According to a story in the Albuquerque Journal today by Mike Gallagher, the governor’s office won’t even say whether it has received subpoenas from a federal grand jury or the Securities and Exchange Commission regarding state investment business.

A bit of inconsistency is at play here, as Gallagher points out. The governor’s office publicly released a subpoena related to a different federal investigation in February of this year. That inquiry ended without criminal charges in August, although it wasn’t the clear victory the governor and his people had hoped for.

After the governor released the subpoena earlier this year, the New Mexico Finance Authority, State Investment Council and Educational Retirement Board all rejected requests for the release of similar subpoenas related to federal investigations.

All three agencies, however, later reversed course and followed the governor’s office in releasing subpoenas.

Which makes it curious as to why, 10 months later, the governor’s office is not even acknowledging whether it has received a subpoena from federal prosecutors and regulators scrutinizing New Mexico’s investments.

Gallagher writes that the Journal had requested copies of any subpoenas the governor’s office had received related to the ongoing federal investigations.

Here’s an excerpt from the Journal’s story that recounts the response from the governor’s office:

“Any responsive records the Governor’s Office may have received would be exempt from disclosure. Such documents would relate to a matter that is or will be before a federal grand jury. This office will not release records of this nature pursuant to the federal rules governing grand juries.”

The letter went on to say, “There are also countervailing public policy considerations that warrant denial of your request as well, including but not limited to this Office’s effort to cooperate and not unduly interfere with any federal grand jury investigation(s).”

Gallagher points out that federal rules require secrecy from members of the grand jury, court employees, prosecutors and agents, but that same obligation does not extend to witnesses, i.e., people who receive subpoenas.

The federal investigations are another black eye for New Mexico, especially with the state’s former financial adviser pleading guilty to corruption in October as part of a pay-for-play investigation in New York. Gary Bland, the State Investment Officer, meanwhile, resigned in October in advance of a no-confidence vote from members of the State Investment Council. One member, State Land Commissioner Pat Lyons, told the Associated Press that a private firm hired by the council had discovered that Bland had “pressured investment firms doing business with the state to hire certain third-party marketing or placement agents.

No one has named the third-party marketer involved. But one name has repeatedly surfaced during New Mexico’s scandal involving third-party marketers: Marc Correra.

Correra shared in $22 million in fees over several years as a third-party marketer, meaning he played matchmaker between fund managers looking for investors and the state which was looking to invest.

Marc Correra is the son of Anthony Correra, a fundraiser for and friend of Richardson’s.

Richardson’s office has shown a proclivity toward secretiveness this year surrounding the Correras. NMI repeatedly asked the governor this year if he had met with Marc Correra in the months leading up to a 2006 investment that eventually lost $90 million in taxpayer money. Correra was the third-party marketer in that deal.

The governor and his office repeatedly declined to answer the question until NMI requested to review all documents related to any meetings the governor had with Marc Correra , including calendars, datebooks and e-mails, during the months of January through August 2006.

The governor’s office finally relented, saying the governor had not met with Correra in the months leading up to the investment.

So what message does the decision by the governor’s office to not disclose whether or not it had received a subpoena? First, it signals that the governor’s office likely has been subpoenaed.

As for whether they are trying to hide something, that’s for you to decide.

“Today’s action is a win for transparency,” Sarah Welsh, executive director of Foundation for Open Government (FOG), said Tuesday evening in a statement, referring to the State Investment Council’s decision to release four documents.

FOG, like the Independent and other media outlets, had requested copies of some of the documents for months, only to be denied until Tuesday.

The documents made public by the State Investment Council included two federal grand jury subpoenas, issued by the U.S. Attorney’s Office in New Mexico, that are related to a federal criminal investigation.

The other two documents the SIC released Tuesday were from the Securities and Exchange Commission — a subpoena demanding a wide-ranging list of records as well as that agency’s rules of testimony that were sent to former State Investment Officer Gary Bland prior to testimony he gave this fall to that federal body.

