BREAKING NEWS: ‘Smiley’ Gallegos resigns from housing authority

Region III Housing Authority Executive Director Vincent “Smiley” Gallegos has resigned, Gov. Bill Richardson announced Thursday.

He will be temporarily replaced by Mid-Region Council of Governments Executive Director Lawrence Rael while the authority’s board searches for a new director.

Gallegos resigned on Tuesday, Richardson’s office said in a news release, though it was not announced until late Thursday.

“We are taking action to stabilize the finances and practices of Region III and ensure that it continues to fulfill its mission of providing affordable housing for low-income New Mexicans,” Richardson said. “The regional authorities must operate transparently, and in the best interests of the people it serves.”

For all practical purposes, Gallegos was running the Region III authority in Albuquerque, the Region VII authority in Las Cruces and a couple of other non-profits related to the housing authorities.

Gallegos’ resignation comes days after a judge dismissed a lawsuit he filed against Region VII board member Frances Williams alleging defamation. Williams had alleged wrongdoing on the part of the housing authorities.

Perhaps most concerning is that Region III recently defaulted on some $5 million in bonds it owes the state. In addition, the authority in Las Cruces has done little about the housing problem while building up a debt of several hundred thousand dollars.

The governor’s office recently completed a 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 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.

At a Legislative Finance Committee meeting Tuesday in Santa Fe, the state investment council presented the preliminary findings of its own investigation, and the results weren’t pretty. A more detailed report should be out in about six weeks.

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

The resignation is a political defeat for Lujan, who had been fighting behind the scenes for Gallegos, sources tell me.