New Mexico’s attorney general Gary King, a democrat previously linked to pay-to-play scandals, told reporters yesterday that it was entirely legal to accept a $15,000 political contribution from the New York City law firm of Bernstein Litowitz Berger and Grossman LLP last month — despite the nine-month-old campaign contribution limits law he championed less than a year ago.

In his defense, he told reporters that because he was no longer a candidate when the check arrived on September 22 but already an elected official that it was fine to apply the funds to debts incurred during his 2010 campaign. “The easy legal solution,” he said, “is that it applies to candidates in elections 2012 and after. And I am not a candidate.”

The matter now goes to Secretary of State Dianna Duran, whose office tends to turn to the Attorney General for legal advice. King is confident that after Duran’s lawyers reflect on his interpretation of things, “they’ll agree” with him.

King’s contributions come at a particularly busy time in campaign contributions news.

Last Friday,  James Bopp Jr., an Indiana lawyer who specializes in lawsuits aimed at ending campaign finance and disclosure laws, filed, a lawsuit challenging the constitutionality of the state’s campaign contributions limits law along with other plaintiffs from New Mexico (including state senator Rod Adair, R-Roswell, former New Mexico Republican Party chair Harvey Yates, and state representative James Conrad, R-Albuquerque).

It was also reported today that Governor Susana Martinez took in $66,000 in campaign contributions last month. She claimed her acceptance of the money “adheres to both the spirit and the letter of the law.”

King has come under scrutiny because the $15,000 contributions are well above the limit as set forth in the state’s campaign contributions limits law, which banned pledges of $5,000 or more per election cycle as of November 3 of last year (the day after he was reelected as attorney general).

Attorney Rudy Martin said his client, A.J. Salazar, spoke to the FBI last week after turning over telephone numbers and potential witnesses to state Attorney General (AG) investigators five months ago, about the time he quit as Herrera’s state elections director and alleged wrongdoing in a resignation letter.

“The two (AG) investigators did their job,” Martin told The Independent. “Gary tried to play politics and swept everything under the rug” to help Herrera and other Democrats in an election year, Martin said. That lack of action ultimately led two of his other clients — Herrera’s office manager, Manny Vildasol, and her public information officer, James Flores – to also go to the FBI with allegations of wrongdoing, Martin added.

Vildasol and Flores are both on paid administrative leave and under investigation by the state, agency officials said Thursday.

“All three thought they had to meet with FBI because Gary King is playing politics,” Martin said of Salazar, Vildasol and Flores. King “has a responsibility to the state of New Mexico, and not necessarily to the Democratic Party. I am a Democrat myself.”

A spokesman for King disputed Martin’s charges and called them election-year mud-slinging .

“What Mr. Martin is saying is strictly a product of his own imagination,” Phil Sisneros said. “We have it on good authority that Mr. Martin and his client, Mr. Salazar, … are working for opponents of the secretary (Herrera) and Attorney General King. I suspect this is their way of stirring up trouble.”

Martin responded, “If by working for them they mean reporting criminal activity and reporting on an AG who is sitting on his butt, then I guess we are. … doing what is right and speaking out against what is wrong, when was that ever wrong in American society?”

Martin went on to deny that he and Salazar are working to elect Republicans Dianna Duran and Matt Chandler, Herrera’s and King’s GOP opponents, respectively.

“I’ve never met Mr. Chandler. I know his people have contacted my office,” Martin said.. “But I can’t go out campaigning. I am staying neutral on this one.” But, he said, “I am not supporting Mary Herrera with her character at all.”

Allegations are latest blow to Herrera in an ongoing saga

Thursday’s exchange between Martin and the Attorney General’s office represented the latest in a highly unusual turn-of-events revolving around the re-election effort of first-term New Mexico’s Secretary of State.

The agency has been in turmoil for months, but only as the November election nears have the steady drumbeat of allegations by current and former top aides at the agency started to test Herrera’s mettle as a political candidate.

Salazar, Vildasol and Flores all have alleged wrongdoing at the agency, ranging from forcing employees to solicit “sponsorships or donations” from businesses that contract with the state to possible kickbacks on contracts and having office employees campaign for Herrera on state time, Martin said.

Herrera on Thursday said the allegations were “blatantly false and ridiculous” and politically motivated, the Associated Press reported.

