Friday\u2019s announcement that the Region III Housing Authority defaulted on a $2.5 million bond wasn\u2019t a shocker, and shouldn\u2019t have surprised Gov. Bill Richardson.<\/p>\n
That housing authority is run by Vincent \u201cSmiley\u201d Gallegos, a former state legislator whose tenure has been plagued by scandal for months.<\/p>\n
There are a number of regional housing authorities in the state, all quasi state agencies whose board members are appointed by the governor. In theory, the authorities build or fix up affordable homes, without spending taxpayer money, though bonds that are repaid with profits from home sales.<\/p>\n
Several years ago Richardson tasked Gallegos, who was in charge of the Region III authority in Albuquerque, with restarting housing authorities in other areas of the state, including the Region VII authority that is supposed to serve Do\u00f1a Ana, Sierra and Socorro counties.<\/p>\n
Region VII has not done that.<\/p>\n
The scandal began several months ago when Emma Ortiz, who Richardson put in charge of Region VII, was ousted after being at odds with Gallegos. Region VII hadn\u2019t done much in several years of operation, besides building up a debt of several hundred thousand dollars to Region III, according to Region VII board member Frances Williams.<\/p>\n
Williams accused Gallegos in March of mismanaging the housing authorities and improperly selling homes to investors instead of low-income families, and questioned where the money has gone since only a few homes have been sold in Las Cruces and not a single one has been built or fixed up in the rest of Region VII.<\/p>\n
Gallegos responded by suing Williams for slander. The lawsuit is pending in district court in Las Cruces.<\/p>\n
At the time, the Richardson administration and attorney general\u2019s office both said they were looking at the housing authorities. The Richardson administration was reviewing the operations and finances of the authorities. The attorney general\u2019s office was investigating whether the housing authorities\u2019 building corporation actually had the tax-exempt status Gallegos was claiming.<\/p>\n
All this led to Thursday, when Region III failed to make a bond payment and requested an extension from the state, which purchased the bond.<\/p>\n
Richardson directed the state investment council – which he chairs – to move forward Friday with a \u201cthorough forensic financial examination\u201d of the housing authority. Isn\u2019t that what the administration already said it was doing? Or was the previous announcement just an overblown news release?<\/p>\n
The state has invested a lot in the housing authority bonds, so this might come back to bite the taxpayers in the end.<\/p>\n
The state purchased the $2.5 million bond from Region III in June 2003, and another $2.5 million bond in 2004, which won\u2019t come due until June 2007, according to a Richardson news release.<\/p>\n
\u201cRichardson\u2019s press release states he wants a public investigation by the investment council. But he is the chairman,\u201d one critic said. \u201cWhy didn\u2019t they provide oversight or foresight before making the investment? He chairs the same investment council that was responsible for oversight of state Treasurer Vigil and the treasurer\u2019s office for the past three years. The same Investment Council that now, apparently, invested $5 million of taxpayer dollars into the housing authority, which the authority apparently now can\u2019t pay back. Kind of like loans made to Hollywood movie producers, who can\u2019t pay back their loans or pay the people they hired in New Mexico. The losers – the taxpayers. The winners – follow the money trail.\u201d<\/p>\n
\u201cThe state has played loose and fast with state investments, and there have been many efforts in the past three years to allow for more and more risk of state-invested taxpayer dollars,\u201d the source said. \u201cThe buck stops nowhere.\u201d<\/p>\n
Gallegos, a former state representative from Clovis, makes more than $158,000 per year from the housing authority corporations, according to the Albuquerque Journal. 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\u2019s office during the legislative session.<\/p>\n
An earlier version of this posting stated that Richardson hired Gallegos, which is incorrect.<\/em><\/p>\n ***<\/p>\n The state auditor\u2019s office has completed its review of the Las Cruces Public Schools\u2019 handling of vending machine contract money, and has turned over the information to the attorney general for further investigation.<\/p>\n The vending machine money became an issue when citizen watchdog Earl Nissen found that former Superintendent Louis Martinez had spent the money on things such as flowers and donations to non-profit organizations. In an e-mail a former employee of the state auditor\u2019s office told Nissen and Lesa Wilson, a district parent, that there might be criminal violations.<\/p>\n The state anti-donation clause prevents the donation of public money to private entities except in a few instances.<\/p>\n State Auditor Domingo Martinez and Attorney General spokesman Paul Nixon were tight-lipped about the investigation Friday. Nixon would confirm that the case is in the hands of attorney general investigators.<\/p>\n \u201cBy the mere fact that we sent it over (to the attorney general\u2019s office), that gives you the possible indication of what we found,\u201d Martinez said.<\/p>\n Nissen said the state auditor\u2019s office told him the vending machine money is public and may have been misused by Martinez.<\/p>\n Stay tuned.<\/p>\n An earlier version of this posting incorrectly stated that the district\u2019s attorney took the position that the vending machine money was not public. Some of the campaign finance reports for local candidates who have opponents in Tuesday\u2019s primary weren\u2019t online as of Sunday night, and most that were online weren\u2019t that interesting.<\/p>\n Sandy Jones, the Democratic challenger to Public Regulation Commissioner E. Shirley Baca, had a couple of interesting donations.<\/p>\n He got $500 from the Downs at Albuquerque and $250 from Ruidoso Downs Racing. More interesting than that – he was given $1,000 by state Tourism Secretary Michael Cerletti and another Cerletti family member.<\/p>\n Gov. Bill Richardson called for Baca\u2019s resignation last year when she was arrested on drug-possession charges that were later dismissed. Baca refused.<\/p>\n ***<\/p>\n On Saturday, the Las Cruces Sun-News published the letter former District Judge Larry Ramirez wrote in announcing his resignation. You can read it by clicking here<\/a>.<\/p>\n
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