Thursday, November 19, 2009
CDR was the focus of attention when Gov. Bill Richardson’s nomination to be Secretary of Commerce was derailed. The governor’s name was withdrawn after it became known there was an ongoing federal probe into the relationship between CDR and the New Mexico Finance Authority (NMFA) and contributions to PACs controlled by Gov. Richardson.
That investigation was concluded in the late summer of 2009. U.S. Attorney Greg Fouratt sent a private letter to attorneys representing individuals under investigation, stating no charges would be filed. The letter, which was leaked to the news media and for which Mr. Fouratt was criticized, contained the little noted clause that it was “limited solely to each party’s conduct in NMFA’s award of financial work to CDR in 2004.” In light of the indictments returned in the Southern District of New York, it appears the clause was underappreciated.
The entire CDR controversy is long, complex and, for many, just too hard to understand. That is unfortunate, as I believe it is a significant issue that could have tremendous impact on New Mexico. Previous news articles have focused on the activities of NMFA, GRIP Bonds, friends of the governor, and contributions to political funds controlled by Gov. Richardson.
At this time I would like to look closely at the actual indictment returned on Oct. 29 in the Southern District of New York (SDNY). An indictment is a formal, written accusation of wrongdoing.
The SDNY is a federal court that covers a portion of the State of New York. The SDNY includes Manhattan, the Bronx and other counties near New York City. Populous states like New York often have multiple federal court districts, but here in New Mexico we have one federal district for the entire state.
The U.S. Attorney’s Office for the SDNY has long been considered a flagship office for the prosecution of federal financial crimes. This makes sense as Manhattan is where Wall Street and many major financial corporations are located.
This CDR indictment alleges nine specific crimes (or counts) were committed by Rubin, Wolmark and Zarefsky. The indictment is the result of an investigation by the FBI and the IRS in which evidence was presented to a federal grand jury. That grand jury concluded there is “Probable Cause” to believe the named defendants committed the specified crimes.
In my 24 years in the FBI, I have never seen a “ham sandwich” indicted as is routinely alleged by those who wish to trivialize a federal grand jury indictment. This is very serious. Top officials in the Department of Justice signed off on this document.
The CDR Indictment
The actual indictment is 39 pages long. The beginning has a very useful background section that explains the role of “brokers” in the issuance of municipal bonds.
Towns, school districts, housing authorities, and other government agencies, referred to as “issuers,” raise money for specific projects by selling bonds. These bonds are loans the agency will pay off over time. The money raised by selling these bonds is spent over time. The “issuers” will routinely invest the unneeded proceeds to earn money.
Think of it like getting a home improvement loan to cover numerous repairs, and you put the money in a savings account until you need to move it to your checking account. These “savings account” investments are done with financial institutions like banks and insurance companies, who are called “providers.” The individuals who represent these “providers” are called “marketers.”
“Brokers” like CDR are supposed to get the best deal for the “issuers” by getting multiple offers from numerous “providers” as bids submitted by “marketers.” In a perfect world a number of “marketers” send in sealed bids promising specific returns on investments to the “broker.” The “broker” then opens the bids and picks the “provider” offering the best deal.
The federal grand jury indictment charges CDR (the “broker”) rigged the bids with corrupt “providers” through crooked “marketers.” “Issuers” were cheated out of a fair return on the taxpayer’s money, while CDR and their cronies got kickbacks, the indictment alleges.
It is claimed in the indictment this scheme started back in 1998 and was ongoing until at least November 2006. The first count listed in the indictment is “restraint of interstate trade and commerce,” which addresses the bid-rigging allegation.
Counts 2 and 3 are conspiracy. “Conspiracy” is an agreement to commit an illegal act. That agreement is a crime in itself if some action occurred to fulfill the agreement, an “overt act.” Because it is an ongoing criminal enterprise, events which occur outside the statute of limitations can be presented at trial. The government must prove the agreement existed and that an “overt act” was committed (unless it’s a drug crime).
Count 2 alleges an agreement between CDR and a company only identified as “Provider A.” The overt acts allegedly involve CDR executives and “Marketer A,” the indictment says. Phone calls and events that occurred in late October 2003 are listed in the indictment.
Count 3 alleges a similar scheme involving “Provider B,” Marketers B-1 and B-2 and a “state housing agency.” This count identifies a phone call from New Mexico on May 20, 2004, as an overt act. Although reference is made to a “state housing agency” together with a call from New Mexico, there is nothing in the indictment that links this call to the ongoing Region III Housing Authority investigation and the indictment of former State Rep. Vincent “Smiley” Gallegos.
Marketer A, B-1 and B-2 are not identified, and this is usual because they are probably cooperators who have cut a deal. The identity of Marketer A, B-1, B-2 and Provider A and B will be known prior to trial. The identities of the victim “issuers” also are not revealed because that could lead to figuring out who is cooperating.
Counts 4, 5 and 6 are “Wire Fraud,” which means money allegedly was transferred electronically across state lines to further this criminal plan.
Count 7 alleges “false statements” by Evan Zarefsky to the FBI in November 2006. Two points here are:
• Never lie to the FBI. It’s a crime, even if you’re not under oath.
• This was a criminal act committed in late November 2006, which places the conspiracy well within the five-year statute of limitations and allows the prosecutors to bring in all of the criminal acts that occurred six, seven or more years ago.
Count 8 alleges interfering with administration of internal revenue laws. One of the acts presented in this count refers to a “state housing agency” and a phone call on May 19, 2004.
Finally, Count 9 alleges “Fraudulent Bank Transactions” in which the kickbacks to the CDR executives were concealed.
This criminal indictment paints a picture of a sophisticated criminal enterprise which operated in many states, including New Mexico.
While CDR’s involvement with NMFA was not addressed, these charges from New York suggest the existence of a pattern of criminal activity that was occurring at the same time as CDR involvement in New Mexico. So what did happen in New Mexico? Perhaps we will learn much about the inner workings of CDR as the New York case unfolds.
Significantly, Mr. Fouratt’s letter also did not “preclude the United States or the grand jury from reinstituting such an investigation without notification.”
