Secretary of state denied funds to pay Pearce lawyers

Board sees no emergency after state loses lawsuit over campaign finances

The New Mexico Board of Finance on Tuesday rejected a request from the Secretary of State’s Office for $66,500 in “emergency funding” to help settle a lawsuit filed by U.S. Rep. Steve Pearce over the use of campaign funds in his run for governor.

Board members, including Gov. Susana Martinez, said the request did not meet the criteria for emergency funding, such as a natural disaster, especially in the midst of an ominous fire season in New Mexico.

“What is the emergency here?” asked board member John Kormanik. “It’s not like we have a forest fire. It’s not like we’re having floods. We’re not having a riot at the penitentiary.”

After an hourlong discussion and debate, the board voted 5-2 to deny the request. Only State Treasurer Tim Eichenberg and Adelmo “Del” Archuleta voted in favor.

Board members who voted against the request suggested that Secretary of State Maggie Toulouse Oliver seek a supplemental appropriation from the state Legislature in the upcoming fiscal year. A spokesman for Toulouse Oliver said she plans to do so.

The request for emergency funding stemmed from fees owed to Pearce’s lawyers.

Toulouse Oliver, a Democrat, had told Pearce, a Republican, that he could not transfer hundreds of thousands of dollars from his federal campaign account to his campaign for governor.

“Pursuant to state law, the only amount that could have been transferred from that federal account was $5,500 for the primary and $5,500 for the general [election],” Toulouse Oliver told the board.

“Congressman Pearce respectfully disagreed with our interpretation and challenged that in federal court, and the federal court determined on the basis of the First Amendment to the federal Constitution that the New Mexico law was unconstitutional and therefore ruled in Congressman

Pearce’s favor.”

Pearce’s camp said Toulouse Oliver had acted in partisan fashion, only to lose in court and then be rebuffed by the Board of Finance.

“Today was further proof that this situation was entirely avoidable and is the result of the secretary of state who recklessly and incompetently attempted to violate a candidate’s constitutional rights for partisan gain,” Kevin Sheridan, a spokesman for Pearce, said in an email. “Her repeated delay tactics and overt politicization of her office were rejected outright by the court. She alone is responsible for costing taxpayers this money and one way or another she will ultimately bear responsibility for how this is resolved.”

A federal judge granted an injunction allowing Pearce to transfer the money to his campaign for governor. The transfer gave him a financial edge over U.S. Rep. Michelle Lujan Grisham, the Democratic nominee for governor.

Pearce had more than $1.9 million in his campaign account as of late May. Lujan Grisham had more than $1.1 million on hand.

Martinez, who is entering the last six months of her second and final term, said she wanted “to take the politics out of this and not make a decision based on politics.”

“But when someone decides to sue, I have to decide, ‘Can I hire a lawyer? Can I afford one?’ ” she said before John Blair, New Mexico’s deputy secretary of state, pointed out that it was Pearce, not Toulouse Oliver, who initiated the lawsuit.

The Secretary of State’s Office, along with the Attorney General’s Office and the 5th Judicial District Attorney’s Office, which were also named in the lawsuit, decided to settle and agreed to pay about $133,000 in legal fees. The District Attorney’s Office agreed to pay 10 percent, and the Secretary of State’s Office and the Attorney General’s Office agreed to split the remainder.

“Secretary Toulouse Oliver went to the State Board of Finance in a good faith effort to request the necessary funds to pay the attorneys’ fees owed to Congressman Pearce,” Joey Keefe, a spokesman for the Secretary of State’s Office, said in an email. “Governor Martinez and Lieutenant Governor [John] Sanchez made it clear that they don’t think paying these fees to Congressman Pearce qualifies as an emergency.”

Eichenberg, a Democrat, said Toulouse Oliver’s request met his criteria for emergency funding.

“When a federal judge gives a judgment against any government agency, it becomes an emergency,” he said. “Because of the players, I don’t think you’re going to see Steve Pearce show up with a sheriff ’s deputy to take the secretary of state’s copy machine for this judgment. But I think it’s still possible, so I thought it met the criteria of an emergency.”

Martinez, though, said her concern was the purpose of the fund.

“I don’t see how, as being fiscally responsible, that we spend it just because we have it versus we’re spending it because it fits the purpose of being an emergency,” the governor said.

But Archuleta, also a Democrat who voted in favor of the request, said his was a business decision. He also pointed out that the board had previously approved a similar request from Hanna Skandera, the state’s former education secretary. Skandera was an ally of Martinez. The board granted Skandera a $540,000 request for attorneys’ fees, though the money for that request came out of an operating reserve fund.

“With all due respect governor, I am not in favor of this just because we have the money and et cetera,” Archuleta said. “I’m in favor of it because, to me, this is a known expense. This is going to happen. Me as a taxpayer, I don’t really care if it comes from the Secretary of State’s Office, this emergency fund, is appropriated by the Legislature six months from now. Wherever it comes from, it’s still a state expenditure.”