Audit of Corrections employee finds conflict of interest

SANTA FE — The state Corrections Department audit for fiscal year 2016 released by the State Auditor’s Office last month says a former Corrections official had a conflict of interest with a production company that filmed a television show on prison grounds and waived a hefty fee without explanation.

But former Corrections deputy secretary and public information officer Alex Sanchez disputes the findings.

The audit, released Feb. 24, says a Corrections employee who temporarily left the department between October 2015 and March 2016 to work for Lucky 8 TV, a production company that produced the show “Behind Bars: Rookie Year” about first-time prison guards, but returned to Corrections and was “allowed to make the determination of the amounts to be billed to the production.”

The audit doesn’t mention the employee by name, per department policy, but State Auditor Tim Keller confirmed it was Sanchez. “The involvement of this employee in the determination of amounts billed and fees waived appears to be a conflict of interest as not all of the decisions appear to be in the best interest of the State,” said the audit. “No evidence was provided to support” the idea that anyone other than Sanchez made financial decisions related to Lucky 8, the audit says.

The audit also says emails between Sanchez and Lucky 8 reference a $20,000 fee that was waived. Other fees were waived, “but there was no tracking of these amounts, and the waiving of fees was in effort to ‘build the partnership’ between the Department and the production company.”

“They have no documentation to prove it’s OK,” Keller said Friday. “We wrote them up for being unable to justify that. There’s usually receipts, invoices or general counsel’s opinion. In this case there was nothing.” But Keller said there’s no evidence of criminal activity or that Sanchez did anything for personal gain.

Sanchez, now deputy superintendent of the state Regulation and Licensing Department, sent the Journal a statement Tuesday saying she was open about her employment with Lucky 8 and that she ran all her decisions by former Corrections Secretary Gregg Marcantel.

“After my return to Corrections from employment with Lucky 8 I had a very clear conversation with Secretary Marcantel to ensure there would not be a conflict on interest in the dealings with Lucky 8 productions,” she wrote. “That conversation included ensuring I would not be making decisions on any dealings with Lucky 8 and the department.” She said there was an agreement in place stipulating that decisions on fees were to be made by the Secretary of Corrections and his executive team. “There were occasions where I was asked to reach out to the company while serving as Deputy Secretary, but it was always done with Secretary Marcantel in the loop and sometimes at his direction,” Sanchez added.

“I personally met with the auditors to ensure I was 100% upfront and honest about my employment with Lucky 8, that I had no further business dealings with them, no financial interest in the company or the show, etc. I also shared my emails to showcase that all communication was above board and done with the Secretary’s approval.”

New Corrections Secretary David Jablonski released a statement Friday through spokesman Sita Mahesh. “We have been working with the State Auditor’s office in correcting all of the deficiencies,” Mahesh wrote. “We’ve started implementing — and in some cases have already implemented — corrective actions to address these findings. We will continue to work on this.”