Monday, May 18, 2009The Scandal Beat: Who, What, When, Where And Why? State Politics Engulfed; We're In-Depth And In-Touch On The Big Story![]() Placement agents are involved in scandals in other states and the suspicion of corruption has now headed west. We and others have urged the Governor to start the house-cleaning that is sorely needed in Santa Fe. That means dumping State Investment Officer Gary Bland. It also means ousting SIC members appointed by the Governor, including David Harris, now under investigation for his role in the CDR bond scandal. This corner believes any board replacements should include at least one Republican legislator and/or businessperson. And anyone who has given campaign money to the Governor, statewide candidates or has ties to Wall Street firms or the brokerage industry should not be appointed the new state investment officer or to the SIC board. ONE OLD-FASHIONED, PLEASE ![]() THE FUTURE IS THE PAST 2010 Dem Guv candidate and Light Guv Diane Denish is saying the next election is all about what's next, not the past. But is it? Not with constant news of financial wheeling and dealing that was the hallmark of the late, great bull market. Until we have systemic reform or the beginning of it, can we really start talking about the future? QUESTIONS, QUESTIONS Gary Bland ![]() Will Mr. Bland and the SIC tell us why so much business was tilted Mr. Correa's way? How often did Mr. Bland meet with Mr. Correra? Or with Mr. Correra's father, Anthony, a donor of Big Bill's? Where? When? Why? Did Marc Correra offer Mr. Bland any personal investment advice he acted upon? Does Mr. Bland have or did he have any financial interests with Mr. Correra, directly or indirectly? Maybe some of those questions were answered at last week's Legislative Finance Committee hearing, but we did not hear of it. Whatever the case, a federal grand jury seems a perfectly reasonable forum for these questions--and the answers--to be heard under oath and on the record. And a note to the journalism watchdogs. As Bill Maher would say: New Rule. If there is a grand jury probe and we learn of public figures granted immunity for whatever reason, we will report it as we have before. Timidity is not a disinfectant. Sunshine is. Journalistic pedants and blogging Hamlets are welcome to debate it. For us, it's back to the action...and the future. EVEN MORE QUESTIONS ![]() SOME CAN DO CANDIDATES? Will the 2010 candidates for State Auditor and State Treasurer voluntarily reject campaign contributions from major investment houses and placement agents that pose a potential conflict of interest? Will the candidates, including Treasurer James Lewis and Mr. Balderas, limit the amount of individual contributions they accept? How about the attorney general candidates? Treasurer Lewis and Land Commissioner Pat Lyons, by law, are both members of the SIC as is Department of Finance Secretary Katherine Miller. Are they satisfied that they and their staffs have adequately represented taxpayers? What reforms do they advocate, if any? What was the extent of their contact with any placement agents? What specific SIC and ERB staffers communicated with placement agents? How often? When? Where? Did staff have any personal financial relationships with the agents? Any interest in the investments they recommended? NO SPIN; JUST REALITY ![]() We have one lawsuit alleging campaign contributions to the Governor were the reason for certain ERB investments--$90 million in investments that went bad. The lawsuit has been ridiculed by some in the political classes as being politically motivated and half-baked. Maybe so, but with new revelations coming almost daily, everything is on the table. The federal grand jury might want to look at every single investment for the past eight years involving the use of placement agents by the state of New Mexico and determine if there is any cause for suspicion. SHOW US THE SUBPOENA ![]() "We are...determining whether that subpoena is releasable (to the public) under the state's inspection of Public Records Act." Oh, it's releasable all right. In fact, what time the folks in charge of billions of our dollars took their bathroom breaks is releasable. The Governor should urge the contents of that subpoena be released and the NM Foundation for Open Government should sue if the SIC stonewalls. And please, before we tear our hair out, will the spin doctors stop telling us what happened with these placement agents is "common industry practice?" The entire financial structure of the USA is under scrutiny. What has passed for common industry practice is not the desired standard, it's a cause for alarm and multiple investigations. What Mr. and Mrs. America want are new and better "common industry practices" that protect them and their life savings from the rapacity of the financial vultures largely responsible for the greatest financial bubble in our history and that set off a decline in living standards that has only just begun. WHAT WE'RE PROTECTING New Mexico has done a magnificent job in building up the Land Grant Permanent Fund and the Severance Tax Permanent Fund. The land fund dates to statehood and reaps fees the state charges for leasing 13.4 million acres of mineral resources and 8.8 million acres of surface land. The severance fund comes from royalties on natural resources like oil and natural gas. Those two permanent funds are currently valued at about $11 billion, and that is even after the 2008 stock market crash (The ERB fund totals over $6 billion). Many states sold off their public lands decades ago and have little or nothing to show for it. But the New Mexicans who came before us had the foresight to create a remarkable legacy for themselves and future generations. These funds today throw off income of over $400 million a year to fund public education and other programs. It's a huge portion of our annual state budget and is one of the great success stories in public investment in American history, and that's not hype. WHY IT REALLY MATTERS ![]() E-mail your news, comments, and summer refreshment suggestions. (c)NM POLITICS WITH JOE MONAHAN 2009 Not for reproduction without permission of the author |
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