David Rubin, Zevi Wolmark and Evan Zarefsky will be under tremendous pressure to reach a deal with federal prosecutors. As is always the case, the individuals who come forward first with the most useful testimony will get the best deal. Their attorneys know this.
These charges, together with the recent guilty plea by Saul Meyer in a case by the New York attorney general’s office, plus the Region III Housing Authority case by the New Mexico attorney general, promise to keep allegations of corruption in the forefront of the news.
The next year could be very interesting for New Mexico politicians.
Sunday, October 25, 2009
As we are embroiled in a serious budget crisis, it is important for voters to have a clear understanding of the State budget process. Informed voters are effective advocates and the taxpayers of New Mexico must become both informed and effective.
Some very helpful information sheets have been prepared by the Legislative Finance Committee (LFC), a permanent agency of the legislature. The LFC is comprised of professional economists and analysts who work with the executive branch agencies to prepare the State budget each year. These information sheets include a Budget Glossary, “the Fiscal Structure of New Mexico”, and a collection of essays called “Finance Facts”.
The fiscal year for the State of New Mexico goes from July 1 to June 30. The fiscal year is the year in which June 30th falls. We are in FY2010. FY2009 ended on June 30, 2009, FY2008 on June 30, 2008, etc.
The terms “recurring dollars” and “one-time” dollars are used a lot. An example of a “recurring” dollar as an expense would be the salary and benefits of a state employee. A “recurring” dollar as income would be revenue from the state’s royalty from an oil well on state land. A “one-time” dollar would be the money spent or not-spent (saved) on repairing a highway. The concern is that we are using “one-time” dollars (saved by not fixing the road) to cover “recurring” expenses (the state employee salary). Eventually we run out of these “one-time” funds and we still have the “recurring” expenses.
A little background is appropriate at this point. In FY2004 when the first budget was passed under Governor Bill Richardson/Lt Gov Diane Denish, the State spent $ 4.127 Billion. By FY 2008, the last year before revenue began to drop, New Mexico was spending $5.994 Billion, an increase of 45 percent.
Then the economy started to collapse. Estimates of the amount of revenue the State could expect to collect began to fall. The estimate for FY 2010 dropped by $286 million between last October and December when in was projected that FY2010 would produce $5.733 Billion. The collapse in expected revenue continued and accelerated: February - $ 5.484 Billion; August - $ 5.052 Billion; this October - $ 4.833 Billion.
To put it bluntly our State tax revenue has cratered. We have gone from about $6 Billion to about $4.8 Billion, a drop of $1.2 Billion or around 20 percent in just over sixteen months. We are now expected to have the same income as we did in FY 2006 if things don’t continue to worsen.
During this Special Session the legislature was to address two primary issues. The first was to transfer funds from the reserve accounts the State maintains to cover unexpected (by some) shortfalls for FY 2009. The final audited numbers for FY 2009 are not in yet, but it is estimated that the State needs to take about $210 million out of the reserves (think of it as a savings account) to cover operating expenses (think of this as the checking account).
The second issue was to reduce expenditures for the current fiscal year, FY2010, because tax revenue flowing into the State Treasury has failed to meet projections. This problem was not unexpected. In fact, in March 2009 ALL of the Republicans in the House of Representatives voted AGAINST the FY2010 budget. We knew then that it did not deal with the problems this State was facing.
Spending for FY 2010 was cut, but only enough to cover about a third of the shortfall in revenue. The rest is to come from “one-time” dollars. Like many others, I believe we have simply delayed dealing with the real problem, and as a result, it will get worse.
Regarding the FY 2009 shortfall, the Richardson/Denish administration wanted what amounted to a blank check to pull funds out of reserves for both FY 2009 AND FY2010. That passed, but without a two-thirds majority. Therefore, the money cannot be moved for ninety days, and many of us believe that the funds cannot be taken legally from the restricted reserves. All of the Republicans voted against this transfer. This battle did not get the attention it deserved and could be the cause of some lawsuits and/or another special session.
In January we are to prepare a budget for FY2011. Many of us fear the problems will continue to get worse. Taxes are not expected to be back to FY2008 levels until FY2015 or later. Also in FY2011 the Federal stimulus money ends. This administration has been using these dollars to cover shortfalls.
To my “Tea Party” friends, you need to make sure your voices are heard in Santa Fe before and during the thirty day session. I guarantee you that the folks who want to raise taxes are speaking often and loudly.
Sunday, August 23, 2009
This event went unnoticed by most individuals except for those who were directly impacted by that horrible act.
In December of 1988 I was assigned to the criminal/reactive squad of the Washington field office of the FBI. At the time we were located in a ratty office building in a depressed part of Washington D.C. Squads were arranged in open bays with shoulder height partitions separating one squad from another. There was not a lot of rhyme or reason for the location of the squads and my squad was located next to one of the terrorism squads.
Pan Am 103 went down on December 21st carrying people home-bound for the Christmas holiday. Initially it was treated as a simple air disaster. Something routinely handled by the NTSB. Within a week it became obvious it was not mechanical failure that doomed those people, but rather a horrid act of terrorism and thus the responsibility of the FBI. Washington field office was designated as the “office of origin” for this investigation.
It was between Christmas and New Years, and I, unlike most of my colleagues, was working in the office. I had a minor case that had some court hearings scheduled. I remember the Supervisor of the terrorism squad stepping out of his office, looking around, seeing me and calling my name. That was how I was selected for the task force working Pan Am 103 - The case we knew as “Scotbomb”.
Over twenty years have passed and memories can fade, but some images never leave you. These events that would not make a good movie. There were no high speed chases or kicking in doors but there was drama… of the heart and soul.
I can recall sitting around the office that first Saturday, together with a couple of other agents, crafting a massive teletype to the field offices where victim’s homes were located. Within days a command post was established and a team of agents pulled together from various squads.
The plane went down in Lockerbie which is served by the Dumfries & Galloway Constabulary. This department is the smallest of the eleven law enforcement agencies covering Scotland. Scottish authorities put together a task force drawing officers from all of these departments.
A team of four or five detectives from Scotland came to Washington D.C. and were part of our command post across the hall from the SAC’s office.
I remember the Scots had at the time a very advanced data base system which was constantly updated by one detective. We, the FBI agents, were “cutting edge” in that we had all teletypes uploaded into a text searching program.
