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Is this political corruption or an ethical lapse?
The Roundhouse in Santa Fe (Photo by Peter St. Cyr)
Big campaign contributions from a man whose company won a $30 million investment contract from the state should cause New Mexicans to view Diane Denish with skepticism
Earlier I suggested that Diane Denish is unfit to be governor if she has lacked the courage to point to corruption within the Richardson administration, and say “No” (Albuquerque Journal, July 5). But there are other questions about Denish that linger. One is whether Diane Denish herself has been complicit in corruption, or if not in corruption, in unethical practices. In regard to this second matter consider the following:
In December 2005 a Mr. Leo Hindery Jr., who is a principal in InterMedia Partners, donated $25,381 to Bill Richardson. Five months later, on May 23, 2006, the State Investment Council approved for investment a commitment of $30 million to Mr. Hindery’s InterMedia fund. Thereafter, on June 23, 2006 — a month to the day after the $30 million approval by the State Investment Council — Hindery gave a $25,000 donation to Diane Denish. Later, he gave additional $25,000 donations to both Richardson and to Denish.
Who recommended the investment in InterMedia? A fellow named Saul Meyer.
On April 12, 2006 the state’s Private Equity Investment Advisory Committee (PEIAC) had met with the principals of InterMedia, including Hindery. “Saul Meyer of Aldus Equity Partners was also present and recommended for investment a commitment with (the) InterMedia (fund),” according to the minutes of the meeting. Then PEIAC recommended the $30 million investment in InterMedia to the State Investment Council. And, on May 23, 2006, the council committed that investment, according to the minutes of that meeting.
Why does it matter that Saul Meyer was involved? Well, Saul Meyer recently pleaded guilty in New York State to defrauding the New York State Common Retirement Fund (CRF). Meyer was a founding partner of Aldus Equity and was indicted for paying illegal kickbacks to a politically connected individual who could guide CRF investments to Aldus.
It appears that Myer was playing much the same game in New Mexico. Aldus, his company, also acted as an advisor to our State Investment Council. In his New York guilty plea, Meyer admitted that on numerous occasions, contrary to his fiduciary duty to our State Investment Council, he ensured that Aldus recommended investments that were pushed on him by politically-connected individuals in New Mexico, knowing that these politically-connected individuals or their associates stood to benefit financially or politically from the investments.
So, here you have an example of Richardson and Denish each taking approximately $50,000 in political donations from a fellow who, at approximately the same time, secured for his company a $30 million investment from our State Investment Council. And to boot, you have a recommendation for the investment from Saul Meyer who, in his guilty plea, said that he recommended investments in New Mexico that would benefit politically connected individuals.
Pay to play?
Is this “pay to play” unveiled, evidencing that Denish and Richardson are wrapped in the same corruption package? Perhaps. But, we need more information to know for sure — information which probably can be secured only by law enforcement officials armed with subpoena power.
However, Denish’s taking $25,000 from a man whose company, a month earlier, received a $30 million investment from the State of New Mexico, should cause New Mexicans to view Denish with skepticism.
Because of the evident corruption under this administration related to placement of investment funds, the State Investment Council recently promulgated a “Transparency and Disclosure Policy.” Under that policy, recipients of investments from the council are prohibited from making campaign contributions to elected officials who may have influence over the council. Of course, had the policy been in effect in 2005 and 2006, the donations by Hindery to Richardson and Denish would have been prohibited. But, the rule wasn’t in effect.
However, if this recently promulgated policy by the State Investment Council is a statement of what is considered to be ethical, and what is not, then Ms. Denish had an ethical lapse when she took more than $50,000 from Mr. Hindery, half of which came only a month after the State of New Mexico placed $30 million with Mr. Hindery’s company.
In a recent interview, Diane Denish stated that New Mexicans are looking for “a new day and new way…” The reporter wrote, “Denish is counting on New Mexicans to view her independently from Richardson and whatever questions might linger over his administration” (Michael Coleman, Albuquerque Journal, Dec. 6).
