{"id":41574,"date":"2012-07-20T07:56:29","date_gmt":"2012-07-20T13:56:29","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/?p=41574"},"modified":"2012-07-23T07:34:37","modified_gmt":"2012-07-23T13:34:37","slug":"nmfa-needs-to-answer-questions-now","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2012\/07\/nmfa-needs-to-answer-questions-now\/","title":{"rendered":"NMFA needs to answer questions \u2013 now"},"content":{"rendered":"
\"Heath<\/a>

Heath Haussamen<\/p><\/div>\n

As investigators scramble to figure out what\u2019s going on at the New Mexico Finance Authority, and NMFA officials claim they were duped by a rogue employee who created a fake audit but say little else, there are questions the agency can \u2013 and needs to \u2013 answer now.<\/h4>\n

There was a lot of debate this week about whether the New Mexico Finance Authority<\/a> should proceed with the hiring of an independent investigator from outside the state to get to the bottom of its fraudulent audit<\/a> in an attempt to calm Wall Street\u2019s fears.<\/p>\n

Ultimately, State Auditor Hector Balderas<\/a> and Gov. Susana Martinez<\/a> are pleased that the NMFA Board cancelled the $1.275 million contract with the Washington law firm Steptoe and Johnson<\/a> and subcontractors. Both essentially argued that Balderas\u2019 special audit and law enforcement probes should come first \u2013 and NMFA had been putting its independent probe before those.<\/p>\n

Balderas also told the NMFA Board during a special meeting on Wednesday that it could recommend to his office an outside firm to help, and it appears that will happen. The same firm may be rehired \u2013 just under new terms agreed to by Balderas.<\/p>\n

The shift came after Balderas told the NMFA \u2013 basically the bank for government agencies in New Mexico \u2013 that it hadn\u2019t complied with state regulations that required it to notify the auditor in writing of the facts surrounding the fraudulent audit, to recommend an outside auditor to complete the still-lingering 2011 audit, to immediately provide a list of NMFA bank account numbers and authorization to access the accounts, and to provide the auditor with the scope of Steptoe and Johnson\u2019s planned investigation.<\/p>\n

Balderas told NMPolitics.net he\u2019s \u201cpleased with the leadership of the board,\u201d which \u201cis now heading in the right direction in getting the agency in compliance with state law.\u201d<\/p>\n

Martinez spokesman Scott Darnell said the governor, who appoints the majority of members to the NMFA board, \u201cthinks that process should be very open, and believes NMFA should cooperate fully with law enforcement and the state auditor at every turn.\u201d He said the board\u2019s move to cancel the contract and work with Balderas \u201cshould send a strong message about how serious the matter is being taken.\u201d<\/p>\n

Sen. Mary Kay Papen<\/a>, who heads the NMFA Oversight Committee, wasn\u2019t impressed. Long a fan of Balderas, she said she\u2019s not concerned with the competence of his office. But she said Wall Street experts have advised that the state needs to bring in outside help, and New Mexico needs to take that advice. She had previously called for the NMFA Board to uphold the $1.275 million contract<\/a>.<\/p>\n

\u201cWe want to make sure that our money is safe and what we\u2019re doing is safe,\u201d Papen said, adding that she hopes Steptoe and Johnson is rehired.<\/p>\n

I honestly don\u2019t know who\u2019s right, but I know the stakes are high. Wall Street has put the state on notice that its credit rating could be downgraded. If it is, New Mexico will have to pay higher interest rates to borrow money for public works projects including roads and schools. That means taxpayers will have to pay more for each project, which ultimately means fewer projects will be built.<\/p>\n

Lots of questions to answer<\/h3>\n

What I do know is that NMFA has a lot of questions to answer \u2013 to the taxpayers, to Wall Street, to investigators, to everyone. Some of them it should be able to answer immediately, but to date it has not.<\/p>\n

Among the questions:<\/p>\n