NM Senate panel wants information from agencies on lawsuit over failed investments

NM panel looking into investment scandal

SANTA FE, N.M. — A Senate committee is looking into allegations that state agencies are stonewalling a whistleblower lawsuit that seeks to recover money from failed public investments.

The Senate Judiciary Committee on Thursday agreed to ask the State Investment Council, the Educational Retirement Board and the Risk Management Division to provide contracts for lawyers hired to defend state officials named in the lawsuit.

Sen. John Ryan, R-Albuquerque, said lawmakers want to know the scope of the lawyers’ work and will try to determine whether the state should be paying legal bills for public officials in a lawsuit that seeks to recover lost investments on behalf of taxpayers.

The committee also will send a letter asking agencies to explain how they’re handling public records requests for e-mail and other documents related to the lawsuit.

Frank Foy, former investment officer for the Educational Retirement Board, brought the lawsuit alleging that political considerations in Gov. Bill Richardson’s administration improperly influenced investment decisions.

Foy and his attorney, Victor Marshall, told lawmakers that agencies are obstructing the lawsuit by not quickly turning over documents in response to requests under the state’s Inspection of Public Records Act. Marshall, a former Republican state senator, also said the case has become bogged down in state district court in Santa Fe.

“We feel like we are fighting city hall,” Foy told lawmakers. “The Richardson administration is fighting us every step of the way.”

He said, “They are spending huge amounts of taxpayer money to prevent us from getting money back for taxpayers and school teachers. One has to ask, why?”

State officials who are defendants in the lawsuit, including Richardson administration appointees like former state investment officer Gary Bland, have said there was no wrongdoing on their part and they contend Foy is a disgruntled former employee. Bland resigned last year under pressure from Investment Council members. The governor’s former chief of staff is a defendant in the case, although Richardson is not.

Charles Wollmann, a spokesman for the Investment Council, disputed Foy’s allegation that the agency was stonewalling the lawsuit. The council welcomes the opportunity to “set the record straight” with legislators about the case, he said.

He also said Foy could “personally profit” if the lawsuit is successful because he will receive a share of any money collected.

A federal grand jury and the Securities and Exchange Commission are investigating public investment deals in New Mexico. Wollmann said the agency is providing materials in response to federal subpoenas and that’s a higher priority than the records requests related to the lawsuit. However, he said thousands of pages of documents have been turned over to Foy’s lawyer but that far more have been requested.