My job in those days before DNA testing was to coordinate the activities of FBI agents who went to victim’s homes to try and collect latent fingerprints which could be used to identify bodies. Eventually the officials in Scotland dispatched to the U.S. a special team of detectives lead by the commander of the Criminal Investigation Division (CID) of the Dumfries & Galloway Constabulary Their purpose was to personally tell the families of nine or so American families that they were not going to get their loved one’s complete body back. They would only get a portion. It was a “class act” and one that still impresses me today. My job was to arrange to have an FBI agent accompany each detective. While that process was going on, clearance was received to approach another ten or so families and tell them they would get nothing back.
Years later, I ran into one of the FBI agents who went out on one of those visits. He shared with me that they called one family ahead of time, told them they were coming, and when they got there, found two chairs waiting for them in the living room. Fifteen or so family members faced the agent and detective seeking answers to questions these law enforcement officers simply could not provide.
Another responsibility for me was to spend a week at the Pan Am reservation center in Northern Virginia. Every day a Pan Am employee and I went through reservation by reservation on the computer as I prepared a separate report detailing all the data for each of the reservations. Within a few years Pan Am would no longer exist as an airline, destroyed in part by trial lawyers hungry for spoils from this wounded institution of American aviation - a victim for a second time.
I recall our cramped little command post with no windows and tacky furniture was the scene of countless phone calls, meetings, and writing. On the wall was an 8 by 10 color glossy photo from the crash site of an empty shoe of a toddler. There are many other memories that all come crashing back in moments of quiet reflection.
I was released from the task force shortly after I completed the review of the reservation data. Tidbits from agents still working the case were relayed to me over the years. There was talk of a special trip to Malta and other breakthroughs.
In 1992 I transferred to the FBI office in Roswell and eight years later it looked like I might go to the Netherlands to testify in the Pan Am 103 trial. I was interviewed over the phone by a defense investigator, but I did not need to travel. One defendant, Megrahi, was convicted and another acquitted.
For me, the most compelling memory is of a conversation I had with the commander of the Dumfries & Galloway CID unit. I don’t recall if it was when he came to our home for supper one night or as we sat quietly in a bar with a cold drink, as cops often do.
The plane had crashed at night. Wreckage and bodies were strewn around the countryside. Eleven residents of Lockerbie were dead including one family completely wiped out. A local ice-skating rink was designated as a temporary morgue. The decision was made, and orders were issued, that the bodies were to be left untouched until daylight. However, the first half dozen or so bodies were all children brought in during the night. In spite of the orders to leave the corpses untouched until dawn, people would come across the body of a small child, and just could not leave them lying in the cold. They picked them up and carried them in their arms to the mortuary. I sat there frozen as this story was related to me, and it has haunted me for over twenty years.
There are good and noble people in Scotland. I have met some. Their honor has been soiled by the actions of a vile politician.
We constantly hear calls for pity, compassion, and forgiveness for criminals. These demands make a mockery of the pain and suffering of victims. Real justice demands the evil doer be held accountable. We must never forget that. Forgiveness is meant to be a personal act of release. Pity and compassion are to be reserved for the victims of misfortune. We have become uncomfortable with the task of holding people accountable for their actions. It is hard work plus we don’t want to be seen as “judgmental”.
In this day and age, we bestow compassion on the betrayers of public trust, and pity upon cold blooded killers. By doing so, we mock the grief and agony of the victims of crime. Some tell the victim to suffer in silence or just “let go”. That is wrong. The victim must be valued and vindicated if they, and the community, are to heal and know serenity or calm again. For as the saying goes “No justice, no peace”.
Monday, June 1, 2009
All of that just in the last week!
While I could drone on with “How I spent my summer vacation” tales, I would rather offer for your consideration some works by other writers. Over the past few months I have discovered some articles that I have found particularly interesting and thought-provoking. One such essay is a piece by Bill Kristol titled “Let 1,000 Republican Flowers Bloom”. I came across this during the legislative session. I have wanted to share it for some time.
Sunday, May 17, 2009
Taxpayers Deserve to See What They are Paying For
As a first time State Legislator, I have been surprised by the intensity of the interest in my position on the film industry subsidy, or as some call it “The Film Incentives.” The film subsidy program requires the State to pay film production operations 25% of their qualifying expenses. This program will cost New Mexico over $50 million. The question is “Is it worth it?” When my legislation to repeal the film industry subsidy died in committee on March 3rd, I expected that to be the end of the matter. However, a few days ago, Mr. Eric Witt, the Governor’s Deputy Chief of Staff, published an essay critical of my position.
Several assertions in Mr. Witt’s column were incorrect. He touted the independence of a study done by the firm of the Ernst & Young and claimed that the study done by the Arrowhead Center at New Mexico State University is not quite as independent because its funding comes from the Legislature. But Witt fails to acknowledge that the Ernst & Young study was contracted by the New Mexico State Film Office and the State Investment Council (SIC). Both of these agencies are connected to the film subsidy program.
The Ernst & Young study claims that for every taxpayer dollar spent, the State or local government receives $1.50. Interestingly, the Ernst& Young study asserts that the film subsidies increase tourism, generating $.55 out of the $1.50, over a third of the purported benefit. However, there is no direct economic evidence to support this claim. This is just one example of the “curious” conclusions in the Ernst & Young study.
SIC Loan Program
Another part of the film subsidy program is the loan program administered by the troubled State Investment Council (SIC). Instead of interest payments to the State’s permanent funds, movie companies are to pay a percentage of the film’s profits. Amazingly, none of the films that have received “zero interest loans” have shown a profit. This SIC program cost the State over $12 Million in 2008.
Following the debate of my legislation, I had a dialog with twenty to twenty-five individuals from the film industry. Unfortunately Mr. Witt was not present. The position of the opponents of my legislation after this two hour meeting was that there was no room for compromise with the industry. No one was willing to consider a cap on expenditures or a phase out of the program.