The news service went on to report that Herrera refused further comment after reading a brief statement and walked away Thursday as reporters asked questions at a news conference.

Current and former top aides report wrongdoing

Salazar quit as elections director under Herrera months ago, creating a a brief maelstrom of negative press for Herrera when he alleged wrongdoing in the agency in a lengthy resignation letter.

Vildasol and Flores, meanwhile, are currently on paid administrative leave while the state investigates them, Deputy Secretary of State Francisco Trujillo II said Thursday.

“There are two separate investigations respective to each employee,” Trujillo said. Asked the subject of the inquiries, Trujillo responded, “It’s a personnel issue.”

Martin claimed that the investigations are retaliation against Vildasol and Flores for going to Herrera with concerns about the alleged wrongdoing.

“These are top officials who advised Mary Herrera about the conduct they saw as unlawful and instead of doing something about it she decided to strip them of their duties,” Martin said of Vildasol and Flores. “She has decided to put greed and unethical conduct before her duties.”

While the allegations create bad press for the incumbent, it is difficult to gauge the impact, if any, of the accusations and the office turmoil on Herrera’s re-election chances. A few high-profile Democrats like Santa Fe County Clerk Valerie Espinoza, have come out in support of Herrera’s GOP opponent, Duran.

That hasn’t shaken Herrera’s confidence, Trujillo said.

The secretary “is confident in her re-election campaign,” Trujillo said. “She is very proud of her record. She’s had three very efficient elections. And she has had many cost saving ideas that have taken effect and have saved hundreds of thousands of dollars in taxpayer money.”

Duran, Herrera’s Republican opponent, said she has little time to pay attention to Herrera’s troubles while traveling the state to promote her own candidacy. But, she said, her supporters keep her up to date.

“I am aware of the things that are happening, at least most of them,” Duran said.

“My campaign will continue to focus on what the people of New Mexico want and what I can provide – integrity and honesty,” Duran said. “We need more transparency. We need a Secretary of State who is accountable to the people, someone who answers questions.”

Then Duran added, “I’m concerned like everyone else and not happy on what we are hearing.”

The decision reverses an earlier Lovington District Court decision that halted the Board’s consideration of a 2008 petition by environmental group New Energy Economy (NEE) to regulate carbon emissions in New Mexico.

Chief Justice Charles W. Daniels reportedly cautioned judges not to violate the separation of powers doctrine by interfering in administrative processes.

“It’s great news,” NEE and New Mexico Environmental Law Center lead attorney Bruce Frederick told The Independent. “It was nice to hear we still live in America. PNM and the oil companies tried to subvert the democratic process by getting a judge to violate the separation of powers doctrine and prevent the state from even considering a regulation. I think the issues were quite obvious, frankly.”

Now that the state’s right to consider a carbon cap has been affirmed, work will begin again on the Board’s consideration of the NEE petition, Frederick said. He anticipates a public hearing this summer.

“If that case continues, we will continue to raise our concerns regarding both the legality and the effectiveness of a state-only cap,” PNM spokesman Don Brown said.

PNM, three Republican state lawmakers and oil and gas industry groups filed a lawsuit in January to halt consideration of a cap, arguing the Board lacks authority under state law to regulate air quality without first establishing the specific air quality standards. States should not pursue their own “piecemeal” climate change legislation, the group also argued.

“The court did not in any way consider the merits of the NEE proposal; instead it exercised what is known as ‘superintending control’ to require the district court to dissolve the stay and dismiss the underlying case. The court made it clear the plaintiffs still have the right to challenge the cap after the regulatory proceeding is completed,” Brown said.

Normally, district court decisions are appealed to the Court of Appeals before they are heard by the Supreme Court, Frederick noted. In this case, the Supreme Court ordered a district judge to reverse his decision, Frederick said.

“Under our Constitution, the Supreme Court can issue extraordinary writs,” he said. “It allows the Supreme Court to supervise the lower courts and make sure they don’t violate the Constitution.”

Attorney General Gary King petitioned the high court for an extraordinary writ to have the District Court injunction dissolved, spokesman Phillip Sisneros said Monday evening.

“This case was about the state having the authority to effectively make rules,” King said. “This is the right decision for the state, it is clear that we now have an orderly process for rule-making and I am very pleased the Court granted our Writ of Superintending Control.”