If she were elected governor, perhaps Diane Denish would lead us to a “new day and a new way.” But, then again, maybe not.
Yates is chairman of the Republican Party of New Mexico.
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hyates wrote, “… In regard to the comments posted by Wedum59, I believe it to be inappropriate for a Texas judge to take a contribution from someone whose case he is to hear. Likewise, it is inappropriate for a Texas donor to give a contribution to a Texas judge who will hear his case. Now, what that has to do with donations made by Perry to Republican candidates in New Mexico is unclear. …”
To clarify: hyates admits that Perry made inappropriate contributions to Texas judges. Perry has also made contributions to NM GOP candidates. Knowing his lack of scruples in TX, it seems to me that an ethical NM GOP candidate would not wish to become beholden to such a person–would not wish to be part of extending the influence of such a person into New Mexico.
Perry built a housing development on unstable ground (Mt 7: 24-27). When Bob and Jane Cull sought redress for the damages to their ‘dream house,’ Perry did not take responsibility. Was there no environmental study? And don’t say that he followed the law, we are seeing clearly, in the current health care reform debacle, how powerful special interests can bend the law to suit their own profitable ends.
Perry has given over $21 million in contributions to politicians, but fought against paying a mere $800k in damages to the Culls. Would a GOP candidate, if elected with his help, turn a blind eye on a Perry housing development built on sand in New Mexico?
Again turning to the book of Matthew, 7:1, “Judge not, that ye be not judged.” (This is part of the Sermon on the Mount, BTW.) Before you throw any more stones at Denish, look to your own house.
And where are the financial disclosure statements from the NM GOP gubernatorial candidates??
In regard to the comments posted by Wedum59, I believe it to be inappropriate for a Texas judge to take a contribution from someone whose case he is to hear. Likewise, it is inappropriate for a Texas donor to give a contribution to a Texas judge who will hear his case. Now, what that has to do with donations made by Perry to Republican candidates in New Mexico is unclear. If the claim is that the candidates were in a position to influence the outcome of a New Mexico state contract, the beneficiary of whom was Perry, then Wedum59 has discovered a relationship comparable to the one I pointed out which existed between Richardson, Denish, and Hindery, and I will join Wedum59 in condemning it. Wedum59 should enlighten us with his evidence. Of course, he/she can’t because it doesn’t exist, and, likely, Wedum59 is blowing smoke to disguise the real issue which is that there was either corruption or an ethical lapse on the part of Denish.
For my part I do not object to Richardson and Denish having received large donations from Hindery. I object to their having received donations from Hindery and then, at approximately the same time, Hindery’s company having received a large SIC investment over which Richardson and Denish may have had influence. The former would involve the exercise by Hindery of his 1st Amendment rights, the latter smacks of possible corruption.
JBaca16, (likely, former State Land Commissioner, Jim Baca) asks that I comment on Yates Petroleum and the State Land Office. OK, I’ll comment. I do not have, nor have I ever had, an interest in Yates Petroleum.
Further, as Mr. Baca knows, the business which companies, such as Yates Petroleum, conduct with the State Land Office is to acquire and then drill on state oil and gas leases. Those leases are acquired at public auctions. Mr. Baca additionally knows that, like other competitors in the auctions, Yates Petroleum often makes losing bids at those auctions. A contribution to Pat Lyons, or any other Land Commissioner, is not going to change that.
Additionally, there has been no suggestion, of which I am aware, that pressure from the Land Commissioner’s Office has resulted in the corruption of the oil and gas lease procurement process. If Mr. Baca is aware of such a problem, he should educate us. In the meantime it is nonsense to suggest a comparison between the State Land Office’s transparent, public auction process and the closed door State Investment Council process under which, in the example in hand, InterMedia received a $30 million investment from the state upon the advice of Gary Bland and Saul Meyer, one of whom, apparently, is under investigation and the other of whom acknowledged, in his New York guilty plea, that in New Mexico he recommended investments which were pushed on him by politically connected individuals.