Mr. Witt is correct in stating that advocates of this program are happy to tout its reported benefits, but there is no way to obtain any real details to verify their claims. Early in the session I called and asked for data on film production reimbursements made by the Tax and Revenue Department. I received no information from my phone calls. Finally after three letters to the Secretary for Tax and Revenue, I received a list that consisted of seventy-two payments to film production companies. The Tax and Revenue Department has so far refused to provide me with the address, officers, registered agents, or owners of these film companies. Tax and Revenue has also refused to provide details regarding the qualifying expenditures made by these companies. This refusal to provide information essential to a fair evaluation of the program is the basis for my concern about secrecy.
Following my first phone call to the Tax and Revenue Department, I received a personal visit from Mr. Witt. During that visit, Mr. Witt stated it might be possible for him to arrange a situation where I could look at data unavailable to the public. However, I could not make copies, I would be prohibited from taking notes, and I would be responsible should the data make it into the public domain. I declined his offer.
The Need for Transparency
During my first session in Santa Fe, I actively pursued efforts to increase transparency in our State government. I submitted a bill to put the State budget online. This bill was tabled, but a memorial to study this concept was passed. I also did webcasting from the House Judiciary Committee. I firmly believe transparency is critical to clean, fair, and effective government. There are individuals who seriously support the incentive program for the film industry. There are others who have grave doubts about its appropriateness. The public is bombarded with conflicting claims and statements. The only real way to resolve this is with total transparency.
The Film Incentive program is estimated to cost us $50 million in 2010 at a time when state employees are taking a pay cut. The District Attorneys who are responsible for protecting us from dangerous criminals will have a 1.9 % budget cut this year. Many other agencies are also facing larger cuts. This film subsidy program is unique in that no other budget item in our state takes so much money from the public treasury with so little public accountability.
Who are getting these payments? What is the address of the production company getting the taxpayers’ money? Who are the officers/owners of these companies? Exactly what have they done to qualify for your money? Where and from whom did they make purchases and when? These are the types of questions I believe need to be answered about a subsidy program that will cost New Mexico taxpayers $50 million this year and more in the future.
The Film Incentive program demonstrates how the current lack of accountability and transparency raises doubts and concerns in the minds of the public. Whose interests are being served? New Mexico Taxpayers deserve to know the answers.
Monday, April 27, 2009
Let's just get more information
At one point during this past legislative session a flood of emails, phone calls, and office visits deluged the capitol begging, pleading, and on rare occasions demanding that a particular piece of legislation be stopped. We were warned that, should this particular bill be allowed to become law, the effect would be catastrophic for New Mexico.
I am not referring to a sweeping piece of social legislation such as Domestic Partnership, the Freedom of Choice Act, or the Death Penalty. Rather the bill that produced this tsunami of reaction was a revenue bill--my revenue bill. HB 725 was a bill to repeal the Film Production Expense Rebate.
Although the bill was tabled in the first committee, some individuals (including a recent columnist) continue to demand that this subsidy must not be questioned, criticized, or touched. Any who take an opposing view are to be mocked and vilified.
Currently the State of New Mexico pays film production companies for certain activities. The most prominent part of the existing law is a 25% rebate from the State for all qualified direct production expenditures. In 2003 this program cost $1.1 Million. By 2008 the cost had increased to $47 Million, and it is expected to grow to $54 Million in 2010.
While it is obvious that certain individuals and companies have profited handsomely from these subsidies, the issue before this legislature and this administration is how to be good stewards of a dwindling supply of increasingly harder-to-produce tax dollars--dollars squeezed from a shrinking work force.
The two studies of the New Mexico Film subsidy program have produced widely differing conclusions. One study claims the return to taxpayers is $1.50 for every tax dollar paid out. The other study identifies the return to be only 14.5 cents on the dollar. There have also been additional studies of the effectiveness of these subsidies in Louisiana and California. The Louisiana study puts the return at 16 to18 cents on the dollar.
Much attention has been paid to the fact that California, in the middle of a budget crisis, has adopted new incentives to woo back film production. However, little has been said about the report from the California Legislative Analyst’s Office. The California Legislature was advised to “reject the film tax credit”. That advice was ignored.
The recently adopted New Mexico state budget shifts an increased burden onto our public workers. These workers will now have their pay reduced by 1.5% to save the state $40 Million. In addition, the budget calls for dipping into the state’s savings to the tune of $136 Million.
How can this administration call on sacrifices and savings depletion while at the same time give away $54 Million to one protected industry? How do we face the struggling small businessman, the laid-off factory worker, or the state policeman and say that he or she must sacrifice, but this program cannot be questioned?
Obviously there are different perspectives on this issue. The studies mentioned above have one showing a return TEN times greater than other studies. Which is correct? I believe the answer can be found in closely reviewing the details of this program which are now hidden in secrecy. Exactly who is getting these tax dollars? What exactly have they done to justify getting your tax money? What is the actual benefit to the taxpayers of New Mexico?
This is a serious public policy problem that must be examined and resolved. That is not done by hurling verbal abuse at those who dare to express concern or think this is a grave problem. In my prior job with law enforcement, answers to questions like these were called “evidence,” and it is so much more helpful in public debates than witty comments or vindictive insults. Let’s have an open and public examination with a sober and serious discussion. I believe that is what the public deserves, and I believe that is how effective public policy is made.
Monday, March 23, 2009
The last week began with a Sunday floor session starting early in the afternoon and going well into the evening. We continued to have daily committee hearings and floor sessions up through Thursday. On Wednesday and Thursday we worked until midnight. Friday’s floor session began at 10AM and went without break until 3:30 Saturday morning. We returned at 8:30 that same morning to deal with the last few items working until noon which is the end of the session. So much occurred in that last week that I will need to break this report into at least two parts.
Embryonic Stem Cell Research, SB 77
The final week witnessed the other great moral debate of this session. We began the session with the debate over the death penalty, and largely concluded with the debate over embryonic stem cell research.
There are honest and good people on both sides of both issues. I believe life begins at conception, and that the responsibility of government is to protect the weak and the vulnerable. SB77 would authorize embryonic stem cell research. This is different from adult or umbilical cord stem cell research which is currently legal, accepted as ethical by all, and has been actively pursed well over a decade. SB77 was presented to the House Judiciary Committee on which I sit, and we had a lengthy discussion about the bill. The sponsor of the bill was Senator John Ryan, a Republican. He authored it for very personal reasons. Senator Ryan and I had a private and candid conversation before his appearance in the Judiciary Committee. He knew I was opposed to his legislation. I have tremendous respect for Senator Ryan, but I believe he is wrong on this issue.