A request for proposals (RFP) will be sent out next month with the goal of hiring a firm by mid-September to lead the agency’s effort to recover lost taxpayer money, State Investment Officer Steven Moise said Tuesday.

With the State Investment Council’s decision, the agency joins a growing list of institutional investors across the country that are trying to recover money lost due to the recent meltdown in investment markets.

“I don’t know what the pipeline looks like,” Moise said. “We are going to move forward as quickly and as aggressively as possible from this point forward.”

Attorney General Gary King, with whom the SIC will work in recovering the money,  said Tuesday that New Mexico might find common cause with other states that have lost money and might join together to recover money.

“Some of these cases we’re looking at may be class action suits,” King told the Independent.

King said his office already is working on a couple of cases involving the recovery of lost taxpayer money due to investments that soured and that he envisioned working with the SIC on several fronts as that agency’s efforts ramped up.

“We may be looking for instances where we will be co-counsels,” King said.

Moise could not give a dollar amount of what his agency would seek to recover “because we are analyzing those right now,” he said.

But he said the agency would target taxpayer money lost due to potential fraud as well as money that went toward what is known as third-party placement fees. Those types of fees are paid to individuals who play matchmaker between institutional investors like the SIC and fund managers who are looking for investors in their funds.

The SIC has lost tens of millions of dollars in investments that went sour in recent years, some say because of fraud.

A whistle blower and former investment officer at the Educational Retirement Board, meanwhile, has pegged the loss of New Mexico public money lost due to potential fraud at more than $280 million.

The fees targeted for recovery could involve investments where the state lost money or fees that appear questionable, Moise added.

Moise said he didn’t know how much the firm his agency hires to lead the recovery effort will make, but he was emphatic that it would be much less than the 20 percent to 33 percent of the recovered funds firms typically make in such arrangements.

Decision to go after lost  money follows months of scrutiny

The agency’s decision to begin recovering lost money due to potential fraud comes after months of criticism about New Mexico’s inaction while at the same time the SIC has found itself engulfed in a full-blown scandal. The agency figures in investigations by both the U.S. Attorney’s Office and the federal Securities and Exchange Commission.

What had been concerns over lost taxpayer dollars during the economic downturn exploded into a full-blown scandal last fall when the state’s former investment adviser, Saul Meyer pleaded guilty to securities fraud in New York. Meyer advised the SIC and another state investment agency, the Educational Retirement Board.

In his pleadings Meyer admitted that on numerous occasions, contrary to his fiduciary duty to the state, his company had “recommended proposed investments that were pushed on him by politically-connected individuals in New Mexico.” Meyer went on to say in that statement he knew “that these politically-connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico.”

Former State Investment Officer Gary Bland, who helped hire Meyer, resigned days after Meyer’s guilty plea and admission.

Meyer hasn’t named any of those politically connected individuals exerting pressure, but one man – Marc Correra – has attracted attention. Correra, the son of Anthony Correra, a friend and fundraiser for Gov. Bill Richardson, shared in $22 million of third-party placement fees in several investment deals involving the State Investment Council and the Educational Retirement Board. Some of those investments lost money.

No one in law enforcement has accused Correra of wrongdoing and his attorneys have said he worked hard for the money.

A complete reorganization

The extra scrutiny surrounding the SIC ultimately led to a wholesale re-organization of the agency during this year’s legislative session when state lawmakers passed a law making several changes to how the agency is run, including impaneling a new Council and changing how decisions are made.

Prior to the new law, virtually all decision-making authority in many matters was given to the State Investment Officer. Now that power rests with the new Council, which is composed of several veterans of the previous board as well as several newly appointed members.

The new Council wasted no time striking out in a new direction Tuesday. In addition to agreeing to try to recover money, the Council voted to reduce the percentage of its $14.1 billion portfolio invested in the stock market, from above 60 percent to around 55 percent.

At more than 60 percent, the Council’s exposure to public equity – or the stock market – put it in the Top 10 percent of endowments, Allan Martin of  New England Pension Consultants, one of the Council’s long-time advisers, told Council members.

“The portfolio has had too much exposure to equity and that is something you corrected today,” Martin said.

The council also voted to fire four firms managing funds for the agency. “Some were performance related. Some were changes in personnel. And there were other concerns,” Moise said after the meeting.

