Prosecutors review secretive state settlements

Several cases in Gov. Martinez administration lacked sufficient documents for payouts, state auditor says

State and local prosecutors are reviewing the results of a special audit about secretive financial settlements under the past administration of Gov. Susana Martinez that were used to resolve human rights complaints and other legal claims against public officials.

State Auditor Brian Colón told a Senate committee his agency forwarded audit documents for possible criminal investigation to the state Attorney General’s Office and the District Attorney’s Office in Santa Fe, as well as the newly founded State Ethics Commission that handles noncriminal complaints.

A special audit from Colón’s office of 18 past settlements arranged by the state’s Risk Management Division and contract attorneys found two-thirds of the payouts lacked sufficient documentation or investigations.

Some settlements were sealed until Martinez left office at the end of 2018 and appeared to be protecting the

former Republican governor’s political legacy, Colón said.

Matt Baca, a spokesman for the Attorney General’s Office, said the matter is under review. District Attorney Marco Serna could not immediately confirm the referral.

State Ethics Commission Executive Director Jeremy Farris said the fledgling agency — authorized by voters in 2018 — does not have jurisdiction over government conduct that occurred before July 1, 2019. The seven-member commission holds its first public meeting Friday.

Contacted Tuesday, Martinez said she was never involved in any state settlement agreements made by the Risk Management Division.

“I was unaware,” she said. “I was not involved in any throughout my eight years [in office]. It is a separate entity for which it would have been inappropriate for me to be involved.”

She declined to discuss the settlement process further or comment on calls for reforms.

Legislators are considering a bill from Republican Sen. Sander Rue of Albuquerque that would eliminate a state-mandated 180-day delay in the publication of state settlements and require that future administrations continue the new practice of publishing settlements to the state’s online information clearinghouse.

Among $2.7 million in settlements flagged for irregularities, the state has acknowledged it previously paid $900,000 to three state police officials.

That payment resolved a lawsuit alleging discriminatory, lewd behavior and retaliation by former state police Chief Pete Kassetas, who has said he urged the administration to investigate claims further.

“We identified the confidentiality provisions intended to completely circumvent the process,” Colón, a Democrat, told legislators. “That may or may not constitute criminal behavior but was a clear abuse of power.”

A separate internal audit of settlement procedures has turned up procurement violations during the final six months of the Martinez administration as lawsuits against state officials were assigned to outside defense attorneys whose contracts with the state had expired, according to General Services Secretary Ken Ortiz.

His agency’s Risk Management Division provides legal defense to state officials.

Ortiz, an appointee of Democratic Gov. Michelle Lujan Grisham, says 24 cases were assigned to legal firms without valid contracts in the July-September

2018 period for legal fees in excess of $100,000.

Ortiz said changes have been made so that all state settlement agreements are now accompanied by a “litigation risk analysis” that provides an overview of accusations, explores potential jury awards and provides a recommended settlement value. Settlements above $200,000 require Cabinet-level authorization, he said.

Democratic state Senate Majority Leader Peter Wirth of Santa Fe pressed for details about which officials authorized settlements in the final months of the Martinez administration, and he wondered aloud whether taxpayer funds might be restored.

“It doesn’t pass the smell test to say the least,” he said. “Is there any option for the taxpayer to recuperate those amounts?”