The bill passed through committee and proceeded to the floor of the House. Because a Senator cannot present a bill on the floor of the House, a Representative must perform that task during the floor debate. SB77 was presented to the House of Representatives by Al Park (D-26) who is the Chairman of the Judiciary Committee. The debate lasted a full three hours, and I took part in that debate. Since others eloquently put forward the moral and ethical concerns with SB77, I spent my time pointing out the problems in the way the bill was written. My intention was to try to convince any undecided representatives that the bill was flawed and should not pass into law. I do not know if I had any effect on the opinions of my colleagues, but the stem cell research bill was defeated by a vote of 38 to 30.
Private Meeting with Governor Richardson
Tuesday morning of the last week Representative Keith Gardner (R-66), the Whip for the Republican Party in the House, came up to me and said, “I need to see you in private.” My initial response was, “What have I done wrong?” Keith promptly assured me that I was not in trouble, but that he needed to share something with me. Governor Richardson wanted to have a private meeting with me, and that meeting would occur in Representative Gardner’s office which is right off the floor of the House of Representatives.
Governor Richardson asked to speak with me personally because he was preparing to make his decision on signing the death penalty repeal. He had heard about my speech on the floor of the House during our debate of the death penalty. The meeting between myself and Governor Richardson was a private meeting, and I will not share the details of what we said except that I expressed my sincere belief that the death penalty should be retained. I was extremely honored that Governor Richardson would seek me out for my opinion. He is a very prominent political figure who has played a major role on the national and international scene. He has been the dominant political figure in our State for well over a decade. I, on the other hand, am a freshman representative with the minority party. He did not have to ask for my input. Although I am disappointed with his decision, I am gratified that he sought me out and asked my opinion.
We are now home in Roswell. I will reflect on the session and post more thoughts later.
Monday, March 16, 2009
On Tuesday my House Memorial 78, Study Searchable Database of State Budgets, passed the House. This was originally a bill to require the State to make expenditure information available on line. I felt this was a government transparency issue that all legislatures would support, but fourteen (14) Democrats voted against my memorial.
Also on Tuesday I presented my “Ineffective Counsel” bill (HB 797) to the Consumer and Public Affairs Committee. If a criminal’s conviction is overturned because an appeals court has determined that the defense attorney did not do his job, the State has to let the criminal go free or re-try him. My bill would suspend the “ineffective” attorney from practicing law until he received more training and passed the bar exam (a test all attorneys must pass). Furthermore, the attorney, who didn’t do his job, would pay for the re-trial. Needless to say, defense attorneys did not like this bill and it was tabled.
Insensitivity to Crime Concerns
The number of bills that have been introduced that, in my opinion, weaken the ability of law enforcement and the criminal justice to protect the public has been astonishing. As a member of the Judiciary Committee, I have seen the constant stream of legislation to “help” criminals.
HB 285 Repeal the Death Penalty was introduced by Rep Gail Chasey (D-18), a retired educator and attorney. This was an intense debate in both the House and the Senate. I spoke extensively against this repeal in both committees and on the floor. It has passed the legislature and is on the Governor’s desk.
HB 396 Reliable Eyewitness Identification was introduced by Rep Joseph Cervantes (D-52), an attorney. This bill creates all kinds of new rules and regulations for police officers to follow. I won’t bore you with all of my objections, but let me note that when this was heard in Judiciary, the “expert witness” who sat with the bills sponsor was well known criminal defense attorney Michael Stout. I strongly spoke out against this in committee and on the floor. Unfortunately it passed the House by a vote of 34-31. All the Republicans voted against this bill.
HB 807 Jail Good Behavior Standards introduced by Rep Antonio “Moe” Maestas (D-16), an attorney. This bill strips the authority of Magistrate Judges to deny “Good Time” to individual convicted of misdemeanors. I publically opposed this in committee and on the floor. It was defeated on the floor of the House.
HB 866 Criminal Record Expungement Act by Rep Antonio “Moe” Maestas (D-16), an attorney. This would allow courts to conceal from the public certain convictions after specified time periods. It passed the Consumer and Public Affairs committee on a 3-2 vote and is currently in the House Judiciary committee.
I have been attempting to do live Web-casting during my committee hearings. This is also being done by Representative Janice Arnold-Jones and Representative Candy Spence Ezzell. I got some attention in a political blog by Heath Haussaman at http://haussamen.blogspot.com/ posted on March 10, 2009 at 12:36PM.
Unfortunately I have had a number of technical problems. This is an all volunteer effort with borrowed equipment. I am not comfortable with the quality of the web-casts. I really wish the Legislature would do this with a team of professionals. Sadly there seems to be people of influence who do not want the public to be able to see want is happening in committees
Sunday, March 8, 2009
I am sorry to report the death of two more family members of Legislators this week. Representative Ray Begaye (D-4) lost his mother and Representative Zachary Cook’s (R-56) father passed away. Please keep them and their families in your prayers.
The Film Industry Subsidy
On Tuesday evening I presented HB 725 which was a bill to repeal the Film Industry Production rebate. Currently Film Production companies get 25% of their qualifying expenses rebated to them by the state. This program will cost us an estimated $54 Million next year. We do not do this for any other industry.
Supporters claim that the state benefits from this program. I have studied various analyses of these issues and I am convinced this is a poor use of the taxpayer’s dollars.
I hope to be able to post these studies on line soon.
The hearing did not go favorably. The audience was packed with film industry people including leaders of their union. They all spoke about how they had personally profited from their employment in film production. I did not and do not dispute that they have prospered. The question is at what cost and who pays?
Immediately after the bill was tabled, at the suggestion of the committee, I met with representatives of the film industry. We talked for two hours. They were unwilling to compromise in any way. They would not yield on a cap, a reduction of the size of the rebate, or any sunset clause.
Here is a pretty good article about the committee hearing:
Some Additional Issues
As part of my inquiry into the film production rebates, I requested information about who has received these rebates: How much are they paid? How are their claims substantiated? The administration sent me a simple list with the names of 67 companies (many are duplicates) that have gotten your tax dollars but no details about how much they got, when they were paid, where they are located or what they did to deserve this money. I will continue to work at shining the light of day on this program. You have the right to know how your tax money is spent.
