That council is composed of nine members, three appointed each by the governor, speaker of the House and pro-temp of the Senate.

Lujan appointed Gallegos to the council.

Sen. Leonard “Lee” Rawson, R-Las Cruces, proposed that the committee ask Lujan to remove Gallegos from the council. The bipartisan legislative committee voted unanimously to write a letter to Lujan making that request.

The committee includes House Democrats Fred Luna, who serves as chair; Harriet Ruiz, Bobby Gonzales, and Dan Silva, according to the committee’s Web site.

“We know that he’s having financial difficulties,” Rawson said Tuesday of Gallegos. “Therefore, we probably need to have another member serve until he gets his finances together. … It’s not a partisan issue. It’s a good government issue.”

The governor’s office completed last week its review of the state housing authorities, and said problems will make it difficult if not impossible for them to survive. The review cited operational troubles and financial losses at the authority based in Albuquerque, mismanagement and disarray at the authority based in Las Cruces, and questions about operations of a related non-profit that does much of the construction for the authorities, Housing Enterprises, Inc.

The review recommended the creation of an agency to oversee the authorities.

The authority in Las Cruces has done little about the housing problem while building up massive debt, and infighting has led to Gallegos suing one of the Las Cruces board members, Frances Williams, for slander. The lawsuit is pending.

In addition to the governor’s review, the State Investment Council is reviewing the situation, and the attorney general’s office is investigating allegations of fraud and other issues related to Housing Enterprises.

The authorities are quasi state agencies. They are supposed to be funded by bonds that are repaid with profits from home sales, so no tax dollars are used. The governor appoints housing authority board members.

Gallegos, a former state legislator, makes more than $158,000 per year from the housing authority corporations. He is also a registered lobbyist in New Mexico who, sources tell me, spends a lot of time in Lujan’s office during legislative sessions.

And that’s where this gets most interesting.

Remember that there are a group of House Democrats fed up with Lujan’s leadership. Upset that he slipped a $75 million appropriation into this year’s capital outlay bill without their knowledge, they want to remove Lujan as House speaker.

The governor was also upset and vetoed the appropriation.

Those who want to unseat Lujan will be watching to see how he responds to the committee’s letter. If he doesn’t take Gallegos off the council, he risks associating himself further with a man plagued by scandal at a time when the public is fed up with political corruption.

Rep. Dan Foley, R-Roswell and a member of the legislative committee that is requesting Gallegos’ removal, said Lujan needs to act.

“Both Republicans and Democrats in the legislature are seeing the need for those involved in the public corruption scheme to be removed,” he said.