As I expected the Albuquerque Journal will take full advantage of Attorney General Gary King's blunder in announcing his candidacy for Governor with in days of announcing an investigation of Governor Martinez's allegedly corrupt bid rigging in the awarding of the Albuquerque Racino contract. Gary actually called me yesterday to talk about his candidacy and he was pretty adamant that people would see the two don't conflict. I doubt that seriously and the Journal today started what will be a constant attack on Gary for being conflicted. Gary gave them some low hanging fruit.
This New Mexico Finance Authority scandal involving faked audits and a missing employee is very strange. We are only getting small snippets of this story and I have a feeling that it will blow before long. It might be as bad as the 1970's scam that a long time state employee pulled off when he created a fake utility district and then funded it with millions of dollars. Then the money disappeared about the same time as he did. It is amazing that government and business still don't have or exercise a system of checks and balances on absolutely everyone in their employment.
3 comments:
Hi Jim. I work in accounting and this story regarding the NMFA has been the topic of discussion all week. The issuance and sales of securities is under the authority of the SEC, so the controller and possibly others will be going to jail. That a bond issue and financial statements were issued to third-party users and both the Finance Authority Board and FA staff were somehow unaware does not compute. Who sits on the audit committee? Did they not engage a firm to do the work? Was the work bid out but then terminated by the audit firm?
This event would seem to go well beyond a faked audit report. Processes and controls at the Authority can be assumed to be so weak (or non-existent) that no figures, over the last 18months at least, can be relied on to be accurate. For this reason credit agencies will downgrade the debt rating of these bonds accordingly and the value of NM debt holdings will fall if it already hasn't. Creditor lawsuits will be filed to recoup damages, and the cost of future issues of NM debt will rise through increased interest rates. Will the state even be able to issue or rollover debt in the short-term? It doesn't seem likely, who would buy it?
With Mr. King's history of doing little to nothing during his tenure as AG, it's doubtful he'll win much public support in his run for governor. There are a lot more capable and qualified dems that could give Governor Martinez a run for her money.
Just a reminder that Susanna Martinez got started in politics when she ran against the man who fired her, the DA down there in Las Cruces.
That's also when she bailed on the Democratic Party and became a Republican. She tells the story that some Republicans bought her lunch and she realized they had the same values.
It doesn't take much imagination to visualize how that conversation went. Seeing that she intended to run, they came to her and said, Oh, Susanna, you'd have a better chance of unseating him if you ran as a Republican, and instead of fighting against your party's establishment you'd have one behind you.
Then they realized the demographic advantages of a good looking female Hispanic Republican and voila she was governor.
Perhaps Gary King should dye his hair light brown.
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