Testimony begins on Padilla charges

Ex-Cabinet member faces embezzlement allegations

SANTA FE — The co-owner of a Bernalillo trucking company testified Monday that Demesia Padilla, the former head of New Mexico’s Taxation and Revenue Department, had wideranging latitude as the firm’s accountant to pay its taxes and keep financial records in order.

But Harold Dominguez said on the first day of a preliminary hearing that Padilla was not authorized to access the company’s bank account to pay herself, even as an economic recession forced the company to fall behind on its taxes and other payments.

“She had codes to get in the house. … She had codes for everything,” Dominguez testified at a hearing in Santa Fe Magistrate Court. “We treated her like family.”

Padilla, one of the original members of Gov. Susana Martinez’s Cabinet, was charged in June by Attorney General Hector Balderas’ office with embezzling more than $25,000 from Harold’s Grading & Trucking and using her state government posi-

tion to push for favorable tax treatment.

The preliminary hearing that started Monday will determine whether Padilla should stand trial on the charges. She could face up to 25 years in prison and as much as $30,000 in fines if convicted of all eight charges — three felonies and five misdemeanors — against her.

Much of the preliminary hearing’s opening day focused on technical testimony from bank executives about the trucking company’s account, a Padilla credit card account and transactions linking the two accounts.

The Attorney General’s Office interviewed nearly a dozen current and former tax department employees and obtained a search warrant for bank records before filing charges.

However, the AG’s Office has filed a motion to seal roughly 60 pieces of evidence — primarily bank statements — because they contain taxpayer identification numbers, bank account numbers and more.

A judge has not ruled on the motion, but two assistant attorneys general have argued that sealing the evidence is necessary to protect the information from public disclosure.

Meanwhile, Padilla’s attorney, Paul Kennedy of Albuquerque, sought Monday to highlight possible inconsistencies in Dominguez’s testimony from when he spoke in 2016 with AG’s office investigators.

Kennedy also suggested during cross examination that Padilla was owed money by the trucking company for her accounting services and was, in fact, authorized to pay the firm’s expenses.

Dominguez acknowledged during testimony that he had little knowledge of the company’s financial affairs — his son and daughter-in-law handle most of that work — and doesn’t know how to use the internet.

He said he and other family members involved in running the trucking company confronted Padilla in February 2013 after they noticed unauthorized financial transactions.

Padilla, who was a Cabinet secretary at the time, appeared nervous and tried to leave quickly, Dominguez said.

“We never thought she would do that to us,” he added.

Dominguez acknowledged during cross examination that the confrontation was a testy one, with at least some family members yelling at Padilla.

The charges against Padilla were filed roughly 18 months after state investigators raided the Taxation and Revenue Department in Santa Fe in search of tax documents connected to the former agency head and her husband. Padilla resigned from her post shortly afterward.

Several current and former Taxation and Revenue Department employees could be called to testify by prosecutors during the preliminary hearing, which is scheduled to last through at least the end of this week and possibly into next week.