New Mexico Lawmakers Keep Close Tabs on on Finance Authority Scandal
Two Doña Ana County lawmakers weighed in Thursday on developments in the scandal rocking New Mexico’s main financing body for public projects and said they’re hoping for answers to questions arising from a faked audit report.
Las Cruces-based state Sen. Mary Kay Papen, D, who chairs a 42-member legislative oversight panel for the New Mexico Finance Authority, said she knew the two employees arrested and accused Wednesday in connection with falsifying the agency’s yearly audit report, as well as Rick May, the chief executive officer who was suspended with pay Thursday but hasn’t been charged with a crime.
“I’ve known all of them, and I know most of the staff (at NMFA) and have had nothing but good cooperation with them,” she said.
Papen said she knew John Duff, the chief operating officer who has been charged, better than she did Greg Campbell, the agency’s former controller who reported to Duff. She described Duff as “unbelievably qualified.”
“I’ve always thought he was very professional, so I want to make sure we’re not just going on a witch hunt,” she said.
May, a former state Department of Finance official, hadn’t been at the helm of the agency long, but, “I liked him. I worked well with him,” Papen said.
In the first 11 months of 2011-12, the NMFA issued about $302 million in loans to public bodies across the state, according to a report from the entity.
The New Mexico Finance Authority Oversight Committee is made up of House and
Senate members. It meets in between annual legislative sessions, holds field hearings for updates on Finance Authority-funded projects and proposes new laws. It’s different from the NMFA board, made up of a number of Gov. Susana Martinez appointees, that runs the agency.
Papen said she’s “distressed” about the situation, but the most important task now is gaining an accurate picture of the agency’s finances — something that should happen with heavy scrutiny from three directions. The state auditor, the NMFA board and the Legislative Council Service are all launching reviews, she said. She’s hoping the process is “transparent” and that the entities independently reach similar conclusions.
The NMFA’s “reputation has certainly taken a hit, but what I’m hoping is that, once they’ve done a complete and new forensic audit, it will show there’s no money missing,” Papen said.
“From what we’ve seen, it has appeared to us that they run a good ship,” she said. “If there’s some mis-steering of the ship, we need to correct that; we don’t want a Titanic.”
State Rep. Andy Nuñez, I-Hatch, too, acknowledged that any problems hidden by the audit could range from minor to serious.
“But we need to get to the bottom of it, because if not, our bond ratings are going to down,” said Nuñez, also a member of the oversight panel.
The Finance Authority gets money from New Mexico sales tax revenue and lends it at low interest rates to cities, counties and other public bodies for infrastructure projects and equipment. The debt is sold to investors.
Papen said the authority’s bond rating has been “stellar” so far, which helps it offer the low-cost loans. A lower bond rating would make loans more costly, she said.
Papen said she’d fielded inquiries from some concerned investors whose portfolios contain Finance Authority-issued bonds. But she said the problems within the agency now shouldn’t affect any past bonds.
In 2011-12, the Finance Authority loaned $964,000 for two new fire pumper trucks and $1 million for solid waste equipment to the city of Las Cruces, according to a list of projects from the agency.
“I just hope we end up with a clean bill of health. And if we don’t, I hope we do what it takes to come up with a clean bill of health,” Papen said.