Finally it must be recognized that this is a very influential and powerful special interest group. They have the support of some of the most prominent politicians in this state. Based upon the reactions, I must have hit a nerve.
Transparency in Government
My bill to put the State’s budget on-line stalled in the House Appropriations Committee on Monday. The opposition was from the Information Technology Department which was concerned this would cost too much. At the suggestion of the Committee Chair, I went back and had my bill converted into a House Memorial. The Memorial calls for a study to be conducted on this concept and a report to an interim committee. The hope is to come back with a bill next session.
I went back to Appropriations on Friday and my Memorial was passed. It should come to the floor next week. I want to thank Representative Don Bratton (R- 62) and Representative Larry Larrañaga (R-27) for their assistance in getting this through Appropriations. I also appreciate the encouragement of the Chairman of Appropriations, Representative Henry “KiKi” Saavedra (D-10). They are all real gentlemen.
I have begun live Web-casting. I have started with the House Judiciary committee. You can watch at www.nmgov.tv Please understand I am trying to keep the link open, run the camera, and do my work as a committee member all at the same time, so it is a little rough.
Sunday, March 1, 2009
Domestic Partnership has hung over this legislature since before the session began. We have wrestled with many issues, the budget, the death penalty, ethics reform and others, but always hovering over this body has been the fundamental question of “What is the definition of marriage?” This single issue has produced the majority of e-mail, letters and phone calls. I firmly believe in Traditional Marriage and was prepared to fight for it. I did not have to defend the institution, as the battle was won in the Senate. On Thursday, February 26th the Senate voted against SB 12 by a vote of 25-17. I was fortunate to actually be present on the floor of the Senate when the vote occurred. Those Senators who stood strong to defend Traditional Marriage are all heroes.
State Worker’s Pay
On that same day, I am sorry to say, the House was not as noble. First the House passed HB 854 which takes 1.5 % of the gross pay of teachers, state policemen, and other state workers. The pay cut is diverted into the worker’s retirement, and the state’s contribution from the General Fund is reduced by the same amount. This is done to save the state $40 Million in FY2010. There has been NO other effort to reduce spending. I voted against this bill.
The Budget for FY2010
Also on Thursday, we voted on the state budget for FY2010. If I am not mistaken, it was the first straight line party vote of this session. The debate was long and serious. Rep. Don Bratton (R-62), one the most respected members of the House Appropriations Committee, spoke extensively against the bill. The FY 2010 budget cuts into our reserves in the amount of $136 Million. The projected price of oil and gas products is way too optimistic. Except for the 1.5% cut from the paychecks of state workers, there is no reduction in State spending. These and many other problems make this a flawed budget. I joined all of the other Republicans and voted against this budget.
Budget Transparency Bill
My HB 452 which puts the State’s “checkbook” on line, made it through the first committee, Health and Government Affairs, on Tuesday, February 24th. I had meetings with individuals representing the State Department of Finance, municipalities and counties who suggested some changes. I was pleased to be able to work with these folks and put forward a better bill. The next stop is House Appropriations. That is a tough committee, but I am hopeful.
A Questionable Bill
On Saturday, HB 864 “Voting System Budget Adjustment” was brought to the floor for debate and vote. This bill was sent to ONLY one committee and had the “Emergency Clause” which means if it passes the Legislature, and the Governor signs it, it goes into effect immediately. The Fiscal Impact Report (FIR) has this brief explanation:
The federal auditors reviewing Secretary of State spending of a Help America Vote Act federal grant has rejected $6.3 million spent on advertising with media consultant A. Gutierrez and Associates … A possible resolution to the audit finding is to make an accounting shift of the unaccepted expenditures… However, this shift requires the Legislature to expand and reauthorize the $11 million appropriation made in 2006…
The entire FIR is here: http://www.nmlegis.gov/Sessions/09%20Regular/firs/HB0864.pdf
The Attorney General is investigating this whole deal, but only AFTER the Feds said this money was misspent. Along with Reps Arnold-Jones and Larranaga, I asked a lot of questions during the debate. Many of us feel this is being done to protect the former Secretary of State. This is another example of the problems in this state that NONE of the proposed ethics legislation addresses. I hope the news media digs into this.
The bill passed, but without the “Emergency Clause,” so the soonest it could take effect is July 1, 2009.
Sunday, February 22, 2009
On Wednesday, February 18, the Legislature paused briefly so most Senators and House members could journey to Roswell for the memorial service for Patty Jennings, the late wife of Senate president Pro Tem Tim Jennings of Roswell. The service was one of the largest I have ever attended and a large contingency of elected officials, including the Governor and Lt. Governor were there as well. The Jennings family has contributed greatly to this State. Everything I have heard confirmed what a dedicated public servant Patty Jennings was in her own right. Please keep the Jennings family in your prayers.
The Budget Battle
As I said last time, the revenue figures are looking very grim. The years of growing state government by almost 10% a year have come back to haunt us. This last week there was a lot of intense behind-the-scene discussion. A budget for FY2010 is being crafted, but my Republican colleagues are not happy with what they see. The proposed budget fails to recognize that state revenue is declining; therefore, state spending must also decline. It appears the administration will use the federal stimulus package to prop up the reckless spending behavior of the past. In 2003, when the Richardson/Denish Administration took office, the total State budget was $3.9 Billion. This year it is almost $6 Billion. The longer we put off dealing with over-spending, the worse it gets. As I was told once, problems are not like fine wines…they do not get better with time.
This will come to full scale floor debate on Wednesday or Thursday of this week.
I have now submitted a total of seven bills. They are as follows:
HB 452 Budget Transparency Act
HB 648 Judicial Retirement from General Fund
HB 725 Repeal Film Production Tax Credit
HB 797 Ineffective Lawyer Penalties
HB 856 Controlled Substances in Newborn Babies
HB 857 Appeals from Magistrate to District Court
HB 858 Disbursements of Class Action Suit Funds
If you go online to http://www.nmlegis.gov/lcs/ and locate the box to the left, you will have a choice listed as "Legislation." Click on that, and go to "Bill Finder". You can then read any bill introduced by me or any other legislator.