In addition to those actions, the council also is considering a new policy that changes last year’s complete ban on investing in funds that use third-party placement agents. That ban was imposed after it was discovered how much Marc Correra had shared in of third-party placement fees over a period of several years.

Under the proposal this change would allow the Council to invest funds that use third-party placement agents as long as the individuals are not representing funds in New Mexico trying to do business with the SIC, said SIC spokesman Charles Wollman.

“Right now the Council cannot invest in any fund that uses third-party placement fees without voting in special exemption, which has never been done,” Wollman said.

Rosalyn Nguyen, the SIC’s associate general counsel, told members Tuesday that the complete ban on investing in funds that use placement agents had prevented the SIC from some good investment opportunities.

The board likely will take that up at its next meeting, officials said.

Sloan was convicted April 8 of felony charges of aggravated battery and aggravated burglary, in a case stemming from Sloan’s belief that another woman was having an affair with her husband.

Sloan faced 12 years in prison but will not be incarcerated. She must pay $3,500 in fines and court costs.

“My office petitioned the Court for Carol Sloan’s removal based on grounds that she was convicted on April 8, 2010 of Aggravated Burglary, a second degree felony, and Aggravated Battery, a third degree felony,” King said Thursday. “Today she was sentenced for those crimes which, according to New Mexico law, means she can no longer remain in public office.”

The New Mexico Constitution and state laws prohibit convicted felons from holding public office, King said.

The matter is now out of the PRC’s hands, Sloan’s colleagues said Thursday afternoon.

“The AG has put it to the Supreme Court,” Commissioner Jason Marks said. “They will make the correct decision under New Mexico law.”

“Our attorneys tell me that while it’s on appeal, it will be in abeyance, but I’m not an attorney,” PRC Chairman David King told The Independent.

PRC Chairman David King is a first cousin of Attorney General Gary King.

“Our attorneys are looking at it,” David King said. “We’ll wait and see. I talked to (Sloan) earlier today and she feels like she hasn’t had a fair hearing. She wasn’t allowed to explain everything at the District Court level and needs to have an opportunity to have that heard.”

Sloan and her staff could not be reached for comment Thursday afternoon.

King urged senators to help Mexico fund its judicial reform efforts, including training for investigators, prosecutors and judges on combating border crime.

King emphasized recent examples of successful cooperation between the two countries, including an agreement to share intelligence on human smuggling and drug smuggling networks, and an expansion of joint U.S./Mexican undercover operations to interdict arms trafficking from the U.S. to Mexico.

King also described efforts against money laundering and stolen vehicle trafficking.

King hosted a week-long training session this month for Mexican law enforcement officials at an undisclosed facility in southwestern New Mexico, according to spokesman Phillip Sisneros.

Photo by Steve Wampler

Attorney General Gary King would get extra muscle to go after taxpayer money lost to fraud, if Gov. Bill Richardson signs a state budget the Legislature passed last week.

The budget earmarks $150,000 for King to hire a full-time attorney to focus on court complaints filed by citizens who believe that the state has been defrauded, resulting in the loss of taxpayer money.

A full-time attorney dedicated to so-called qui tam lawsuits could represent a financial boon to the state.

A 2007 state law allows New Mexico to recover up to triple the amount of money it has lost because of fraud.

Gov. Bill Richardson still must sign the budget bill for it to become law, but King said Monday that once it’s signed, he plans to move quickly to hire an experienced full-time attorney who would focus on 100 or so qui tam lawsuits currently before his agency.

The issue of qui tam lawsuits has emerged as a major issue since Frank Foy, a former investment officer at the state Educational Retirement Board, alleged fraud in the loss of tens of millions of dollars related to state investments that eventually went sour. Foy filed the complaint in 2008, naming several defendants, including several public officials.

Foy originally alleged $90 million was lost due to fraud in his suit, meaning that if Foy proves his case the damages collected could rise to $270 million. Foy and his attorney would collect a portion of that award.

Foy and his attorney have since revised upwards the amount of money they say the state lost due to fraud.

Some state lawmakers expressed concern, and even anger, during this year’s 30-day legislative session at the number of qui tam lawsuits that have piled up at the Attorney General’s office.

“It is a clear directive from the Legislature to the Attorney General’s office that we expect these cases to get off the dime,” State Rep. Joseph Cervantes, D-Las Cruces, said Monday of the $150,000 earmark.

