State lawmaker calls ‘pay-to-play’ claims disturbing
N.M. agencies defend investments, saying no rules, policies or laws were violated
State Rep. Rep. Bill McCamley, who has formally asked the state attorney general to investigate large campaign contributions to Gov. Susana Martinez from executives of firms that received millions of dollars in state investments, said Thursday that recent pay-to-play allegations are part of a “disturbing pattern.”
The allegations came in an article published this week by Business Times International, a New York-based online magazine, which documented more than $1 million in political contributions linked to eight investment firms that were awarded hundreds of millions of dollars in investments by the state of New Mexico.
Martinez, through a spokesman, has vehemently denied any wrongdoing, and on Thursday, officials with state agencies that made the investments defended their actions, saying no rules, policies or laws were violated.
In a hand-delivered letter to Attorney General Hector Balderas, McCamley, a Las Cruces Democrat, asked for an investigation into whether any of the contributions to the Republican governor and political groups supporting her violate the state procurement code, state Government
Conduct Act or federal Securities and Exchange Commission rules dealing with campaign contributions.
Balderas spokesman James Hallinan on Thursday said only, “I can confirm the Office of the Attorney General has a received a public referral and this matter is under review.”
The bulk of the investments discussed in the article, which Business Times International published in cooperation with Maplight, a California-based nonprofit that examines the influence of money in politics, were made by the state Educational Retirement Board.
That board, which oversees a $12 billion pension fund for teachers and other school employees, issued a statement Thursday that said allegations in the article were “simply false.”
The governor “does not initiate, suggest or influence investment decisions by [the Educational Retirement Board],” the statement says, adding that board members “do not know which managers are under consideration until the final approval at the Investment Committee.”
The statement said board members voluntarily adopted a transparency policy that requires fund managers to disclose political contributions. But that policy — like other state procurement regulations — doesn’t include donations to political action committees or “independent expenditure” groups, which is where the bulk of the contributions in question went.
McCamley held a news conference Thursday in Albuquerque with state Democratic Party Chairman Richard Ellenberg at which the legislator pointed to previous controversies involving the governor and campaign contributions.
Earlier this year, the state Senate voted to revoke its approval of a controversial state lease extension for Albuquerque office space for the Children, Youth and Families Department.
The administration originally assured lawmakers that the property owners had made no significant political contributions.
But after the Senate approved the lease, department officials admitted the owners had given more than $26,000 to Martinez.
McCamley also brought up campaign contributions from K12 Management Inc., a company the state has paid to oversee New Mexico’s A-F grading system for evaluating public schools. Campaign finance records show the Virginiabased company has given Martinez’s campaign and her political committee, SusanaPAC, $15,000 between 2012 and 2016.
The governor has denied any wrongdoing in those cases as well.
The Educational Retirement Board statement said, “Of the hundreds of investments made by [the Educational Retirement Board], the International Business Times article found only one that may or may not be in violation of the SEC rules regarding a two-year ‘blackout’ period on contributions. [The Educational Retirement Board] has asked the manager, EnerVest, for a thorough explanation of this situation.”
Bob Jacksha, investment officer for the board, said later Thursday that his agency had spoken with EnerVest officials who said that company lawyers had cleared the $61,000 in campaign contributions from EnerVest’s chief executive officer, John Walker, to various Martinez-related committees.
The return on the EnerVest fund that was awarded $37 million from the Educational Retirement Board has been about 10 percent, Jacksha said.
The State Investment Council also has disputed allegations that it has awarded investments based on political considerations for Martinez, who chairs the council and appoints some of its members.
State Investment Officer Steve Moise on Thursday released a letter he sent to the State Investment Council.
“The council has strived over the last seven years of its reform efforts, to install strong systems and policies for both investment and governance, while working to correct the previous lapses and punish those who caused a true pay-to-play scandal a decade ago,” Moise wrote. “We are working diligently to correct the misstatements and the resulting misperceptions being created and circulated by various sources.”
The earlier scandal to which he referred involved a politically connected placement agent who shared in more than $22 million in fees from investment firms doing business with the state during Gov. Bill Richardson’s administration.
The bulk of the investments discussed in the article by Business Times International were made by the state Educational Retirement Board.