At the center of the showdown between the media and SIC was the status of such records. The media insisted for months that the documents were public and should have been released under the state’s open records law.

Subpoenas often can offer a glimpse into what prosecutors are looking for by the records they request, which can be anything from financial records to e-mails from and to specific individuals.

“It’s important to note that our state open-records laws are more robust than federal FOIA (Freedom of Information Act) law,” Welsh said. “So when these documents arrived at a state agency, we believe that they became state records for the purposes of the New Mexico Inspection of Public Records Act. And that law mandates disclosure.”

The SIC rebutted the media’s argument, saying that a request from federal prosecutors to not make them public trumped the state’s open records law. The belief, the agency said, was that releasing the subpoenas publicly would hamper an ongoing federal investigation, an argument repeatedly used by New Mexico state agencies over the past 15 months.

The New Mexico Finance Authority, at the center of a federal pay-to-play probe that ostensibly ended this summer with no criminal charges, employed a similar argument to deny media requests for federal subpoenas it had received.

“When the Justice Department sends you a letter saying you are requested to not disclose the existence of the subpoena. I am going to pay attention to that,” the authority’s chairman, Stephen Flance, told state lawmakers in June. “They also said premature disclosure could affect the outcome of the investigation.”

The U.S. attorney asked the NMFA to not to release the document, citing a federal statute that applies to banks.

The NMFA, like the SIC, sided with the feds in the balancing act that pits the prosecutors’ request against the state’s inspection of public records act.

While the SIC and other New Mexico state agencies have sided with federal prosecutors’ request not to release subpoenas publicly, state agencies in other states have not always chosen that path. In Connecticut, the governor’s office in 2004 made subpoenas available to the press despite a request from the U.S. Attorney’s Office that the subpoenas not be made public.

Ultimately the governor of that state, Republican John Rowland, pleaded guilty to corruption and spent roughly 10 months in federal prison.

Some New Mexico state agencies have released subpoenas they’ve gotten, either because the federal inquiries had ended – as the NMFA did in September — or because the agency simply changed its mind, as the Educational Retirement Board did in June.

In making the documents public Tuesday the SIC shifted gears after months of denying media requests. Reasons for the shift in policy were outlined in a one-page letter from the state’s interim investment officer Bob Jacksha, which accompanied the released documents.

Jacksha wrote:

“The Investment Office initially denied those requests under New Mexico Inspection of Public Records Act … in order to refrain from interfering in any federal investigation.

“However, in the staff’s ongoing legal review, with the input of council Members, and under my own direction as Investment Officer, the Investment Office will today publicly release the subpoenas to all who have asked for them previously.”

Watching protesters in Tehran use Twitter and other social networking services to tap out messages and share photos of impromptu demonstrations has put that myth to bed, hopefully forever.

No less an auspicious news consumer than the American government is reading those micro-blogged messages as one way to stay informed on what’s happening on the ground in Iran following the country’s ostensibly marred presidential election.

In the past 24 hours, I’ve seen dramatic photos of protests featuring thousands of demonstrators swarming city squares and read dramatic messages from protesters, such as this one, written supposedly by a student chafing at Iranian President Mahmoud Ahmadinejad’s description of thousands of protesters who flooded the streets as dust.

“Ahmadinejad called us dust, we showed him a sandstorm.”

What this episode in Twitter’s evolution shows us again is that the social-networking sites like Twitter are revolutionary in nature. In the case of Iran, protesters have bypassed government controls, and the media, to tell their own stories, much the way savvy Twitter users have done in the aftermath of bombings and politcal arrests over the past two years.

For someone like me, a reporter at newspapers for nearly 19 years and an online journalist for the past 14 months, it is a development that induces both fascination and fear.

It’s fantastic that citizens can get their stories out, and that we may be looking at some intermittent phase that leads toward a more involved citizenry, not only in Iran, but here in U.S. At the same time, who verifies the truthfulness of these messages we’re reading from Tehran?