The Film Production Tax Credit
There has been considerable media in the New Mexico media on HB 725, my effort to repeal the Film Production Tax Credit. This corporate welfare program cost New Mexico taxpayers $47 Million in FY2008. A study by the NMSU Office of Policy Analysis shows the "benefit" to taxpayers is about 15 cents on every dollar spent. Eliminating this program would save us $54 Million in FY2010. That is ten percent of the estimated budget shortfall. On Friday, I was interviewed about this by a reporter with the Santa Fe New Mexican. The article is here:
Keep in Touch!
It is important that I hear from you about legislation, both good and bad. Input from firefighters around our area equipped me to work with other legislators against a bad bill that would drain dollars out of the "Fire Protection Fund." We were outnumbered, but it is hoped that it will be stopped in the Appropriations Committee.
Local input is critical and needed in order for good legislation to pass and for bad legislation to be killed. Soplease feel free to express your opinion, I personally read every e-mail and letter from constituents. Remember, I'm here working for you!
Sunday, February 15, 2009
Last time I wrote that Rep. Gloria Vaughan’s (R-Otero) husband was very ill. Jim Vaughan passed away last weekend. They were married for 44 years. Rep. Vaughan has returned to the legislature and resumed her duties. The outpouring of sympathy and concern has been very inspiring. Rep. Vaughan and I share an office, and I have seen her moved to tears by the kindness shown her.
As most of you know the wife of Senator Tim Jennings (D-Chaves), Patty Jennings, passed away Saturday morning. I never met Patty Jennings, but I have heard many great things about her.
This is the third death of a legislator’s spouse this session. Rep. Mary Helen Garcia (D-Dona Anna) lost her husband just before the session started.
Carol and I ask that you join us in keeping these families in prayer.
The Death Penalty Debate
On Wednesday afternoon we had an extremely intense debate involving a number of legislators. I fully support the Death Penalty as an appropriate punishment. I spoke at length on this issue. I was surprised to discover my comments were the focus of an article in the Santa Fe New Mexican newspaper. The article is here (I would have preferred the word passionate instead of emotional):
The final vote was 40-28 in favor of Repeal (or Abolishment) of the Death Penalty and it was pretty much along party lines. I knew the numbers were against us from the beginning, but I gave it my best effort. I was honored to be told by a Representative who voted the other way that I had made “the decision harder.”
Friday, February 13th (note Friday the 13th), new budget projections came out for FY2010. FY2010 starts July 1, 2009 and runs to June 30, 2010. The numbers are not good. I got to sit down with Mr. David Abbey, Director of the Legislative Finance Committee and his Chief Economist, Mr. Norton Francis for a personal briefing on the situation.
The total revenue collected for FY2008 (July 1, 2007 – June 30, 2008) was $6.062 Billion (that’s with a “B”). In December 2008 it was estimated that the revenue for the current year (FY2009) would be less and the projection for FY2010 was $5.733 Billion. Now FY2010 is even lower. The new figure for FY2010 is down to $5.488 Billion, $574 Million less than we had in FY2008.
Over the past six years this administration has been constantly increasing spending. Now New Mexico will have around 10% less money than last year. The citizens will have to deal with some painful cuts because of this reckless spending. It now seems very likely we will have NO capital outlay in FY2010. We don’t know when we will get out of this, but we must tighten our belts.
On Wednesday I introduced HB 725 which would repeal the film industry tax rebate. Right now, an expenditure in New Mexico by a movie company qualifies for a 25% rebate from the State. In other words, if a movie outfit spends $100 in New Mexico, they get $25 from the taxpayers of this state. A study by NMSU economists concluded that the state gets a return of about 15 cents for each taxpayer dollar spent. Not a good investment.
No other business or industry gets treated like this. No restaurant, no tire store, no dairy, no farm, no retail outlet, no oil field service outfit, no one. In FY2008 this rebate cost New Mexico $47 Million. I was uncomfortable with this was last year when times were good. Now it is indefensible. We cannot ask New Mexico citizens to accept cut backs in services and at the same time give millions to Hollywood movie moguls.
Sunday, February 8, 2009
Monday and Tuesday the current class of Leadership Roswell was in Santa Fe. Leadership Roswell is a great program, and I strongly urge anyone living in the Roswell area to consider applying for next year’s class. On Tuesday afternoon I got to speak to Leadership Roswell about my journey about being a member of the class eight years earlier to being a member of the State Legislature today.
Thursday was Ruidoso Day in Santa Fe, and I got to visit with many friends from the Ruidoso area that evening. I did not get to spend much time with the folks from Ruidoso because of my committee schedule.
Friday morning we learned that Representative Gloria Vaughn’s husband was very ill, and she had been taken back home by the State Police Thursday night. Gloria and I share an office, and for those of you who do not know her, she is a very gracious and sweet lady. Please keep her and her family in your prayers.
AROUND THE ROUNDHOUSE
As many of you have heard, the Senate Judiciary Committee had a vote on SB12, the Domestic Partnership Bill. It was a tie vote with one Senator absent. This matter could still come up again, but I have been told that the House will not have hearings on HB 21 unless or until SB 12 passes the Senate.
While social issues rightly have much, if not all, of the attention of the media and concerned citizens, the budget quietly looms over everything. On Tuesday the Capital Outlay Subcommittees stopped meeting. A “Solvency Bill” was passed to (supposedly) deal with FY 2009 (the current year) problems. I believe (as do many others) that years of reckless spending have placed us in this position. Our current problem has been “fixed” by cutting out some Capital Outlay (pork) and now we move on to address FY 2010. That shortfall has been reported to be $464 million, however, we are all awaiting new revenue projections due out Friday, February 13th. The word around the Roundhouse is that it will be bad news with the FY2010 shortfall much larger and the “solvency bill” needing to redone.
HEALTH and GOVERNMENT AFFAIRS:
We meet on Tuesdays, Wednesdays, and Thursdays starting at 8AM. The Chairperson is Representative Mimi Stewart (D-21). I will not attempt to summarize the numerous bills over three days, but a few of them stick out.