Harvey Yates, Jr.
Wow, does any of this surprise anyone? We live in a state with a corrupt government and the only real thing being discussed is “well…they did it too.”
Wake up New Mexico! Wake up America! We are being sold for political gain. Why isn’t the outrage over… this is happening in our State and were tired of it? Regardless of the political party? Anymore the only thing that matters is the fight and name calling/blame game and being reelected. (I’m sure its mostly W’s fault anyway)
I want a NM law that says if your accused of corruption or unethical decisions you have to face trial. No fancy private lawyers; public defenders (both sides) and a randomly selected jury from across the state of New Mexico. If your found guilty you forfeit your office/any further chance of office and you get jail time. That’s it! If there were consequences for actions they might think twice. Maybe harsh but these are representatives of the people and should be held to a higher standard.
I don’t know, maybe I have had too much coffee today but man I am tired of it.
Why do we as citizen of this beautiful State put up with it? (I don’t care which party it is either – if your corrupt your out!)
For all her talk on ethics and transperency, Denish sure does have a lot of monsters in her closet. If she really is ethical and transparent, she should return all the money and remove any doubt from the voters minds. Until then, she is just another Bill Richardson cashing in on her position.
Mr. Baca –
It would also be great to have a mole all over the capitol building!
At last I remember, individuals from CDR were indicted on federal charges. I don’t think Yates Petroleum has.
Plus, I’m not sure what Yates Petroleum would have to gain from the White’s Peak “Swapgate” Democrats have been up in arms about.
Personally, I think it is simply a PR distraction from all of the years corruption the media is beginning to uncover after 70 some years of Democratic rule in this state.
So, Diane Denish purports to be New Mexico’s first lady of ethics reform and transparency and it comes out that she got 50,000 in campaign contributions from someone who gained a 30 million state investment? I smell a scandal.
If she were innocent, seems like she would be chomping at the bit to explain this questionable transaction. Also seems like she should be giving back a cool $50k in order to live up to the squeaky clean image she tries to portray.
First she explains away a misuse of fed stimulus funds as a clerical error–now this comes out. Sheesh!
These pay-to-play escapades could easily be flushed into the light. It would not take law enforcement subpoena powers. All it would take would be systematic review of state spending and state campaign contributions.
Those systematic reviews are not happening because the state refuses to release the data, despite laws that require data to be made public. Part of the problem is the state’s press corps–at the managerial level–refuses to back up reporters’ efforts to enforce open records laws with regard to databases.
On Jan. 1, Lt. Gov. Denish’s name appeared at the top of a press release advertising a new “database” that ostensibly makes all state contracts valued over $20,000 available for public inspection. Never mind that the Lieutenant Governor and gubernatorial candidate had only the most tangential role in producing the databases. Why not a press release from the Department of Information Technology? Or from the office of the governor’s whose name won’t appear on an upcoming ballot?
The portal announced Jan. 1 that provides the public access is all but worthless for investigative purposes. One must know the name of each contractor or details of a contract one wants to investigate before information is exposed, piece by piece.
Because managers in New Mexico media have failed to hire or retain digital-savvy reporters, nobody in the working press figured out that the “portal” was not a real database, but in fact a “Controller” that provides very limited “Views.” The “Model” is the database. Anybody among the thousands of digital savvy tech workers in New Mexico who know the first thing about the “Controller-Model-View” approach to data management know exactly what I’m talking about.
Digital investigative reporting requires a digital-savvy reporter to obtain the raw data – the “Model”– then to create automated processes — queries — that compare features in the data with features in another data set. The other data set would be state campaign finance data. That’s how you match names on contracts with names on campaign finance reports.