Also Twitter and their ilk hold out the possibility of sparking a potential army of government watchdogs. But couldn’t it just as easily lead to people reporting their latest sighting of Oprah or Kobe Bryant?

I was reminded of the subversive power of Twitter recently while reporting on a legislative hearing in Santa Fe.

I was the only reporter in the room when Stephen Flance, the chairman of the New Mexico Finance Authority, told state lawmakers that it was his understanding that the FBI phase of the federal investigation into pay-to-play allegations in the Richardson administration was over and now in the hands of officials in Washington, D.C.

It was the first time a government official had said something along those lines publicly, even though the rumors had been rampant for weeks.

I looked around at the room. Seeing no other reporters in the room I realized I had stumbled upon an “exclusive,” or a scoop.

I figured I had a couple of hours to write the story, and I felt pretty good sitting there typing on my laptop.

Ten minutes later, a colleague instant messaged me that state Rep. Brian Egolf, who was among the lawmakers listening to Flance’s presentation, had tweeted Flance’s comments.

Fewer than 100 people follow Egolf, but several are news reporters. About five minutes after I got the message about Egolf’s tweet, one of those reporters — Steve Terrell of the Santa Fe New Mexican — walked into the room.

He had read Egolf’s tweet.

The story was no longer just mine. I rushed to write the story and get it out. Two hours became 30 minutes.

After the meeting, I joked with Rep. Egolf about him beating me to the story. He apologized. I basically told him no harm, no foul.

But my experience taught me a lesson: It’s a brand new world, not only for governments such as Iran, but for reporters like me who now must compete with a new brand of citizen  journalist.

It’s a new world.

Lawmakers heard this week from the agency’s board chairman Stephen Flance why the agency has taken that position.

“When the Justice Department sends you a letter saying you are requested to not disclose the existence of the subpoena. I am going to pay attention to that,” Flance told lawmakers Wednesday during a meeting of the  legislative New Mexico Finance Authority Oversight Committee. “They also said premature disclosure could affect the outcome of the investigation.”

It appears that NMFA, like other state agencies, is siding with the feds in the balancing act that pits the prosecutors’ request — note: it’s a request — against the state’s inspection of public records act.

While the NMFA — and other New Mexico state agencies — have sided with the feds against the release of public records, state agencies in other states have not always chosen that path during a federal investigation. In Connecticut, the governor’s office in 2004 made subpoenas available to the press despite a request from the U.S. Attorney’s Office that the subpoenas not be made public. I know because I was one of the reporters covering that story.

Ultimately the governor of that state, John Rowland, pleaded guilty to corruption and spent roughly 10 months in federal prison.

Subpoenas often can offer a glimpse into what prosecutors are looking for by the records they request. Those records can be anything from financial records to e-mails from and to specific individuals.

NMFA of course isn’t the only New Mexico agency to not turn over subpoenas from federal prosecutors. The New Mexico State Investment Council and the Educational Retirement Board have refused requests to make subpoenas public. The Independent has asked the ERB to reconsider its denial of the two subpoenas it has received based on a letter the agency’s chairman sent asking that the subpoenas be released.

At the same time the office of Gov. Bill Richardson made public a subpoena it had received earlier this year.

The authority’s chairman, Stephen Flance, said Wednesday that he hoped to recover money from a series of companies that recommended that the agency use complicated financial vehicles called interest-rate swaps.

Ultimately the market for the swaps collapsed, causing the agency to refinance roughly $450 million of $1.7 billion in bonds used to the state’s high-profile transportation program — GRIP, short for Governor Richardson’s Investment Partnership.

That refinancing cost $6 million to $10 million, NMFA officials said Wednesday.

It is that money that Flance hopes the agency can recover, he said.

“We thought we were getting independent advice, and I think that it was not as independent as we were led to believe,” Flance said of the team of advisers. “I think that they had a product to sell.”

The companies that might find themselves on the business end of the Attorney General’s legal complaint, if it comes to that, are JP Morgan Chase Co. and UBS, among others. The two firms were among those on a team of advisers that recommended the swaps, Flance said.