Cervantes sponsored the 2007 law that allows citizens to file legal complaints alleging fraud and attempt to recover the lost money.

The attorney general’s office doesn’t have any one lawyer assigned to addressing the qui tam lawsuits, but has several lawyers working piecemeal on the complaints, King said, explaining the backlog of qui tam lawsuits at his agency.

The money in the state budget comes a year after King asked the Legislature for help in addressing the number of lawsuits piling up at his office. Last year state lawmakers approved a position for a full-time attorney dedicated to qui tam lawsuits—but did not fund the position.

The $150,000 appropriation does not represent additional dollars for his agency, King explained Monday. It merely directs him how to spend $150,000 of his more than $15 million budget.

The money would pay the salary and benefits for an experienced full attorney, a portion of the staff time and the related costs in such cases, like expert witnesses, discovery and printing costs that go into such cases, King said.

The full-time attorney would split his time between going after potentially recoverable money and determining which qui tam lawsuits to pursue. The AG’s office has 60 days under the 2007 act to decide whether to take a case or release it to a private attorney, who can go after the money. The Attorney General’s office released the Foy case, allowing a private attorney to pursue the recovery of the money alleged to have been lost because of fraud.

He won’t have any problems finding an experienced full-time attorney for the position, King said.

“There’s a good talent pool of lawyers looking for work,” King said.

Also roughly 250 more state jobs across state government would disappear than in a House-approved state budget plan that served as the starting point for the Senate proposal. Many of those targeted state government positions are already vacant, legislative officials said.

Reaction to the budget proposal approved by the Senate Finance Committee was swift Thursday.

Attorney General Gary King came out swinging, accusing the Senate Finance Committee of a political vendetta. He said in a statement released Thursday afternoon that the committee had proposed cutting his agency by $4 million and that it was punishment for the agency’s prosecutions of “politically well-connected individuals.”

The Attorney General’s office is in the middle of prosecuting Vincent “Smiley” Gallegos, a former state lawmaker and friend of House Speaker Ben Lujan, and former Secretary of State Rebecca Vigil-Giron.

“We believe that there are people who are affected by our investigation who have friends in the Legislature,” said Phil Sisneros, spokesman for Attorney General Gary King.

But legislative officials deflected the AG’s accusations, saying the Senate proposal doesn’t cut the Attorney General’s office by $4 million. Rather it proposes taking $4 million in general fund money and replaces it with $4 million from a consumer protection fund. The general fund is the state’s main account.

King would have discretion on how to spend that money, legislative officials said.

A spokesman for King, Phil Sisneros, insisted Thursday afternoon despite the replacement money that the Senate’s proposal would force the Attorney General’s office to curb political corruption prosecutions.

The Senate proposal is the latest plan produced by the Legislature as state lawmakers try to close a budget shortfall for next year estimated at several hundred million dollars.

Hours after the Senate Finance Committee approved the Senate budget proposal, legislative leaders from both the House and Senate converged on Sen. President Pro Tem Tim Jennings’s office for a quick meeting.

“It wasn’t a negotiation,” said Sen. John Arthur Smith, D-Deming, and Senate Finance Committee chairman. “We were just outlining our positions.”

The House and Senate must agree on a spending plan before they send it on to Gov. Bill Richardson for his signature. Lawmakers only have seven days left in this year’s regular legislative session to produce a state budget.

The Senate proposal differs in many ways from the House budget, including the size of proposed spending cuts and tax increases.

The Senate proposal recommends $150 million less in spending than the House proposal — $5.276 billion to $5.426 billion.

The Senate proposal also reduces by more than half the amount of new revenue the House approved to generate through tax increases, from $340 million to roughly $150 million.

The Senate accomplished this by replacing two House-approved tax increase proposals – a surtax on the state’s wealthiest residents and a half-penny increase on the state gross receipts tax – with a gross receipts tax on non-staple foods.

The battle over taxes has generated the greatest heat during the 30-day session. And the state budget discussions between the House and Senate may well hinge on how much to raise taxes – and what those taxes are.

Advocates who support taxing wealthier individuals and out-of-state corporations through what is called combined reporting reacted angrily to the Senate proposal.