A third dataset – the Secretary of State’s corporation data – could provide names of individuals or companies that might relate to individuals or companies in either the contractors or campaign datasets. That’s called “triangulation.” In New Mexico, it is currently illegal to electronically triangulate public data to find potential patterns of corruption.
Legislators recently passed laws requiring each of those datasets to be made available to the public. The contracts database law was approved unanimously by both the house and the senate. A recent campaign finance law required campaign finance records to be made available in an “easily searchable format” online.
Instead of asking digital savvy reporters what format would be easily searchable – which would mean I can search List A for all the names on List B and have results in a few seconds – executive agencies created data portals that control the public’s view of the data.
Data portals can be useful to some people who have no need to search massive volumes of data. But if its the only way we can get access to the data, they are useless for investigative reporting. They control our view of the data, when what we investigative reporters need is to control our own view of the data.
Why not just ask for the raw data? Because another state law, dubbed the “Open Records Act” (NMSA 14-3-15.1) makes it illegal for state officials to release public records in electronic format unless they charge a royalty (not the cost of copying, but a profit in addition to actual costs), get a signed statement allowing state officials to review whatever reports are produced from that data, and a signed statement in which reporters agree not to redistribute the public records. That means I cannot get the raw election data and the raw campaign data then set up my own portal where you the reader can conduct comparative searches.
To be fair, Denish’s Jan. 1 press release coincided with the legislative mandate that the database be made available by Jan. 1. But the holiday release virtually guaranteed that news organizations starved for stories while staff was out on a holiday weekend would run the press release as is, without asking questions of experts who could expose how the portal was not in fact a database, but instead was a very narrow doorway to a database the state has not otherwise made available. The raw data could be available as a simple download. One click could put the entire dataset behind the portal on users desktop within a minute or so.
In so far as the state has not provided that one-click access to the raw contract data and to the raw campaign finance data, they are in violation of state law. The Public Records Law, NMSA 14-3-15.1, which allows the state to exercise prior restraint over reporter’s stories and to charge an extra tax for reporters who want to use public records is unconstitutional on its face. The Foundation for Open Government and all of the major media in the state have refused to challenge those laws.
Its time to put a stop to this industry of speculating about whether their might be corruption or not. That is not the way to do news reporting. Media companies need to stand up and ask the courts to enforce the law, and to overturn unconstitutional laws that prevent inspection of public records using modern technology. I know some reporters have taken firm stands against companies that refuse to do their job as public watchdogs.
It’s time for the working press to close ranks and demand full access to all state records that are stored in electronic format. Another legislative session in which timid media companies cower with their sources to pass ineffectual sunshine laws that only further cloud access to public information will only assure continued public business in the shadows, and a continuation of speculative journalism that does little good but to aggrandize the reputation of those who play guessing games about who might have known what when.
State officials and most statewide media managers in this state know who posted this comment because so few media professionals have any information about data management, those of us who do stick out like a sore thumb. The one who has consistently demanded that an employer and state officials open our state’s records is well known among those involved. I urge my peers to stand with me. My name does not appear here because I’m not out to build a reputation. I want the data. I just want to do my job and do it right.
Personally, I would like to see a (US) constitutional amendment that limited the donors to PACs and candidates to real US citizens who are registered to vote. Then limit the amount that can be donated to the equivalent of one week’s (gross) pay at minimum wage (that would be about $300 at present)… Per election cycle, or per year maybe.
Let’s also limit PACs and all organizations (for-profit and non-profit) to holding candidate forums and/or publishing their views in a Voters handbook, like the ones published in Oregon and California.
Then limit active campaigning time to six weeks before each election. There is far too much money and effort spent on campaigning, it would be better spent on drafting good legislation.
And yes, I am very disappointed with Richardson, but mainly because of his refusal to support repealing the 2003 tax cuts for the rich. He has not been indicted for pay to play.
