Impostor stole $35K as City Hall was asleep

Chronically late audits aren’t the city of Santa Fe’s only financial failing. An impostor fooled the local government and apparently scammed taxpayers out of more than $35,000, City Manager John Blair told me Tuesday.

The crime was a simplistic but effective shell game. It could only work in a city with inattentive financial managers.

Blair and City Councilor Signe Lindell provided me with a bare-bones account of what went wrong.

A charlatan claimed to be a vendor who does business with various city departments. The impostor in unspecified fashion asked that money owed to him by the city be deposited in a new bank account.

Blair said three payments were sent to the account created by the fictitious businessperson. City administrators discovered the deception only after the real vendor complained he had not been paid.

Both Lindell and Blair described the case as “potential fraud.”

“I used the term ‘potential’ because the investigation into the matter has not yet concluded,” Blair said.

Whether the investigation is ongoing doesn’t change the fact that the city paid $35,000 to a con artist.

The thief could have been thwarted if employees of the Finance Department had checked with the real vendor before sending money to a previously unused account. Due diligence was no more than a phone call away.

It appears the only effort expended in this case was by the phony businessperson. He or she had to know a good deal about the vendor and city government to set up the crime.

Having been outmaneuvered by a crook, Mayor Alan Webber’s administration is left to play catchup. Webber’s team has informed the Santa Fe Police Department and the state Auditor’s Office of the scam.

Blair said city councilors were made aware of the fraud case through an email May 18 from the city Finance Department, headed by Emily Oster.

Not a word was said to the public that pays the bills and, in this instance, supplied money that went to the scammer. A tipster contacted me, and I called Blair and several city councilors to ask them about a grifter making off with taxpayers’ money.

Webber promised to run a transparent government, revealing warts and all. It turns out, warts surface more often than sunlight, especially in the Finance Department.

It has yet to complete city audits for the last two years. Councilor Michael Garcia is frustrated enough by the delays, he plans to propose a new system in which the Finance Department no longer would handle audits.

His idea is to create a city Office of the Inspector General. The agency would assume responsibility for audits, and it would investigate complaints of fraud, waste and abuse.

The Office of the Inspector General would be independent of the city manager, probably reporting to the eight-member City Council, Garcia said in an interview.

Creating another agency to upgrade the city’s financial accounting system won’t be easy.

Garcia’s proposal is more than an attempt to improve an inefficient

government. It’s a slap at Webber and his top administrators for the missing audits and other financial foul-ups.

Garcia would need support from five of the nine members of the governing body to put his proposal on the fall ballot. He says he believes he has the votes of four city councilors, himself included.

The other four councilors are usually aligned with Mayor Webber. Garcia hopes to win them over with a straightforward appeal.

“Public confidence in city government is definitely not there. We need to be better,” he said.

If Garcia’s proposal makes the ballot, he’d still have to sell it to a skeptical public. Few would defend a Finance Department that has shown no respect for deadlines and no track record of accountability.

Still, Garcia would face a hard question: Is there any guarantee a newly created city agency would be any better than the foundering Finance Department?

“We’ve got to do something. The process we have is not working,” Garcia said.

Providing basic services is Webber’s weak suit, and the Finance Department might be his least efficient department.

An ongoing mystery is why city government’s financial audits are in disarray. Santa Fe is not a destitute city or a backwater with no access to talented people.

Yet residents haven’t received audits that would flag deficiencies in city finances. What should be a routine part of government is a missing link that encourages rumormongering about whether the books are clean.

It’s no wonder Webber, Blair and the rest didn’t tell the public about a crook who outfoxed city employees. Now that the scandal is in the open, they insist on calling theft “potential fraud.”

What would a transparent government call it? Gross negligence carries the ring of truth.

Ringside Seat is an opinion column about people, politics and news. Contact Milan Simonich at msimonich@sfnewmexican.com or 505-986-3080.