The food tax “disproportionately discriminates against the poor,” said Allen Sanchez, a spokesman for the New Mexico Conference of Catholic Bishops. “Whole milk is taxed.  Tortillas are taxed. Brown eggs are taxed. A person on a tight budget will go into a grocery store and buy the most inexpensive food. Most inexpensive food is taxed. It creates the most regressive tax in New Mexico history because it discriminates poor people.”

But some advocates that initially opposed re-imposing the gross receipts tax on food said this week that the narrower definition in the Senate proposal of taxing non-staple foods is “palatable.”

On the spending side, the Senate proposal recommends more cuts than the House.

Public education would get $53 million less than in the House proposal, according to budget handouts. Public education is the state’s biggest ticket item.

Both the Senate and House proposals, however, call for directing more dollars to public education than this year.

The House is proposing $2.319 billion compared to the Senate’s $2.268 billion. This year the state will spend just over $2.1 billion for public education because the Legislature trimmed education spending during an October special session dedicated to addressing the state’s sorry financial state.

Other agencies in the Senate proposal facing reductions from this year’s spending levels include the state Department of Health, at $10 million, and the state’s Children Youth and Families Department (CYFD). CYFD would see a decrease of $3 million.

New Mexico courts would experience a $2.6 million reduction.

Some agencies, however, would see funding increases under the Senate proposal. The Corrections department would get $2.5 million more. The state’s share of Medicaid – the government’s low-income health insurance program – would jump from $578 million to nearly $601 million, the handouts show.

State workers also would take a hit in the Senate proposal.

The Senate’s plan calls for teachers and state workers to contribute more to their retirement plans. Under the plan, employees would pay 1.6 percent more into their retirement plans. The state would stop paying that portion that the employees assume.

The 1.6 percent would be on top of the 1.5 percent more the state’s 66,000 public employees started paying last July 1.Representatives of state workers expressed anger at the Senate proposal, saying the state was turning to hard-working state workers rather than taxing the wealthy and out-of-state corporations.

The additional 1.6 percent in contributions employees would assume if the Senate proposal passed would save the state nearly $44 million, according to budget handouts.

“It’s very disappointing,” said Carter Bundy, political director of Council 18 of the American Federation of State County Municipal Employees. The budget proposal “continues to place the brunt of the financial crisis on educational employees and state workers.

Smith, the Senate Finance Committee chairman, said he sympathized with public employees and their complaints.

“I understand their bitching,” Smith said. “They have a legitimate complaint. We just don’t have the resources to hold them harmless.”

UPDATE: The Independent incorrectly reported that the Senate Finance Committee passed SB 10 on Thursday. SB 10 would tax non-staple foods. Instead the measure passed the committee on Friday. House bill 120, meanwhile, has been withdrawn, according to the Legislature’s website. That measure would have required companies to collect withholding tax on people who earn income in New Mexico but that the state can’t locate, according to a legislative analysis. The companies in question — called ‘pass through entities’ — would make quarterly withholding tax payments on net income distributed to their non-resident owners, according to the legislative analysis.

You can read that and much more in the motion and letters attorney Robert Gorence filed. The documents were obtained by KKOB’s Peter St. Cyr. To read the motion, click here. Click here and here for the two letters.

Vigil-Giron and three others — Armando Gutierrez, and Joe and Elizabeth Kupfer — were indicted two weeks ago on 50 counts each in what the Attorney General’s Office says was an embezzlement and money-laundering scheme.

Gutierrez, hired by Vigil-Giron as a media consultant, helped the Secretary of State’s Office produce tens of thousands of TV and radio advertisements that ran in English, Spanish and Navajo and starred Vigil-Giron in the months leading up to the 2004 general and 2006 primary and general elections.

According to a Federal Election Assisstance Commision report issued in May of last year Gutierrez was unable to account for more than $2 million of the nearly $6.3 million in federal funds he had been paid by Vigil-Giron’s office.

Gutierrez’s attorney has criticized both the indictments and last year’s federal audit.

The Attorney General Office has basically accused the foursome of misusing federal voter education funds; the criminal counts against each individual range from embezzlement and money-laundering to taking and receiving a kickback.

Gorence, in a letter sent to the Attorney General’s Office in January, disputed that Vigil-Giron ever received a kickback.

“As you are aware, kickback or bribery cases are usually substantiated by proof that a public official received money, or some tangible thing of personal value, in exchange for the discharge of public responsibilities,” the attorney wrote.

