A former New Mexico Educational Retirement Board (ERB) member began testifying Monday in a lawsuit alleging that a pay-to-play culture existed at the state’s investment boards, the Albuquerque Journal reports today.

Pauline Turner, one of two ERB members to vote against an investment that eventually cost the state tens of millions of dollars, was deposed behind closed doors, according to the Journal’s Mike Gallagher.

Turner is a witness in a lawsuit filed by former ERB investment officer Frank Foy.

Foy, who filed the civil complaint last year, is seeking to recover the $90 million the state lost when the ERB along with the State Investment Council invested money with a financial vehicle marketed by Chicago-based Vanderbilt Financial Trust. Foy alleges as part of his lawsuit that a pay-to-play culture existed at the ERB and SIC, an accusation vigorously denied by officials.

In 2006 the ERB voted 4-2 — with then-member Delman Shirley siding with Turner against the investment— to go ahead with what was essentially an investment of the retirement funds of public educational employees in subprime mortgages. The state later lost the entire $40 million investment, along with a separate $50 million investment the State Investment Council (SIC) made with Vanderbilt.

NMI’s Heath Haussamen interviewed Turner three months ago when Turner’s name surfaced as a potential witness in Foy’s claim. In that interview, Turner recalled at the time of the investment that she felt the board was making “what appeared to be a hasty decision” because its members hadn’t been educated on the type of investment they were about to make and didn’t have policies and procedures in place to deal with such investments.

“I felt personally that we were taking more risk in a way that was really irresponsible because a lot of the board members — not all of the board members, but a lot of the board members — didn’t understand what we were doing,” Turner said.

Turner went on to tell Haussamen that she had no ‘firsthand knowledge’ of any pay-to-play deal involving Vanderbilt or any other investment. But she did say that it was her impression that a lot of people who had contributed to the governor’s political campaigns now had state contracts.

Turner also told Haussamen that she became increasingly frustrated that the ERB began to follow the lead of the SIC, as it did in the case of the Vanderbilt investments.

Turner resigned from the board in June 2008. In her affidavit, which accompanied a request by Foy’s attorney for an expedited deposition, Turner stated that she resigned because of “poor health, advancing age, and frustration in the direction that the board was moving, particularly as it related to investment philosophy and the actions and characteristics of the board chair.”