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Frank Foy, right, and his attorney, Victor Marshall, left. (Photos by Trip Jennings)
ALBUQUERQUE — A former state investment officer on Tuesday named David Contarino as the state government official who exerted pressure to award contracts and make investments that would reward political campaign contributors of Gov. Bill Richardson.
The unsealing of Contarino’s name in a 26-page civil complaint by Frank Foy raises the ante and comes at a time when federal prosecutors are looking into an alleged pay-to-play scheme in which Contarino already figures. In that case, federal prosecutors are investigating whether a California firm, CDR Financial Products, got state work in return for large contributions it gave to two political action committees started by Richardson, ¡Si Se Puede! and Moving America Forward.
Foy, a former investment officer at the New Mexico Education Retirement Board, alleged Tuesday that he felt pressured to make investments by ERB chairman Bruce Malott in a deal that ultimately lost the state nearly $90 million. The investment was the idea of Vanderbilt Capital. At that time, Contarino was Richardson’s chief of staff.
Months after the investment, several people associated with Vanderbilt gave Richardson’s presidential campaign $15,000 in political contributions.
“The meeting I had was with Malott and he told me that it was Contarino’s instructions,” Foy said.
Foy’s allegations didn’t go unchallenged. In fact, the press conference where he made them quickly turned into a shouting match when attorneys for Malott and his company, Meyners + Company, rose to defend their clients.
Sam Bregman, right, defended Meyner + Company, Bruce Malott's firm. Marty Esquivel, left, represented Malott personally. A shouting match ensued between Foy’s attorney, Victor Marshal, and the lawyers. The press conference was held in a small room in an Albuquerque senior center.
“That’s shameful for him to sit up here and malign good businesses and good people with a lawsuit that is frivolous in every shape, way and form,” said Sam Bregman, who is representing Meyners + Company, referring to Foy.
“Hold on, Sam,” interjected Foy’s attorney, Victor Marshall, who sat a few feet away.
“We didn’t interrupt you,” Bregman responded. “We let you speak.”
“This is a good example of a diversion. I called this press conference about David Contarino,” shouted Marshall.
Marty Esquivel, who is representing Malott, shot back, “It’s about Frank Foy sitting over there with zero credibility.”
“This is a politically motivated smear on Mr. Malott,” Esquivel added moments later.
Marshall responded by asking why they weren’t answering questions about Contarino.
Gilbert Gallegos, a spokesman for Richardson, said in an e-mail Tuesday that Foy’s “lawsuit is a big joke.”
“Mr. Foy and his partisan lawyer are abusing the legal system by leveling blatantly false, political allegations against the Governor’s administration,” Gallegos said. “Hopefully the court will hold them accountable for this unethical grandstanding.”
Bregman said much the same thing, calling the pay-to-play allegations in Foy’s complaint “absolute garbage. Mr. Foy is a disgruntled employee who likes to sexually harass women and now this is his payback for getting fired.”
Foy acknowledged last month that he was accused and found guilty of three counts of sexual harassment, “even though I denied all three of them vigorously,” he added.
“I felt it was a sham by senior management to force my hand to get me to quit or retire,” Foy said last month.
As to being disgruntled, Foy said last month, “I guess I can be considered disgruntled given the fact that I was railroaded out of my job.”
Foy’s complaint lists multiple defendants besides Vanderbilt, Malott and Bland. Several financial services firms, including JP Morgan Chase and UBS, are named. In addition to Contarino as John Doe #2, the suit also has 50 unnamed defendants who are known as John Doe #1 through John Doe #50.
JP Morgan and UBS both have figured tangentially in the ongoing federal probe involving CDR. And a UBS AG consultant served as a fundraising committee director on one of Richardson’s political action committees while the bank says he helped it win state bond work, records show.
Both JP Morgan and UBS sold a portion of $1.1 billion of bonds for the New Mexico Finance Authority in April 2004, which helped to finance the state’s high-profile transportation program — GRIP, short for Governor Richardson’s Investment Partnership. CDR advised the finance authority on interest rate swaps related to the bond issue.
The investment at the heart of Foy’s complaint is unrelated to the GRIP bond issue, and CDR’s advice to the finance authority.