Both JP Morgan and UBS sold a portion of $1.1 billion in bonds for the New Mexico Finance Authority in April 2004, which helped finance the GRIP program. A California company at the center of a federal investigation involving the financial authority, meanwhile, got a state contract to advise the authority on the swaps.

The company, CDR Financial Products, earned close to $1 million in fees for that service.

Federal prosecutors have been looking into a lucrative contract that the finance authority awarded to CDR Financial Inc., which also made big contributions to political action committees formed by Gov. Bill Richardson.

CDR is also being investigated elsewhere because of deals that have gone sour. It is being sued by several municipalities, according to published reports.

One of those places was Jefferson County, Ala., where JP Morgan and CDR worked together to advise the county on municipal bond debts.

The series of bond and interest-rate swap sales in 2002 and 2003 were for sewers in Jefferson County, which covers about 1,125 square miles including Birmingham, the state’s largest city with more than 240,000 residents.

Since credit markets seized up in 2007, Jefferson County’s annual sewer debt payment more than doubled.

Now Jefferson County is close to bankruptcy and it is negotiating with JP Morgan Chase to in an effort to solve its financial crisis. JPMorgan is one of several parties that have offered $1.3 billion in concessions to help solve Jefferson County’s sewer crisis, according to the Birmingham News.

Flance told state lawmakers that the FBI had completed its investigation and that the findings were with the U.S. Attorney General Eric Holder in Washington. Flance later said Wednesday afternoon that the agency’s general counsel, Rey Romero, had informed him of the news.

Romero, standing next to Flance in a Roundhouse hallway, wouldn’t say who he had talked to or how he had gotten the information. But when asked if he trusted the source and the information that person was telling him, Romero said, “Yes.”

Federal prosecutors have been looking into a lucrative contract that the New Mexico Finance Authority awarded to the California company — CDR Financial Inc. — that made big contributions to political action committees formed by Gov. Bill Richardson.

Flance told lawmakers Wednesday that FBI agents had interviewed several staff and board members affiliated with NMFA. He said later that no one currently associated with NMFA had been asked to testify before the grand jury.

During the course of the federal investigation the state finance authority has turned over reams and reams of information to the grand jury, Flance said.

During his testimony before lawmakers, Flance said “With some level of confidence, I can say no one who is currently with the authority is under any suspicion … of being involved in wrongdoing.”

The names of Dave Contarino, Gov. Bill Richardson’s former chief of staff, and David Harris have come up in media reports about the investigation.

Harris worked at NMFA until 2004.

In January, the investigation into CDR’s contract forced Richardson to withdraw as President Obama’s nominee for U.S. commerce secretary.

“It’s my understanding is that the grand jury investigation has been completed. It has been forwarded to the U.S. Attorney General’s office,” Stephen Flance, chairman of the New Mexico Finance Authority, told lawmakers Wednesday.

“We are waiting to see what comes out of the investigation. Are we worried? Yes. We are. But I really believe the NMFA will not be a target. That’s where things stand now.”

While media reports have suggested that the investigation has been forwarded to Washington, this is the first confirmation by any public official involved in the process.

U.S. Attorney General Eric Holder declined to comment on whether he had the investigation last Friday when he was in Albuquerque.

Flance also told lawmakers that federal investigators had interviewed several individuals affiliated with NMFA.

“Several of us have been interviewed by the FBI,” Flance said. “We have all been part of the grand jury investigation and we have all participated.”

He added that the agency has handed over reams and reams of information to the grand jury.

“With some level of confidence, I can say no one who is currently with the authority is under any suspicion … of being involved in wrongdoing,” Flance said.

Federal prosecutors have been looking into a lucrative contract that the New Mexico Finance Authority awarded to the California company — CDR Financial Inc. — that made big contributions to political action committees formed by Gov. Bill Richardson.

The names of Dave Contarino, Gov. Bill Richardson’s former chief of staff, and David Harris have come up in media reports about the investigation.

Harris worked at NMFA until 2004.

