Report: Gaps in financial disclosures at Legislature

State has limited ability to enforce law, often doesn’t

New Mexico’s law requiring public officials to disclose their financial interests remains widely misunderstood, regularly ignored and mostly unenforced, according to the results of a sweeping review.

The report by New Mexico Ethics Watch found some legislators did not disclose contracts between the state government and their family businesses. Other legislators did not fully disclose their spouses lobbying or performing legal work for clients with business in front of state agencies. And some disclosed hardly anything. Coming more than 18 months after the group issued its first study of the state’s financial disclosure law, this third report shows little progress in ensuring public officials provide voters with insight into potential conflicts of interest.

The report points to little enforcement of the law, little discretion for the Secretary of State’s Office to require more information and a statute that remains at best unclear or at worst full of holes.

“It’s an odd part of the law that just isn’t enforced,” said Kathleen Sabo, executive director of New Mexico Ethics Watch.

The Financial Disclosure Act requires legislators, candidates for state office, Cabinet secretaries and certain other public officials to file an annual report detailing their financial interests, along with those of their spouse.

Unlike disclosures required of members of Congress, New Mexico does not require officials to specify their range of income. They can leave their disclosures vague. And the Secretary of State’s Office, which compiles the reports, has usually done little to verify the information.

Some legislators provide few details beyond their address and occupation. Some leave blank the section that calls for reporting any sources of income over $5,000.

The financial disclosure form also includes a section where lawmakers are required to detail any goods or services they have sold to state agencies worth more than $5,000.

Several legislators left that section blank despite them owning parts of companies that lease property to the state government.

Another section calls for officials to report if their spouse or a colleague of a spouse was a lobbyist and, if so, to disclose their clients. Some legislators appear to have omitted clients or do not list clients at all.

These gaps have given rise to campaign season attacks.

In the state’s 2nd Congressional District, Democrats are airing ads criticizing Republican candidate Yvette Herrell for failing to report her family real estate company’s state contracts while she has been a state representative.

Other lawmakers are precise. They specify the amount of money they earn from farming or other work and if family members have applied for state programs, such as economic development incentives.

But compared to some other states with disclosure laws, New Mexico demands relatively little.

Legislators have sponsored a few bills in recent years to change the state’s financial disclosure laws. But each proposal has failed.

Rep. Zach Cook, R-Ruidoso, sponsored legislation last year that would have required any official listing his occupation as a consultant to disclose clients who have paid him more than $5,000. The bill cleared one committee without opposition but stalled in another.

Another bill sponsored by Democratic Reps. Javier Martinez and Nathan Small, along with Republican Rep. Rebecca Dow, would have tasked the secretary of state with compiling all financial disclosure reports. Currently, lawmakers whose districts are entirely contained within one county may send their form to the county clerk, creating confusion around the Legislature. That bill also failed.

Rep. Jim Dines, a Republican from Albuquerque and longtime advocate for stronger ethics laws, says the Financial Disclosure Act could use a number of changes. For example, financial disclosure forms should call for lengths of employment and residence, past employers and previous names. If a filer’s spouse has represented a client as a lobbyist or lawyer in front of a state agency, they should specify the matter at issue, he added.

As it stands, Dines said: “You don’t have to put much down.”

But the main problem, he added, is that the Secretary of State’s Office does not have the resources to follow up and verify the information in the financial disclosures. And there is not sufficient training, such as a webinar, for completing the form, he added.

“We need to fund the Secretary of State’s Office and make sure that staff goes and enforces that particular area,” Dines said.

The office took a big step toward bringing greater transparency to the process when Secretary of State Maggie Toulouse Oliver posted several years’ worth of financial disclosure filings on her office’s website in 2017. Still, there are apparently some gaps. The New Mexico Ethics Watch report said seven cabinet secretaries and some candidates for the Legislature did not file financial disclosures as required, meaning they may not be entitled to continue serving in office or for a spot on the ballot.

Legislative aides and the Governor’s Office said the forms had in fact been filed but merely were not visible on the Secretary of State’s website. In the case of the Cabinet secretaries, the Governor’s Office turned over the forms in question to a reporter with an email showing each had been received by the secretary of state’s staff earlier in the year.

For now, Toulouse Oliver’s office believes it has limited ability to change the requirements for what officials must disclose.

Nonetheless, Sabo says the forms should be a resource for voters.

“This can be an incredible tool for voters to make educated choices. It’s just not at that level,” she said.