The State Investment Council has released its final, damning report on the operations of the state’s regional housing authorities.
The report reveals widespread misuse of $5 million in bonds sold to the state, including almost $900,000 that went to former Region III Housing Authority Director Vincent “Smiley” Gallegos as salary, benefits and a loan. You can read the entire report by clicking here.
The state’s housing authorities have been plagued by scandal in recent months that has ultimately resulted in the closing of housing authorities in
Perhaps the most intriguing misuse of money revealed in the investment council report was a $300,000 loan the housing authority made to a private company owned by Gallegos under the guise of purchasing more than 30 lots in
But on Jan. 10, 2005, Region III loaned its construction company, Housing Enterprises, Inc., $300,000 and referenced the purchase of the lots in
The next day, the report states, the HEI board approved the loan, according to minutes that “cryptically state that just prior to adjournment, ‘Mr. Gallegos discussed a loan agreement on personal property which was approved by the board.’”
The loan was repaid, with 6.25 percent interest, on July 31 of this year, as the housing authorities came crashing down around Gallegos. That was the day before the Legislative Finance Committee discussed problems with the housing authorities – the same day Gallegos resigned.
The investment council report also found “a disproportionate amount of contributions to employee plans going specifically to Vincent ‘Smiley’ Gallegos, Dennis Kennedy and Denise Padilla.” The housing authority was matching Gallegos’ contributions to a retirement fund at a 7-1 rate in 2005 and 2006, and matching those of Padilla at a 3-1 rate. In addition, Gallegos and Kennedy had other plans, and the housing authority contributed almost $18,000 to Kennedy’s and more than $23,000 to that of Gallegos.
The report found that the Region III authority filed “highly inaccurate and misleading” expenditure reports with the investment council, and that it was repeatedly selling homes to people who didn’t meet low-income requirements. The properties in
The attorney general’s office is investigating, according to the report, so it can take “appropriate enforcement action, including securing repayment of the bonds as well as any other remedies that may be available.”
The report identifies properties worth about $1.2 million, including the lots in
The report was presented to the State Investment Council on Friday, according to a weekend article in the Albuquerque Journal.
At the meeting, according to the newspaper, State Investment Officer Gary Bland said he couldn’t say whether the problems were intentional or criminal, but said, “There’s a question of culpability and stupidity here.”
State Land Commissioner Patrick Lyons, a member of the council, was quoted by the Journal as saying Gallegos “knew exactly what he was doing. It wasn’t stupidity. … I just believe he’s hurt a lot of good people.”
Gallegos is a former legislator from