No summer fun for state Senate Democrats gathered in caucus at a Belen hotel Sunday afternoon where they mulled over the upcoming special legislative session and where, our insiders report, pessimism hung in the air over Big Bill's plans to give cash rebates to Mr. and Mrs. New Mexico based on an oil and gas surplus that is there one day and gone the next.

Our insiders report Big Bill stopped by the caucus where he was greeted cordially as he outlined the purpose of the special, including those rebates. "But as soon as he left, the senators began to worry over the budget projections. They will get an updated forecast from economists on Tuesday. No one seemed to expect the forecast to show the nearly $400 million surplus first projected." Said one of our sources.

If cash rebates are nixed because of the recent price plunge in oil and gas prices, then what will the special session set to begin Friday accomplish? "It appears the Senate could pass the Governor's health care proposal. It is rather modest now. That would give them reason for a short session, and avoid them coming in and simply adjourning. If there is a small surplus, maybe they use it for Medicaid expansion. That money is matched three to one by the federal government," analyzed our insider.

The Sunday caucus was treated to a financial analysis by the Legislative Finance Committee staff which informs that the original budget surplus was based on $134 a barrel oil and $11 natural gas per thousand cubic feet. With the markets plunging, those forecasts seem long ago and far away. And how do the Senators justify a rebate? By telling the public the prices will surely be back up to where they were? Who has that crystal ball? The last we looked there was no one named Houdini serving in the Legislature, but that's who Big Bill may have to emulate if New Mexicans' mailboxes are going to be stuffed with rebate checks.

KING READY TO SWING
Eli Lee Vs. AG King
Attorney General Gary King will "come out swinging" as soon as today, as the battle over politicking nonprofit groups heats up, reliable sources report. The AG, reports our insiders, will again ask that the secretary of state make nonprofit groups like the New Mexico Youth Organization (NMYO) and its parent group, Center for Civic Policy, comply with state campaign reporting rules. If the secretary doesn't, expect King to file a lawsuit to force the issue. Meanwhile, lawyers representing the nonprofits are warning King that they will sue the state if he persists in his bid to hold the groups feet to the fire.

Meanwhile, feeling the heat, political operative Eli Lee, who heads up the Center, revealed some of the funding sources for his controversial nonprofit. He told the ABQ Journal the McCune Foundation and the McKay Foundation--set up by heirs to the Taco Bell fortune--are two of the biggies. Our Alligators had pinpointed the Taco Bell money as one source of Lee's funding, but he shot down speculation that billionaire George Soros was a Center contributor. He said his budget for the next fiscal year will be a whopping $1 million. However, Lee refused to release the individual donors to his nonprofit. He indicated records of them should be available in a November IRS filing, but that's after the election. Also, Lee can only speak for nonprofits he controls. The problem of nonprofit disclosure remains and that's where King is headed.

King's attention on the political non-profits, who bill themselves as "progressive," was refocused Friday when a report surfaced that claimed an assistant attorney general had told a deputy secretary of state to "ignore" King's original request that the secretary classify the NMYO nonprofit as a political action committee, forcing them to more fully disclose their money sources.

"Despite some reports to the contrary, we fully support our earlier position in a letter that the Secretary of State's Office needs to tell the New Mexico Youth Organization (NMYO) to immediately comply with the law," King said.

Insiders say King was none too happy that he was made to look like he was dragging his feet and perhaps fearful of retaliation by the far-left wing of the Democratic Party. Democrat King is up for re-election in 2010. He has also been mentioned as a possible Dem Guv candidate.

WE DIG DEEPER

NMYO is under the umbrella of the Center for Civic Policy, the political nonprofit led by operatives Lee and Matt Brix. Our insiders say King's action will cover both entities. The group mailed out attack literature to help oust three incumbent Dem legislators in the June primary. The AG maintains the literature is obvious campaign material, not educational material as the nonprofits insist. The lit hit the mail boxes about sixty days before the election, keeping within the timeline that nonprofits are allowed to do mailers. But the attacks we've seen are nearly identical to election hit pieces, leaving little doubt that recipients are being urged to vote against the target in the lit. Many of the mailings deal with environmental, big business and ethics issues. We'll try to get some of them and post them here so you can be the judge.

Political nonprofits report their finances to the IRS, but requirements are less comprehensive and not as timely as the state requirements that King is demanding that they meet. Three legislators--Senators Robinson and Taylor and Rep. Silva--were defeated in their primary bids with the help of the nonprofits. They have filed suit to nullify the election results, a long shot play, but one that served to highlight the big "progressive" money coming into legislative races. Most of it, as we learned from Lee over the weekend, coming from out-of-state. Nonprofit hit pieces are now going out against more lawmakers including Senators Rawson, Snyder and Rainaldi.

PROGRESSIVE OR HYPOCRITICAL?

