Probe of auditor’s office resurfaces
Ayears-old criminal investigation of the office of state Auditor Hector Balderas has become an issue for Balderas in his bid to succeed Gary King as state attorney general.
The investigation by King’s office didn’t result in any charges, and a state District Court judge ordered court records and other related documents sealed from public inspection, citing a state law requiring grand jury secrecy.
Balderas, auditor since 2007, announced Tuesday that he will seek the Democratic nomination for attorney general in the primary election next year. King, attorney general since 2007, is vying for the Democratic nod for governor.
In response to Balderas’ announcement, Chris Jankowski, president of the Republican State Leadership Committee, issued a statement that said in part:
“This, of course, is the same State Auditor Balderas who has been investigated by the attorney general for misuse of state funds for personal gain. The people of New Mexico deserve better.”
The Republican State Leadership Committee works nationwide to get Republicans elected to state offices. New Mexico GOP Gov. Susana Martinez has close ties to the group.
Although court records and related documents concerning the investigation of Balderas’ office have been sealed, we know some things about the investigation from a grand jury subpoena and other documents that were made public several years ago.
Several more documents were recently provided to me by the Attorney General’s Office in response to a request under the state Inspection of Public Records Act.
In the fall of 2008, an anonymous person telephoned the hotline operated by the Auditor’s Office and reported that Balderas used an office employee as a babysitter while on government time, that the Auditor’s Office had purchased equipment for an office that didn’t exist and that the Auditor’s Office had improperly required employees to use a time clock.
Because the allegations related to the Auditor’s Office, it forwarded the information to the Attorney General’s Office and the State Personnel Office.
Correspondence between the offices of the auditor and attorney general show Balderas’ office was concerned early on about the allegations being disclosed to the news media. It provided documents to the AG’s Office and wrote a letter discounting the accusations.
“We are confident that upon your review, the facts will demonstrate ... that there are no grounds to support any of the allegations,” said the letter, dated Nov. 26, 2008, and signed by Antonio Corrales, then chief of staff to Balderas.
Over the next few months, the relationship between the two offices deteriorated.
In a letter dated Jan. 8, 2009, to the AG’s Office, Corrales objected to AG investigators setting up a meeting with an auditor employee outside of the office .
Corrales also complained the Auditor’s Office hadn’t been notified that the investigation had been broadened to include other issues.
Over the next couple weeks, the AG’s Office requested records related to the auditor’s head of special investigations, an office contract with a marketing and advertising firm, case logs, a training conference attended by employees, Balderas’ use of a state vehicle and files of former employees, including an ex-public relations intern.
By Jan. 15, 2009, the Auditor’s Office had retained a private lawyer to represent it and advised the AG’s Office that all further requests for information or employee interviews needed to be directed to the outside counsel.
In a letter to the Auditor’s Office dated Jan. 27, 2009, Chief Deputy Attorney General Al Lama made it clear that AG’s inquiry into the hotline tips had grown into a criminal investigation involving other issues.
Lama wrote to Evan Blackstone, general counsel for the Auditor’s Office:
“I understand that you and the OSA (Office of State Auditor) ‘do not consider this matter appropriate for a criminal investigation.’ With all due respect, that is not the OSA’s decision to make.”
About that time, the AG’s Office served the Auditor’s Office with a grand jury subpoena for documents.
In a letter dated March 3, 2009, to the AG’s Office, the auditor’s private attorney, John Boyd, said the office wouldn’t comply with the subpoena because it was unlawfully issued, intruded on the legal duties of the office and was burdensome.
Boyd said the subpoena covered virtually every electronic communication and document in the possession of the Auditor’s Office.
“This is far broader even than a fishing expedition ... ,” Boyd wrote. “The OSA is not prepared to allow the AGO to simply rummage through its files.”
Boyd said that complying with the subpoena would conflict with the auditor’s responsibility to investigate the expenditure of state funds, including allegations it had received about the AG’s Office.
Boyd also reminded the AG’s Office of the law requiring grand jury secrecy. He wrote:
“While it is quite clear that the OSA has nothing whatever to hide, New Mexico law entitles the OSA to be free from the type of entirely unwarranted, negative publicity that might spring from public knowledge that you have served it with a grand jury subpoena, no matter how unreasonable and ill-advised the Attorney General’s decision to do so was.”
A few weeks later, Boyd wrote another letter to the AG’s Office complaining that it had contacted an auditor’s employee directly for an interview rather than going through him and Blackstone.
Boyd said previous interview requests were declined after the AG’s Office said it was conducting a criminal investigation and refused to identify the subject matter. The AG’s Office had requested to interview Balderas and at least three others in the office.
The investigation became public a couple days later when the Journal reported on the subpoena and the refusal of Balderas’ office to comply. The Auditor’s Office had provided a copy of the subpoena in response to an open-records request from the newspaper.
The legal wrangling between the AG’s Office and Balderas led to closeddoor hearings in state District Court, then the state Appeals Court. The two sides resolved the matter in June 2011 but exactly how and why remains a mystery.
In addition to sealing the court records, then-District Court Judge Michael E. Vigil sealed certain correspondence and other documents held by the Auditor’s Office because the records tended to identify matters related to the grand jury subpoena.
When the matter was resolved, Balderas said he looked forward to strengthening his relationship with AG King. King had this to say: “I am concerned that he (Balderas) thought when he referred it to us that since we were both Democratic state elected officials, that somehow that meant I would do a cursory review of the allegations and just say, ‘No, we didn’t find anything,’ but that’s not the way we operate.”