In January, the investigation into CDR’s contract forced Richardson to withdraw as President Obama’s nominee for U.S. commerce secretary.

Photo by spiffie/Flickr

One state agency — the New Mexico Finance Authority (NMFA)– is refusing to release any subpoenas it has received as part of a federal grand jury investigation of allegations of pay to play in the Gov. Bill Richardson administration.

But another — the highest state agency, the Office of the Governor — is releasing such documents in response to requests made under the state’s Inspection of Public Records Act.

In fact, NMI made requests using the same language to both state agencies, which are both subject to the Public Records Act, and received the different responses.

What conclusion can be drawn from that?

Either the Public Records Act requires the release of such documents and NMFA is in violation of the act, or the act doesn’t require their release but the governor’s office is providing them anyway. NMI has asked the New Mexico Foundation for Open Government for help and advice, but the organization hasn’t yet taken a stance on the issue.

NMI has already reported that NMFA refused to release subpoenas it has been issued in the federal probe, in addition to the documents sought by such subpoenas. Last week, the governor’s office responded to requests similar to those sent to NMFA by releasing a Sept. 22 subpoena it had received in the probe. You can view the subpoena here.

NMI was among several news agencies that requested the subpoena after the Bloomberg news agency published a story in January indicating that it had obtained the document from the governor’s office in response to a public records request.

The subpoena is the first publicly released document to show that the investigation centers around CDR Financial Services. The grand jury is considering whether CDR received a state investment contract that paid almost $1.5 million in exchange for $110,000 in contributions to two of Gov. Bill Richardson’s political action committees and his 2006 gubernatorial re-election campaign.

In addition to indicating a focus on CDR, the subpoena names names. Richardson’s right-hand man, Dave Contarino, political adviser Michael Stratton, and J.P. Morgan banker Chris Romer, who is also a Colorado state senator, have all drawn the attention of the grand jury.

One of two NMI records requests sent to the governor’s office sought the Sept. 22 subpoena “and any other subpoenas issued to the governor’s office related to the investigation.”

After being provided with the Sept. 22 subpoena, NMI asked whether there were any others, to which Marcie Maestas, the governor’s records custodian, replied in an e-mail, “We have provided all the documents that are responsive to your request.”

The second NMI request

NMI’s second, broader request to the governor’s office sought “all documents, including subpoenas received by the Governor’s Office, related to any federal investigation into the letting of state contracts.” In response to that request, the governor’s office provided only the Sept. 22 subpoena and did not indicate that any other records responsive to the request existed.

But other records that would appear to relate to the federal investigation do exist. The Associated Press and the Albuquerque Journal requested documents provided to the grand jury in response to the subpoena and were told, in a denial of their requests, that documents were given to the grand jury but were exempt from the Public Records Act because of federal rules governing grand juries and “countervailing public policy considerations” including “this office’s effort to cooperate and not unduly interfere with a federal grand jury investigation.”

That language is similar to that which the governor’s office used recently to deny a request from The Santa Fe New Mexican for documents related to the office’s dealings with CDR.

Asked why the governor’s office responded to NMI differently than it did to the AP and Journal, Richardson spokesman Gilbert Gallegos wrote in an e-mail, “We interpreted (NMI’s second) request to have just asked for the subpoena, not the underlying documents. If the intent was otherwise then (NMI) should have been more clear. The Journal’s request was very clear. So was the A.P.’s request.”

Gallegos has not responded to a follow-up question asking why “all documents … related to any federal investigation” would not include documents the grand jury sought in its subpoena.

That’s what Joe Gosline said he was told when he inquired in 2004 about how CDR Financial Services went from scoring in the lower half of a group of companies that bid on a lucrative state bond contract to being recommended for the job, according to a weekend article in the Albuquerque Journal.