The nonprofits have also been active in promoting ethics legislation, opening themselves to a charge of hypocrisy. Ethics advocates ask if the nonprofits want to improve ethics why don't they fully disclose their finances and lead by example? One reason is that donations to the nonprofits are tax deductible. That gives them an advantage over other political groups. And, yes, donors get to make accusations against candidates under the cover of darkness. And it's not just progressives. What about right-wing interest groups using nonprofit status to hide from the public? One of them came recently with radio spots hitting Dem Tom Udall on gas prices.

King is warning that the nonprofit explosion threatens to take political financing underground and deprive the public of its right to know. The nonprofits retort that they are not engaging in overt political activity that violates their nonprofit status. Their critics want AG King, the IRS and/or the US Attorney to examine that claim. Some are pushing for the NM Legislature to take on the issue in next year's session. Legal beagles say if the lawmakers lawsuit seeking nullification of the election leads to testimony during a "discovery" process, funding sources for the nonprofits could be fully revealed.

If the nonprofits stick to their guns and the SOS does not force compliance with state regs, it looks like they and Attorney General King will get to tell it to a judge. With hundreds of thousands of unaccounted for dollars already pumped into our state's political process, and more coming as we speak, the time is ripe for a legal showdown.

FOLEY AND KING

Another hot potato on Attorney General King's platter is a matter involving outgoing State Rep. and House minority whip Dan Foley, Chaves County Commissioner Harold Hobson, as reported recently, is asking King to investigate the business ties between Allstate insurance, Rep. Foley and state insurance contracts. Foley is an insurance agent. The Hobson letter asking King if a contract Foley has should have been put up for competitive bidding raises some interesting questions. (Click the image to enlarge.)

YOU TUBING HEALTH CARE

Here;'s a little exclusive for you--an ad warning against government-run universal health care coverage. It was paid for by Farmington area GOP State Senator Bill Sharer. Not that Sharer has to worry much or buy TV time for his ad--Big Bill has scaled way back the health care reform measures he is asking the Legislature to approve when it meets in special session this Friday.



DEBATING DEBATES

Should Tom Udall agree to as many TV debates that are offered and put to an end the dreary debate over debates that has become a summer staple of the US Senate campaign? If he did, he would only be taking part in perhaps two more than the three TV face-offs he has already agreed to and deprive Steve Pearce of his soapbox. The southern NM congressman was hammering Udall again over the weekend, accusing Udall's camp of stalling in setting up the TV debates.

I urge him to have a meeting within the next seven days with our campaign and all of the electronic and print media to finalize a date certain for a series of debates to be televised in New Mexico.

KOAT-TV has proposed an October 26 debate. We await word from stations KOB, KRQE and public stations KNME in ABQ and KRWG in Las Cruces on whether they want to host debates. Also. NBC's Meet the Press has scheduled a Sunday morning national face-off between our two Senate hopefuls. NO date set yet. Udall says he wants only three statewide TV debates and he wants to count the MTP appearance as one of them. Pearce does not.

INSIDER ANALYSIS ON THIS
Udall
Why the reticence to debate in the first open US Senate seat since 1972? The usual and obvious reason--Udall is way ahead and doesn't want to help Pearce by giving him face time. The other reason, not mentioned much, is that Udall, like Pearce, is not noted for his oratorical skills and his handlers do not want to risk a mistake like the "brain freeze" Dem Patricia Madrid made in her 2006 congressional race against Heather Wilson and which probably cost her the race. Pearce is also unpracticed in the TV debate format, but lagging by double digits, he needs to take the risk.

The problem in recent years has been a lack of interest by the network affiliates in broadcasting debates. If not all of them offer time, Udall will get off the hook. But if KOB wants to have a debate, in addition to broadcasting the MTP appearance, and KRQE also makes time available, does the Udall camp turn them down KOB because it will mean going over its self-imposed limit of three debates? And what about public TV, is Udall going to turn them down?

The life of a US Senator revolves around debate--on the floor and in committee. While taking part in all the TV debates offered might give Pearce a slight advantage, Udall looks risking weak and fearful if he refuses a major network. The possibility of trapping the contender may even make the stations more prone now to offer debate time. It would make a pretty good story for them if he did refuse, and could explode into a major issue--jut what Udall wants to avoid.

Udall could simply agree to one NM hosted debate on each major station. It would quickly put an end to Pearce's jabbing, serve the interest of the electorate and, if he wins in November, it just might make Udall a better prepared United States senator.

STEVE'S HIPPIES

An enterprising Alligator revealed that the pic of those hippies Steve Pearce used for his full-page ABQ Journal ad hitting Tom Udall was taken from the cover of an album promoting 1960's rock. We posted it for some Friday fun. Now we go one better. We have the hippies promoting the album on a video!



Okay, we don't know for sure if they are the same hippies the GOP US Senate nominee used in his ad, but it's close enough. So come on all you love children--that means you Tom Udall and you Steve Terrell--let's get down with Steve's hippies. And Steve Pearce, we dig you, man. But don't bogart that joint, just dance.

This is it. The home of New Mexico politics. E-mail your news and comments, and stop by again soon.

(c)NM POLITICS WITH JOE MONAHAN 2008
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