Sanctions on Foy’s Lawyer Sought

AG Lashes Out At Whistle-blower

SANTA FE — Sniping between lawyers involved in a case aimed at recovering money allegedly lost in politically influenced investment deals has intensified.

In a court filing this week, Attorney General Gary King’s office and an East Coast law firm hired by the State Investment Council argued that an attorney for a former New Mexico pension fund officer should be sanctioned for filing a “baseless and scandalous” motion.

That motion, filed last month in the Santa Fe-based 1st Judicial District, sought to prohibit state agencies from entering secret financial settlements.

However, Assistant Attorney General Scott Fuqua and the outside firm, Day Pitney, claimed this week the State Investment Council never violated state law in its handling of a 2011 settlement reached with a California investment firm that was co-founded by a major political donor to former Gov. Bill Richardson.

The firm, Rustic Canyon/ Fontis Partners, paid $250,000 in the settlement, which was disclosed to the Journal this year in response to a formal records request.

The motion filed last month by former Educational Retirement Board investment official Frank Foy alleged SIC members were given faulty legal advice regarding the settlement by the Attorney General’s Office and the outside firm.

That was disputed by Fuqua and Day Pitney, who claimed Foy’s motion was based on faulty speculation. They asserted the SIC complied with the state’s open records law, in part by disclosing the settlement’s details when they were requested.

In addition, the attorneys claimed Foy’s lawyer, Victor Marshall, should be sanctioned by the court for filing a frivolous motion.

The backdrop for the legal sniping is a case Foy filed under the state’s Fraud Against Taxpayers Act that alleged widespread pay-toplay schemes at both the SIC and ERB. Since it was first filed in 2009, the Attorney General’s Office and the outside firm hired by the SIC have sought to take over portions of the case.