{"id":4135,"date":"2009-01-14T16:51:00","date_gmt":"2009-01-14T22:51:00","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/2009\/01\/guvs-administration-faces-new-pay-to-play-allegations\/"},"modified":"2009-01-14T16:51:00","modified_gmt":"2009-01-14T22:51:00","slug":"guvs-administration-faces-new-pay-to-play-allegations","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2009\/01\/guvs-administration-faces-new-pay-to-play-allegations\/","title":{"rendered":"Guv’s administration faces new pay-to-play allegations"},"content":{"rendered":"

\"\"<\/a><\/p>\n

Lawsuit alleges that state invested with company in exchange for contributions to Richardson\u2019s presidential campaign; guv says state did nothing inappropriate
<\/span><\/p>\n

\n

This article has been updated.<\/p>\n

Gov. Bill Richardson\u2019s<\/a> administration was hit with its second pay-to-play controversy today with the unsealing of a lawsuit alleging that the state lost $90 million in investment deals made in exchange for contributions to Richardson\u2019s presidential campaign.<\/p>\n

The lawsuit, which you can read by clicking here<\/a>, was filed in July and unsealed today by Frank Foy, the former chief investment officer for the New Mexico Educational Retirement Board<\/a>. The educational board invested $40 million and the State Investment Council<\/a> invested $50 million with Vanderbilt Financial and affiliated companies. Foy alleges that the investments were directly tied to more than $15,000 that Vanderbilt employees and family members gave to the governor\u2019s campaign.<\/p>\n

You can view a list of the contributions provided by Foy\u2019s attorney by clicking here<\/a>.<\/p>\n

\u201cIt was my job at the Educational Retirement Board to act as a prudent fiduciary to protect schoolteachers\u2019 retirement money,\u201d Foy said today in a news release announcing the lawsuit. \u201cBut teachers and taxpayers have lost millions due to pay-to-play practices that benefited Gov. Richardson and his campaigns.\u201d<\/p>\n

The governor\u2019s office did not immediately respond to a request for comment. It\u2019s not clear whether Richardson is named in the lawsuit, because dozens of defendants\u2019 names were not unsealed with the rest of the lawsuit today. At this time, the governor has not been publicly named as a defendant.<\/p>\n

\"\"<\/a>State officials who have been publicly named as defendants are State Investment Officer Gary Bland and Bruce Malott, chairman of the educational retirement board. Several companies and officials tied to those companies have also been named.<\/p>\n

This is the second pay-to-play controversy currently dogging Richardson\u2019s administration. A federal grand jury is investigating an allegation that CDR Financial Products<\/a> was paid almost $1.5 million in 2004 on a state contract it received in exchange for $100,000 in contributions to two Richardson political action committees and another $10,000 to his gubernatorial campaign.<\/p>\n

\"\"<\/a>No information released publicly has directly linked Richardson to the CDR probe, but the investigation centers around whether staffers in Richardson\u2019s office, including former Chief of Staff Dave Contarino, influenced the hiring of CDR. Richardson recently withdrew his nomination to be commerce secretary because of that controversy.<\/p>\n

Who is John Doe #2?<\/span><\/p>\n

In the new lawsuit, Foy alleges that Bland and Malott were instructed by \u201cJohn Doe #2\u201d — whose name has not been released — to make the investments with Vanderbilt in exchange for the contributions. According to the lawsuit, beginning in 2003, the educational board was pressured \u201cto award contracts and make investments with persons or entities based upon political considerations. These pressures were exerted by Bruce Malott on instructions from John Doe #2 (and perhaps others).\u201d Foy also claims that a Vanderbilt employee pressured him to invest with the company.<\/p>\n

Foy claims he was targeted in a sexual harassment lawsuit in 2007 and forced to retire in 2008 because he tried to stop pay-to-play related to activity at the educational retirement board. According to The Santa Fe New Mexican<\/a>, Foy said at a news conference today that the state ruled against him in the harassment case, which he said centered around comments about an employee who wore \u201cinappropriate clothing.\u201d<\/p>\n

Foy\u2019s lawsuit was filed under a relatively new state law intended to root out public corruption that allows people to sue on behalf of the state, which Foy is doing. He\u2019s seeking total damages that could exceed $300 million for the state. If an award is made, Foy would receive a percentage of the award for his work on behalf of the state.<\/p>\n

That law requires a citizen to take his case to the attorney general before filing his own lawsuit. Only if the AG declines to prosecute can the citizen file the lawsuit on behalf of the state.<\/p>\n

An AG spokesman did not immediately respond to a request for comment.<\/p>\n

\n

Update, 4:15 p.m.<\/p>\n

Richardson spokesman Gilbert Gallegos released this statement:<\/p>\n

\u201cThe governor is confident that the state agencies named in this lawsuit acted properly and in the best interest of New Mexicans,\u201d he said. \u201cThis lawsuit, filed by a disgruntled former employee who was accused of serious misconduct during his time as a state employee, makes absurd claims against state agencies. The state will vigorously defend those agencies.\u201d<\/p>\n

Meanwhile, I\u2019ve been unable to reach Bland\u2019s spokesman, Charles Wollmann, for comment, but Wollmann told The New Mexican that Bland has done nothing wrong.<\/p>\n

\u201cThe state investment officer has not participated in any wrongdoing and will vigorously fight the reckless allegations made today,\u201d he was quoted as saying.<\/p>\n

The New Mexican could not immediately reach Malott for comment.<\/p>\n

\n

Update, 4:50 p.m.<\/p>\n

Wollmann just provided me with his full statement:<\/p>\n

\u201cMr. Foy\u2019s assertions are without merit and his motivations are questionable at best. The state investment officer has not participated in any wrongdoing and he will vigorously fight the reckless allegations made today,\u201d Wollmann said.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"

Lawsuit alleges that state invested with company in exchange for contributions to Richardson\u2019s presidential campaign; guv says state did nothing inappropriate This article has been updated. Gov. Bill Richardson\u2019s administration was hit with its second pay-to-play controversy today with the unsealing of a lawsuit alleging that the state lost $90 million in investment deals made […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4135","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/4135","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=4135"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/4135\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=4135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=4135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=4135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}