The claims of Gosline, a former controller and chief financial officer for the New Mexico Finance Authority, deepen the mystery about how the company won the contract — which is, of course, the subject of a federal grand jury investigation into allegations of pay-to-play in the Richardson administration. The grand jury is asking whether CDR received the state investment contract that paid almost $1.5 million in exchange for $110,000 in contributions to two of Gov. Bill Richardson’s political action committees and his 2006 gubernatorial re-election campaign.

Gosline has a wrongful termination lawsuit pending against NMFA, the Journal reported. He was fired in 2007 for allegedly sending sexually explicit e-mail and visiting Internet dating sites while at work — allegations he denies.

Regardless, he was one of two NMFA employees listed on a March 10, 2004, memo recommending the hiring of CDR, a memo written by then-Chief Financial Officer Keith Mellor. But Gosline says there’s much more to the story.

“Gosline said he ‘wasn’t pointing fingers at anyone’ but said he never recommended CDR,” the Journal article states. “Gosline said he had talked to Mellor after the original scoring and both agreed that CDR had placed in the ‘middle to the bottom’ of the firms that submitted proposals. Gosline said he asked Mellor about the change in the ranking and was told something to the effect of, ‘Don’t ask me how the scoring got like this.’”

There’s more. Read the article by clicking here.

Photo by spiffie/Flickr

Though at least two other state agencies have publicly released similar documents, the New Mexico Finance Authority is refusing to hand over subpoenas it has been issued in the federal investigation into allegations of pay-to-play in the Richardson administration.

The finance authority also refuses to release the documents sought by such subpoenas.

NMI sought the records in two separate requests made under the state’s Inspection of Public Records Act. The first, a narrow request, sought only subpoenas that have been issued in the federal investigation. The second, broader request sought all subpoenas related to any federal investigation received by the finance authority, and all documents requested in those subpoenas.

“The New Mexico Finance Authority is denying your request, as release of the requested documents could compromise or impede an ongoing federal investigation,” Reynold Romero, general counsel for the finance authority, wrote in separate letters denying the requests.

The denials contrast with the release by the Governor’s Office last month of a Sept. 22 subpoena it was issued in the federal investigation. The  Bloomberg news agency obtained the document in response to a public records request. In addition, the University of New Mexico released to Bloomberg a subpoena it received in a separate federal investigation, also in response to a public records request.

The state’s public records act applies to all government agencies, including NMFA. It covers the vast majority of government records but allows a few exceptions, including patient medical records and certain types of law-enforcement records.

In an interview, Romero said he is “not familiar” with the release of subpoenas by the other state agencies, adding that, “We’re just dealing with ours.”

Asked to cite the exemption to the public records act that allows denial of the NMI requests, Romero didn’t name any of the specific exemptions listed in the act. He instead cited the provision that allows exemptions “as otherwise provided by law.”

“Our position has remained that we don’t want to impede or in any way compromise the investigation,” Romero said.

Similar requests NMI made to the Governor’s Office are awaiting a formal response, which, under the act, is due this week.

Newspaper’s requests also denied

Last week, the Governor’s Office refused to release documents to The Santa Fe New Mexican related to the office’s dealing with CDR Financial Products, the company at the center of the federal probe.

A grand jury is investigating whether the California company received a state investment contract that paid almost $1.5 million in exchange for $110,000 in contributions to two Richardson political action committees and his 2006 gubernatorial re-election campaign.

In denying two requests from The New Mexican, that office’s records custodian, Marcie Maestas, wrote that the office “is prohibited from releasing records of this nature pursuant to the federal rules governing grand juries. There are countervailing public policy considerations that warrant denial of your request as well, including, but not limited to this office’s effort to cooperate and not unduly interfere with the federal grand jury investigation.”

The finance authority, meanwhile, responded to a records request from The New Mexican by saying it had located “some of your requested documents” but needed more time to complete the request, according to the newspaper’s Saturday article.

Leonard DeLayo, executive director of the New Mexico Foundation for Open Government, was quoted by The New Mexican as saying he’s not sure whether the documents requested by the newspaper are exempt from the public records act. NMI has written the foundation seeking advice on whether NMFA violated the public records act in denying NMI’s request.