Maybe Mr. Yates should talk a little about his own contributions and fund raising for Republican Land Commissioner Pat Lyons. Talk about a direct conflict of interest! It would be great to have a mole in the Land Office to do a little digging on all the favors Lyons has done for Yates Petroleum.
Where, except on an Elementary School playground, is “everyone else is doing it” justification for doing something wrong?
Is it really OK for democrats to do it, if republicans did. If so, then it follows that republicans can do it because democrats have.
According to that logic, we can never turn the page on the buying of influence; because there will never be a time when there isn’t someone else doing it.
In adding to the corruption question, these contributions have been made to SITTING elected officials. Richardson and Denish have been dually elected by the people of this state.
Sure, all contributions should be examined in an election. But shouldn’t we hold the people that have actually been elected and are sitting behind the drivers seat with our checkbook be held to a higher standard?
Perhaps wedum59 missed the underlying message of Mr. Yates commentary.
Need For More Investigation
According to Wedum59, to give contributions without lucrative returns should not be allowed, while at the same time it is all right for Diane Denish to accept huge contributions from a person who received a $30 million dollar contract, over which she may have had a lot of sway. The law says it is allowed to give contributions to any candidate that they have not been favored by, or words to that effect. I don’t believe Perry was favored by anyone before the fact or after.
The Supreme court used its discretion to turn the case back to the local courts. In a case that involves that much monetary value arbitration is in most cases disallowed. Where was the wrong in the contributions Perry made. He is a conservative backing the party he believes in, where Denish is accepting money from a person she may have been instrumental in awarding a lucrative contract. I would say there need be more investigation into how and who was pushing for the award to be given to this person and was Denish in favor of him getting it to the extent of using her position to forward it.
Wedum59 seems to be a liberal, but at the same time he is not looking at the true facts of the cases. To call one wrong and the other right is acting on supposition on both parties, Perry and Denish. The way I read it Wedum59 would promote the idea that no candidate for any office be allowed to use anything but their own money. In that order, only the rich could serve in office.
Wedum makes an interesting point – those Texans … always doing something with their money, and I’m shocked to know the Texas Supreme Court is acting like a bunch of New Mexican judges. Just goes to show that, like Patsy Madrid opined, money opens doors (I guess). Glad she didn’t bring up George Soros – I’d hate to know what he has done. Having said all that … since Wedum was silent on the issue … the corruption of the Richardson administration is ok?
Perhaps Mr. Yates would like to discuss the contributions made to NM Republican candidates by Texas developer Bob Perry, who was involved in litigation concerning a “dream house” he built–the case was heard by the TX SC, whose members he had made heavy contributions to. Wonder what, or who, he is contributing to these days. Info from http://www.clearlynewmexico.com/?p=1288
In 2008, Perry wrote campaign checks to the New Mexico Republican Party totaling $240,000. In the 2006 cycle, the Bob and Doylene dropped a total of $361,000 into the state — to the following beneficiaries:
Vickie Perea, Republican Secretary of State candidate – $125,000
Jim Bibb, Republican Attorney General candidate – $75,000
NM Republican Party – $70,000
Demesia Padilla, Republican State Treasurer candidate – $50,000
Isaac Chavez, Republican State Rep. Candidate, Dist. 36 – $30,000
Lorenzo Garcia, Republican State Auditor candidate – $10,000
Nora Espinoza, Republican State Rep. Candidate – $1,000
Oh, and in 2002, Perry gave NM Republican gubernatorial candidate John Sanchez a cool $250,000.
More from the web page:
… since 2006, Bob Perry has contributed more than $21 million to political candidates and judges — including the nine Republican justices who make up the Texas Supreme Court.
“They all took money,” Wheat (research director of Texans for Public Justice) says. “Not a single member of that court should have sat and heard a case involving Bob Perry Homes.”
Six years after winning in arbitration, the Culls’ $800,000 award was thrown out. In a 5-4 decision, the Court disallowed arbitration and sent the case back to the courts.