On Tuesday we heard HB228 which deals with nurse advice lines for health insurance companies. All health insurance companies have toll-free numbers customers can call for health advice or information. These call centers are manned by nurses and different insurance companies have them in different places. Multi-state insurance companies will consolidate their call centers in one location. This bill would have required the call centers to be located in New Mexico. The problem is there is only one nurse help line currently functioning in the State of New Mexico. It is called NurseAdvice New Mexico. As a result of this bill, all insurance companies would have had to contract with NurseAdvice. Needless to say, this caused a lot of concern on my part and other individuals on the committee. It eliminates competition. This bill was tabled (I seconded the motion to table), and I expect it will not come back up again this session.
Another bill was HB296 which would increase the population threshold to require the establishment of a Metro Court from 200,000 to 350,000. This bill was presented because some individuals in Dona Ana County do not want the county to convert to the Metro Court arrangement currently in place in Albuquerque. This bill also was tabled.
Finally let me mention HB295 which established a commission to encourage relationships between the State of New Mexico and the Mexican State of Sonora. This commission would include the governor, several cabinet secretaries, and nine public members. While there are no salaries for the public members, there are per diem costs associated with this commission. I could not support this bill because there are only twelve miles of common border between New Mexico and Sonora, and there are no ports of entry directly connecting the two states. In these tight economic times, this just seemed frivolous. I was the only one in opposition.
This meets Monday, Wednesday, and Friday afternoons and is chaired by Representative Al Park (D-26). Representative Bill Rehm (R-31) presented HB28 which dealt with intimidation of criminal justice officials. Some of the Democrats on the committee were concerned about the scope of the bill, and Bill has been working with some committee members to get it resolved. I am hopeful that this bill will pass on Monday.
Most of the criminal justice bills have been fairly narrow in focus and not very controversial. On Wednesday, we had a joint meeting with the Senate Judiciary Committee that lasted about an hour and a half. The joint meeting was to hear a report from the Governor’s Commission on Prison Reform. This Commission had been meeting for over a year, and is comprised of twenty-one members. Much of the presentation was positive and informative, but I was concerned about the fact that the Commission was led by a former public defender, and had an additional public defender, a former inmate, and two prisoner advocates among its members. There were no victims’ advocates on this Commission.
Friday afternoon there were a number of bills presented in the Judiciary Committee. There was little controversy until we got to the one bill that we all knew would consume our energy and emotions.
Finally the Committee heard HB285 presented by Representative Gail Chasey which repeals the death penalty in the State of New Mexico. Currently the death penalty can only be sought in one of seven situations: if the victim is a police officer, a corrections officer, a prisoner, or a witness to a crime, or if the murder occurs in connection with a rape or kidnapping, or during an escape attempt. Also if it is a “murder for hire,” the death penalty is allowed. The committee room was the fullest I have ever seen it so far. The audience was overwhelmingly in support of repealing the death penalty. There were only two individuals in support of continuing the death penalty, and they were both district attorneys that I have gotten to know recently.
I was the third representative to speak, and I consumed the majority of the afternoon asking questions from Representative Chasey and her witnesses. I truly do not know how long this exchange lasted, somewhere between one and two hours, but I could not and did not keep track of the time. It would be impossible for me and boring for you if I tried to recap the entire presentation.
We finally got out around six o’clock, and the bill passed the committee. The four Republicans present, Representatives Bandy, Cook, Rehm, and myself all voted against the bill. Representative Vaughn was excused to be with her husband, and we were joined by Democrat Representative Cervantes. Truthfully I felt exhausted Friday night as if I had been in a titanic conflict with unseen forces. This was a struggle of emotion and deeply held convictions. I doubt if any minds were changed, but I could not (and will not) shrink from these types of battles.
Saturday morning, I checked my “email@example.com email” and found the following, humbling, note:
Dear Representative Kintigh:
I want to express my admiration to you for the questions you asked at this afternoon's hearing on the bill to repeal the death penalty. It was obvious that you had devoted considerable thought and research to the issue.
You hold very different opinions on the death penalty than I. I very strongly believe that the taking of a life ~ by an individual or governmental agency ~ is morally wrong. None-the-less, I respect your presentation and the points you expressed.
Thank you for the dedication you have shown to your elected position.
Sunday, February 1, 2009
We have settled into a routine that will be probably relatively stable. I have been assigned to the judiciary committee and to the health and government affairs committee. The Judiciary Committee meets in the afternoon on Monday, Wednesday, and Fridays. The Health and Government Affairs Committee meets at 8AM on Tuesdays, Wednesdays and Thursdays. Both of these committees meet in Room 309 in the Round House. We have meetings of the House of Representatives everyday. At this point they begin around 10:30AM and they go through the lunch hour. This means my free times are Monday and Friday mornings, and Tuesday and Thursday afternoons.
My office is located in the Capitol North Building also referred to as the Annex. There is a covered walkway connecting the Annex with the Round House. My office is in Room 203I. I share an office with Representative Gloria Vaughn from Alamogordo. Our secretary is Whitney Hobson from Roswell. She’s part of the Hobson farming family. To call my office, the number is 505-986-4453. Anyone coming to Santa Fe is welcome to come visit.
This last week I introduced my first bill, House Bill 454, titled “An Act Relating to Public Access to Budget Information; Requiring Creation of a Searchable Budget Database with Public Access; Enacting the Budget Transparency Act.” This is a companion bill to one introduced in the Senate by Senator Sander Rue who is a freshman senator from Albuquerque. Briefly, the purpose of the bill is to require the state government to put all expenditures of state money on line in a format which is searchable through the Internet. In other words, you would be able to find out if a certain individual or company has received any payments from the state and how much those payments were, and when they were paid. To see an example of this in action, go to the State of Missouri website, http://www.mapyourtaxes.mo.gov/. The State of Missouri did this a couple of years ago and numerous other states are following suit.
Over the years, New Mexico has had its reputation harmed because of the numerous scandals involving public officials. Recently we were the butt of a joke by a late night talk show host, David Letterman. I believe, as does Senator Rue and many others, that the way to turn our reputation around is to bring transparency to state government. The bright light of day needs to shine into every corner of our state’s financial transactions. I believe this will go a long way towards accomplishing that objective.