Gorence goes on to say that “there was not a single penny or any other benefit  that flowed from Mr. Gutierrez to Ms. Vigil Giron.”

He then accuses the Attorney General’s Office of treating Vigil-Giron’s appearances on the thousands of voter education ads that appeared on radio and TV as a form of kickback.

Gorence dismisses this approach as “some novel theory regarding the value of federally required advertising as constituting some form of bribe or kickback. I am confident that this absurd theory will fail both factually and legally.”

But if you want to know the names of both firms who bid for the contract, which ultimately paid out $6.3 million, how each bid compared to the other and what standards or rules the agency used to grade the proposals — well, good luck.

The Secretary of  State’s Office doesn’t have the information.

“Please be advised that we do not have the documents requested on record,” deputy Secretary of State Don Francisco Trujillo II wrote last week in response to a records request by the Independent. “Pursuant to NMAC 1.15.5 our retention schedule for these documents is: ‘three years after close of fiscal year in which created.’”

It is not clear from Trujillo’s response if the agency under Vigil-Giron’s successor, Mary Herrera, ever had the documents and if it did what happened to them. The Independent asked Trujillo to clarify but did not hear back whether Herrera’s administration had destroyed them after the three-year deadline or if staff was unable to find the documents in question.

The Independent had requested to view the names of the two bidders who vied for the contract, the “request for proposals” the agency sent out in August 2004 and a copy of the advertisement that ran in the Albuquerque Journal Aug. 8-17, 2004 in which the agency requested bids.

The media consulting contract Vigil-Giron eventually awarded to Armando Gutierrez and his firm, Gutierrez & Associates Inc., is at the heart of the indictments the New Mexico Attorney General’s Office brought against against Vigil Giron, Gutierrez and Joe and Elizabeth Kupfer.

The Attorney General is saying Vigil-Giron, Gutierrez and the Kupfers carried out an embezzlement and money-laundering scheme, an accusation several defense attorneys have disputed.

But even before last month’s indictments, how Vigil-Giron awarded the media consulting contract came in for some scrutiny.

In a report released last year federal auditors criticized Vigil-Giron’s decision to not go through the state’s normal contract letting procedures. Her office instead ran the advertisement in the Albuquerque Journal, according to the audit.

“We believe that the Secretary of State should have informed the State’s centralized procurement office of the planned purchase and provided it with a copy of the RFP as provide (sic) for in the regulation (1NMAC 5.2 Section 29.3),” the audit’s authors wrote. “By not following the aforementioned requirements, competition may have been limited because the state purchasing agent was precluded from determining whether there were qualified firms available to submit proposals for this work.”

A week after the ad’s run, on Aug. 24, 2004, Gutierrez’s firm beat out the other firm vying for the contract.

Sometime later, it is unclear exactly when, a letter between Vigil-Giron and Gutierrez changed how Gutierrez was paid. That letter — dated Aug. 26, 2004 — stipulated that Gutierrez would go from being paid at an hourly rate to a single 17-percent administrative fee of the value of work his firm performed

According to an indictment, Vigil-Giron fabricated the letter — postdating it Aug 26, 2004. The suspicious provenance of the letter led to a charge of tampering with evidence, one of 50 criminal counts the former secretary of state is now facing.

Ultimately, Gutierrez earned a $1 million administrative fee, slightly more than 20 percent of the $4.8 million his firm, A. Gutierrez & Associates, Inc., was paid to produce tens of thousands of TV and radio advertisements that ran in English, Spanish and Navajo and starred Vigil-Giron in the months leading up to the 2004 general and 2006 primary and general elections.

The federal audit also found that the Aug. 26, 2004, letter had not been reviewed by the state Attorney General’s office, although the AG was legally bound to review state agency contracts.

“The former Secretary of State told us that she relied on the statements made by the Contractor that it would be better to agree to the 17 percent fee arrangement because it would result in a lower overall cost to the state,” the audit says.

In a Sept. 2, 2004 letter to Vigil-Giron, Gutierrez elaborated on the need for a new pay structure.

It is my belief that if we stuck to the $75/hr. fee quoted in my agency’s response to the RFP, or if we charged New Mexico industry standards, the production costs would skyrocket beyond control. Most of our New Mexico film industry workers are unionized, which would mean a very high hourly rate, plus a range of peripheral costs that would add greatly to the final production costs.