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Legislators want multiple NMFA reviews
The Roundhouse in Santa Fe (Photo by Heath Haussamen)
‘It is vital to get to the bottom of what happened and why as soon as possible,’ say the two lawmakers who head the NMFA oversight committee.
In the wake of a revelation that the New Mexico Finance Authority’s fiscal year 2011 audit was fraudulent, two lawmakers who head an oversight committee say they want multiple reviews of the situation.
The statement from Sen. Mary Kay Papen, D-Las Cruces and chair of the NMFA Oversight Committee, and Rep. Patricia Lundstrom, D-Gallup and the committee’s vice chair, follows a Monday emergency meeting of the NMFA board. At that meeting, some board members questioned the agency’s decision to hire a firm to conduct its own investigation into the matter.
That investigation would be in addition to a special audit mandated by the State Auditor’s Office and a probe by the state’s Securities Division.
With NMFA’s board meeting again today, Papen and Lundstrom said they want it all. Here’s their full statement:
“We, like all the citizens of New Mexico, were shocked and are deeply troubled by last week’s revelation that the NMFA’s 2011 audit of its financial results appears to have been fabricated. It is vital to get to the bottom of what happened and why as soon as possible.
“We were disappointed, however, by the tone of the debate at (Monday’s) open special Board meeting, over what we believe is a prudent and urgent plan by NMFA management to address the situation appropriately and in a manner best designed to reassure the national financial markets on which NMFA and all state agencies requiring external financing and access to the capital markets rely.
“Retaining experience and nationally respected independent legal experts to review the matter and to make recommendations for improvements is – in our view – a key step to restoring confidence in NMFA and, by extension, New Mexico. At the same time, we have great respect for the state auditor, and the Securities Division of the Department of Regulation and Licensing, and we believe it is important that their independent reviews proceed independently and in parallel with the review commissioned by NMFA.
“Simply put, the stakes for New Mexico and all of its citizens are too high. We strongly urge that the NMFA’s Board vote (today) to support NMFA management’s investigative plan and recommendation to retain Steptoe & Johnson’s Evan T. Barr, a respected, former federal prosecutor.
“We look forward to seeing the results of the state auditor’s investigation, the Securities Division’s review, and the independent review by Mr. Barr, as soon as possible, and to taking whatever recommended steps are necessary to ensure the public’s confidence in New Mexico’s finances.”
The stakes are high. Moody’s said Monday the NMFA was under review for a possible downgrade, and Standard and Poor’s has put it on the watch list.
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OK, it has been almost two months since this huge scandal erupted. It is clear the board and audit committee did not do their jobs. Why are they still in their jobs? Why hasn’t the Guv done something, anything, to fix the board and audit committee? Still “investigating”? Sorry not good enough, and soon our credit rating will be downgraded, why wait for that embarrassment when the Guv could show some accountability and responsibility since the board and audit committee she appointed will not?
Power corrupts and that’s true regardless of party.
On the other hand, if I was a Democratic party leader, I would as quietly as possible get
Richardson off of the schedule at the convention:
http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-from-the-mafia-20120620?page=5
Blame everything on Richardson is not the answer. The Governor is Susana Martinez, it’s under her watch this happened. Why has she not yet issued an executive order for all executive departments to become part of the ethics discussion.
“There is a problem in NMFA and it didn’t start last week.” This says it all about the NMFA with its long history of controversial wheeling and dealing under Richardson and his long time supporter, David Harris (who held several key positions related to state finances over the years). Nothing seems to have gotten any better with the NMFA.
Too bad these investigations won’t go back far enough to see what really happened. In any event, the NMFA needs a complete makeover, new leadership, and a change in the board membership. Or as Skeptic says, “Do we need a ‘NMFA’ at all?”
There are multiple aspects to investigations.
One is criminal prosecution.
One is recovering any lost funds and ending kickback giveaways.
But importantly for the future is fully understanding the mess and how we as a state and taxpayers should proceed.
I’m not intimately aware of all the legislative and legal issues, but I think the public gets a better education
and there’s less chance of corruption when these issues are in the open before bi-partisan legislative committees than
behind a governor’s closed doors.
Then we can inform the public ( including me ) and have the debate on:
Do we need a ‘NMFA’ at all?
Can we get regular oversight of all state funds ( retirement, project financing, etc. )
by the legislature and out of the corrupting control by the governor’s office?
For these aspects, I think the legislative investigations are a good thing,
Not sure of the value of the Reg and Licensing Securties Division investigation – they’re short of staff and have no experienced financial analysts – just former law enforcement-type investigators. There were once two CPAs on staff, but they were let go and it’ll be hard to undertake this type of investigation without knowledge of accounting. Probably should be left to Hector. He seems to know what he’s doing. And -just what is it that the legislative oversight committee does – is it a ‘name only’ committee. There is a problem in NMFA and it didn’t start last week.