Audit raises (millions of) questions

Ex-SOS Rebecca Vigil-Giron calls the disclosure of a draft federal audit a "smear" intended to derail her run for Congress.

SANTA FE -- A Democratic Party media consultant received an unauthorized fee of $1 million in 2004 from the Secretary of State's Office, according to a draft federal audit of voter education spending obtained by the New Mexico Independent.

The Inspector General of the federal Elections Assistance Commission is questioning the fee -- paid with federal money-- to A. Gutierrez & Associates, Inc. of Albuquerque saying it was not part of a contract or any contract amendments the firm had with the Secretary of State's Office.

Gutierrez and Associates produced TV and radio advertisements starring then-Secretary of State Rebecca Vigil-Giron that ran by the thousands in English, Spanish and Navajo leading up to the 2004 general and 2006 primary and general elections.

That work netted Gutierrez & Associates more than $6 million in payments, or roughly a third of all federal Help America Vote Act (HAVA) money sent to New Mexico to assist in planning and running the 2004 and 2006 federal elections, according to the draft audit. Despite that, the audit found that the Albuquerque firm could account for only $2.6 million in spending for 44,500 spots of the roughly $4.8 million budgeted for production and voter education, according to state documents and the summary of the audit findings.

And the state of New Mexico may be on the hook for some of that money, the summary of the preliminary audit said.

The audit, which sought to assess how the Secretary of State's Office used more than $19 million in federal election funds, is supposed to be released later this month. But the Independent was able to review a government document summarizing some of the audit's preliminary conclusions.

"At this time we're going to reserve comment," a spokesman for the current Secretary of State Mary Herrera told the Independent. "We are hoping to get this situation behind us as soon as possible."

Vigil-Giron, now a candidate in the hotly contested Democratic primary for the 1st Congressional District, disputed the conclusions of the audit in separate telephone interviews Monday and Tuesday. She attributed the leak of the document to her political opponents using very colorful language. Publication of the preliminary findings would cause her to "burn and be tortured in front of my political opponents," she said. "This is going to smear me."

She described the summary "a sensitive document" that never should have gotten into the hands of a reporter and she wanted to know who leaked it. "... If this was not supposed to be made public, they need to find who leaked it," she said. "Somebody's head is going to roll."

Armando Gutierrez, a principal in A. Gutierrez & Associates, said in an email he is "unaware of any such report."

According to the phone company, a phone at the Albuquerque office of Gutierrez & Associates has been disconnected, as has a phone at a Corpus Christi, Tx. office.

Gutierrez, a well-connected consultant, has worked on three Democratic presidential campaigns over the past two decades, as well as for some heavy political hitters, ranging from Gov. Bill Richardson to the Democratic National Committee, according to his firm's website.

The draft audit cited three other issues in addition to the $1 million administrative fee and the alleged inability of the firm to account for all the money it was paid.

The audit questioned if Gutierrez and Associates was paid $323,000 more than allowed by contract. The auditors expressed concern that the Secretary of State had made two $186,000 payments for a training video the firm produced. The summary also found that the firm had billed the Secretary of State's Office for $373,000 in gross receipts taxes while only paying $55,000 in the taxes.

Vigil Giron disputed that the $1 million administrative fee violated state procurement codes.

"Administrative fees were a part of the contract," Vigil-Giron said. "It's not an unusual for a contract to ask for an administrative fee. His [Gutierrez & Associates] contract was prescribed by the AG's [Attorney General's] office. They signed off on everything."

Despite Vigil-Giron's remarks, the administrative fee is not mentioned in several contract documents that were turned over by the Secretary of State's office Tuesday following a records request by the Independent. Those documents included a seven-page contract between Vigil-Giron's agency and Gutierrez's firm from August 2004 and two 2006 contract amendments.

It appears the administrative fee was agreed to around the same time as the original contract was negotiated. In an Aug. 26, 2004 letter to Vigil-Giron, a few days prior to the finalizing of the original contract, Gutierrez acknowledges the 17 percent administrative fee negotiated two days earlier. "As you suggested, this will streamline the billing process with your office," Gutierrez wrote.

