Former Cabinet secretary testifies in Griego trial
Bemis says ex-senator talked about state property sale year before signing as broker
Although former state Sen. Phil Griego didn’t sign a contract as broker on the sale of state property to a downtown Santa Fe hotel owner until March 2014, he began talking up the deal with a former state Cabinet secretary about a year earlier, according to testimony Wednesday in Griego’s trial on corruption charges.
That sale of real estate in a historic neighborhood south of the state Capitol — and the $50,000 check Griego was paid for his role — led to a long list of criminal charges against Griego that are the subject of a trial that began this week in Santa Fe.
John Bemis, a former secretary of the state Energy, Minerals and Natural Resources Department, testified that he ran into Griego, a Democrat from San Jose, at the Capitol as the Legislature’s 2013 session was coming to a close. Griego told him that the Seret family was still interested in buying the De Vargas Street property to expand its nearby Inn of the Five Graces.
Bemis said that before he encountered Griego in March 2013, it had been months since he gave much thought to the property, which his department owned. Just six months earlier, in September 2012, his agency had negotiated a 25-year lease with the corporation owned by the Seret family. But
the property would not be Bemis’ concern much longer.
“I let the senator know that I was retiring, and that was the end of our discussion,” Bemis said.
And indeed, Bemis retired about a month later.
The department had been divided for years about selling the old adobe building. Bemis described the hardwood floors and the fireplaces. It once had been the headquarters of the State Parks Division, he said. In recent years, it had been used for the division’s marketing team as well as the Youth Conservation Corps, Bemis said.
Both he and the State Parks Division director at that time, Tommy Mutz, were dead-set against selling. Mutz’s father had been a State Parks Division director who had worked out of the building, Bemis said. “I thought it was a historical building,” he said. “I thought it would be good to keep it as an asset for the state.”
So Bemis decided to lease the property rather than sell it. In early 2012, the department put out a request for proposals. The only response came from the Serets, who proposed buying it rather than leasing. The department put out a second call for lease proposals and, again, only the Serets responded.
They negotiated a long-term lease that called for just over $3,000 a month for rent and $250,000 in improvements. The hotel would be responsible for maintenance. And there was a provision saying if the state ever decided to sell the building, the Serets would have the right to purchase it before any other potential buyer.
After Bemis retired, his successor, David Martin, was more open to selling the property, former Deputy Secretary Brett Woods testified.
Woods, who retired in May, had long argued that the department should sell the building. He was so adamant about selling instead of leasing it that he declined to sign the lease agreement in 2012.
Though Bemis said the property was an asset the state should keep, Woods said the building — actually three old adobe houses that had been joined together — was in a “sad state of repair” and had serious structural problems.
And there was a provision in the lease he didn’t like: If the building became “uninhabitable,” the Serets would have the right to back out of the lease, leaving the state holding the bag.
Both Bemis and Woods testified that Griego didn’t try to pressure them into supporting the sale.
Prosecutors with the state Attorney General’s Office on Wednesday introduced handwritten notes from Mutz, then director of the State Parks Division, who expressed concern about Griego’s involvement while the land sale proposal was still going through the state Legislature in 2014.
“I told him that I had a fundamental problem with Sen. Griego pushing this through for personal gain,” said the notes from Mutz about a conversation he’d had with Woods. According to the notes, Woods responded that Mutz should “get over it” because “we’ll both be dead in 20 years and it won’t matter.”
Mutz is expected to testify Thursday.
Woods said Griego never told him that he was the broker in the deal. He didn’t realize Griego had a financial stake in the transaction until months later, when a Senate ethics committee began investigating Griego’s role. That investigation led to Griego resigning from the Senate a week before the end of the 2015 legislative session.
By late 2013 Griego — still months away from signing his contract with the Serets — was working on the legislation necessary for the property sale. Gordon Meeks, a retired bill drafter for the Legislative Council Service, said Griego came by his office a few days before Christmas that year and asked him to draft a joint resolution calling for the sale.
Later, Griego told him that Rep. Jim Trujillo, D-Santa Fe, would be the resolution’s sponsor.
Meeks said it’s not unusual for lawmakers to get the ball rolling on a piece of legislation before handing it over to another sponsor. “Frequently they don’t feel it would have a good chance of passing if they [sponsored] it, so they get somebody else,” Meeks said.
Griego, 69, faces six felony charges, including counts of fraud, bribery, perjury, unlawful interest in a public contract and violation of ethical principles of public service. He also is accused of two misdemeanor charges of violation of ethical principles of public service and failure to make required financial disclosures.
The trial is expected to resume at 8 a.m. Thursday.