Lobo Club subject to AG’s search warrant
Agents seize documents on Pit suites, club seats, along with donor information
Agents from the office of state Attorney General Hector Balderas have seized Pit suite records, club seat forms and other documents from the University of New Mexico’s Lobo Club as investigators continue their search for evidence of possible money laundering and violations of the state’s Government Conduct Act.
In search warrant documents filed in state District Court on Wednesday, Judge Charles W. Brown authorized a wide-ranging search and seizure of club records covering the period from Jan. 1, 2010, to June 30, 2017, as part of the AG’s inquiry into possible wrongdoing by former UNM Athletic Director Paul Krebs regarding Pit suite revenue that was uncollected over a period of years and a 2015 Scotland fundraising golf trip.
In executing the search warrant, agents also seized courtesy car docu-
ments, donor information, bank reconciliation records, Finance Committee minutes, donor lists, cassette tapes and other electronic and financial records, according to the search warrant return.
Lobo Club officials told the Journal in a statement that they are cooperating with authorities. The Lobo Club is a registered 501 (c) 3 tax-exempt entity tasked with generating revenue for athletics and cultivating donors.
“(Tuesday) morning the Lobo Club assisted the Attorney General’s Office with a previous and ongoing investigation it is conducting,” the statement said. “The Lobo Club is not the subject of the investigation but fully cooperated by providing any and all materials requested that would be helpful to their search.”
A spokesman with the Attorney General’s Office confirmed agents had served a warrant at the Lobo Club’s office near Dreamstyle Stadium but did not go into further detail about the investigation.
“We are continuing our highly active investigation into financial transactions at UNM and we will provide the public with updates as we are able,” David Carl, spokesman for the Attorney General’s Office, said in a statement.
UNM athletics and the Lobo Club have come under intense scrutiny in the past year after university leaders discovered payment for use of 24 suites in the Pit had gone uncollected, some since the 2010-11 basketball season, to the tune of $432,000. The revelation came amid a pair of state investigations into spending and fundraising for the UNM athletics department, as well as records requests from journalists.
The Lobo Club is responsible for selling the suites and collecting the payments.
The relationship between the athletics department and the Lobo Club is murky. The Lobo Club is technically a separate legal entity, although it operates under a memorandum of agreement with the university and the UNM Foundation.
But the affidavit alleges that, in certain instances, Krebs sidelined Lobo Club employees who were trying to collect money owed for Pit suite rentals.
The Lobo Club had authority to deny tickets to smaller donors, but the club was told not to contact certain “higher end” donors, the affidavit states, The affidavit also says that when told those donors were delinquent, Krebs would state, “I’ll handle it.”
The final decision to collect the funds was in Krebs’ hands, the affidavit states. People interviewed by authorities said there was a small list of donors identified in a club database as “Paul Krebs Only,” meaning they were only to be contacted by Krebs.
The affidavit also alleges that Krebs received a handful of tickets that he would deliver at his own discretion. Some of those tickets were given to suite-holders who were past due on suite payments.
According to the affidavit, Krebs delivered the tickets with the expectation that the suiteholders would not withhold larger donations to other areas of the athletics department.
Gene Gallegos, a Santa Fe attorney representing Krebs, did not immediately return a phone call requesting comment late Wednesday.
UNM leaders have acknowledged that some users may never even have been billed. While some suite-holders have since paid, the university has determined $184,027 is uncollectable “due to a lack of contract, sales invoice or other supporting documentation indicating a valid sale,” according to a UNM Internal Audit report released in May.
Documents previously obtained by the Journal show some communication between Krebs and the Lobo Club about collections.
In April 2017, Krebs sent an email to former executive director of the Lobo Club Kole McKamey and two other Lobo Club employees asking them to start collecting past due money from suite-holders.
“I want a concerted effort to collect all past due money for suites and club seats from previous years,” Krebs wrote in the email. “Have we taken anyone to collections?”
The latest search warrant comes as president Garnett Stokes and athletic director Eddie Nuñez have presented a reorganization plan for the Lobo Club that they say would streamline and better direct the organization. Under their proposal, all Lobo Club staff would be UNM employees — rather than a mix of UNM and UNM Foundation employees — but the club would maintain its status as a private not-for-profit.
The structure would give Nuñez more say in the staff’s day-to-day activities, but he contends that any major decisions — including major expenditures — would still require the approval of the board’s executive committee and possibly others inside UNM.
Bart Kinney, Lobo Club board president, has told the Journal that the organization’s executive committee approved the recommendations with only a few requests, including that UNM fill some of the existing staff vacancies within the organization. The plan should go before the full board in January.
The new affidavit also references the now-infamous golf fundraising trip to Scotland, where the university used about $25,000 in public money to pay for some donors’ expenses for the trip. The Lobo Club paid the deposit for the trip.
According to the affidavit, the Lobo Club had “never been asked to help with funds for a trip like this before and had never ‘fronted’ money for any fundraising effort before.”
The affidavit states that “it is unknown why an entity whose purpose is to pay for studentathlete scholarships would pay the deposit for the Scotland Golf Tour.”
Krebs, former men’s basketball coach Craig Neil and McKamey went on the trip at university expense, according to the affidavit.
This is at least the fourth search warrant executed in connection with this investigation.
The previous three have focused on a $25,000 donation made to the UNM Foundation to cover losses UNM sustained for the trip.
Krebs announced it as an anonymous gift and high-ranking Foundation officials had previously refused to identify the donor. But the AG’s Office investigation has identified Krebs as the donor.
Balderas launched an investigation into UNM in May 2017 after media began uncovering and reporting the details about the Scotland trip. He has continuously broadened its scope and said in August that there is no timetable for its conclusion.