Vigil-Giron said there may be explanations as well for the finding of a $323,000 overpayment. She attributed that to an accounting error and said the money may have been "drawn down from the wrong account. I think so. That happened after I left."

Don Francisco Trujillo III, currently deputy secretary of state, has said publicly that all the HAVA money the state received was spent during Vigil-Giron's tenure and prior to Mary Herrera taking office in January 2007.

As for the duplicative payment for a training video, Vigil-Giron said "we actually had to redo a portion of that HAVA video, and that was something I asked for. We had to redo about 10 minutes of it."

She added that it might explain the finding of a duplicative payment of $186,000.

Vigil-Giron added that she will rebut the conclusions in a response she plans to submit to the Inspector General's office. She said she will review records at the Department of Finance and Administration as well as at other agencies to fashion her response.

Late Tuesday, elections assistance commission spokesman Bryan Whitener said Vigil-Giron's response would not be included in the Inspector General's final report but would be given to the commission's executive director.

Vigil-Giron also defended the work done by A. Gutierrez & Associates during her interviews, saying "They did an outstanding job."

Others agree on Gutierrez's talents as a media consultant and the reputation he has built.

He has a "fantastic reptuation," said Ann R. Beser, a partner in a South Carolina firm, who has worked with Gutierrez on occasion in the past.

"He was terrrific to work with. He knows his stuff," Beser said in a phone interview. "He's upfront. There are no games played. He does what he says he will and he does it well. He's understands what he is doing. We go back a very long time."

It is unclear if New Mexico will be asked to repay funds allocated for the Help America Vote Act. Once the final audit is made public, the Elections Assistance Commission "will make the decision as to whether any funds will need to be repaid," Whitener said Monday.

The Elections Assistance Commission is a bipartisan federal commission whose members are chosen with input from both parties.
Democratic congressional leaders and Republian congressional leaders recommend names, the president appoints based on those recommendations and the U.S. Senate must confirm the president's appointments, Whitener said.

Curtis Crider, the EAC's Inspector General, was chosen by the four-member Elections Assistance Commission made up of two Democrats and two Republicans, Whitener added.

The findings from the final audit report, scheduled for release later this month, threaten to cast a shadow over Vigil-Giron's legacy as a three-term former Secretary of State and her bid for the Democratic congressional nomination.

Vigil-Giron is competing against former Albuquerque City Councilor Martin Heinrich, former state Department of Health Secretary Michelle Lujan Grisham and Albuquerque attorney Robert Pidcock in the race to succeed Republican Heather Wilson, who is giving up her seat to run for the Senate.

"This is Mary Herrera trying to ensure that (Rebecca Vigil-Giron) doesn't win the demo nomination for congress," Gutierrez wrote in an e-mail. "If you want to be part of that, knock yourself out."

This is not the first time that Vigil-Giron's spending on election ads have stoked controversy. In February, Herrera told reporters that Vigil-Giron had spent more than $6 million in federal money to produce and run public service announcements for TV and radio— often featuring herself— in advance of the 2004 and 2006 elections.

Then, as now, Vigil-Giron defended the ads and their frequency, saying they educated voters and spurred voter registration.

And it isn't the first time that her practices as secretary of state have come under scrutiny.

Vigil-Giron's office was cited last year for shoddy budgeting practices in a Department of Finance and Administration review that led to a budget shortfall that crippled her former agency.

The problems, outlined in a seven-page memo, included failing in some instances to earmark money for services and goods with purchase orders, so no money was available when bills came due; and in other instances, earmarking money through purchase orders but then spending the dedicated money on something else, leaving no money to pay bills once invoices came due.
 

Original documents

To view one page of a summary of findings from the draft audit of the Election Assistance Commission, click here.
To view the Secretary of State's contract with A. Gutierrez & Associates, click here.
To view the letter referencing the 17% administrative fee, click here.

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