Housing scandal awaits resolution as probe drags on

Posted 5/06/2008 03:18:00 PM

Days after he took office in January 2007, Attorney General Gary King told me, through a spokesman, that an investigation of the scandal that toppled most of the state’s affordable housing system in 2006 would be a top priority.

Sixteen months later, some are beginning to wonder.

It’s not that nothing has happened. The AG has successfully obtained court orders to boot three tenants from homes owned by the Albuquerque-based Region III Housing Authority because they didn’t qualify for affordable housing. Two were employees of the authority and one was a board member.

In addition, Bernalillo County Metro Court Judge Theresa Gomez was disciplined by the state Supreme Court because she lived, rent-free, for 20 months in a home owned by Region III while making a salary that probably should have disqualified her from receiving low-income housing. Meanwhile, she was dismissing traffic citations and cancelling an arrest warrant for then-Region III Director Vincent “Smiley” Gallegos.

And on Friday, the State Investment Council filed a lawsuit against Gallegos and Robert Strumor, a politically connected bond attorney who worked for Region III. The investment council is attempting to recover taxpayer money that was lost when Region III defaulted in 2006 on $5 million in bonds it owed the state. The lawsuit alleges that Strumor misrepresented to the state how Region III would spend the money. It accuses Gallegos of providing false information and misspending the money. You can read about that from the Albuquerque Journal.

That’s all nice, but the allegations surrounding Gallegos and others deserve a thorough criminal investigation, and we can only hope that’s what’s happening.

The AG’s criminal investigation began almost two years ago when the investment council asked then-AG Patricia Madrid to look into the situation. That came after the council released a report that found widespread misuse of the bond money, which was supposed to be spent on houses. Instead, almost $600,000 went to Gallegos as salary and benefits. Almost $700,000 was loaned to the Las Cruces-based Region VII authority, which did little to provide affordable housing and has since shut down.

Perhaps the most intriguing misuse of money revealed in the investment council report was a $300,000 loan the housing authority made to a private company owned by Gallegos under the guise of purchasing more than 30 lots in Las Cruces – lots that had already been purchased by the authority.

Gallegos repaid the loan, with interest, on July 31 of 2006, the day before he resigned.

The whistleblower who brought the problems to light, former Region VII board member Frances Williams, has urged prosecution, saying “millions of dollars have been stolen from funding intended for affordable housing because there has been no oversight, no structure and no ethics laws which could have avoided what we experienced with housing funding. … These bonds proved to be a piggy bank for unscrupulous individuals who plundered it at will, with no one looking over their shoulder.”

A complex investigation, sans documentation

There is a possible, simple explanation for why the investigation is taking so long: It’s complicated, and much of the documentation that might help prove wrongdoing doesn’t exist. The state Judicial Standards Commission ran into that problem last year when it was investigating Gomez.

Commission Director Jim Noel wrote in a filing with the high court that there was an “absence of substantial documentary evidence” to bolster his case against the judge. Lawrence Rael, who was brought in after Gallegos resigned to stabilize Region III, wrote in a sworn affidavit provided to the court in the case against Gomez that documents related to the judge’s dealings with the housing authority “were destroyed or were taken from the housing authority, along with records of other transactions, prior to my appointment. I have no evidence or information about who may have destroyed or taken these records.”

Destroying public records is a fourth-degree felony, but proving the destruction of public records is difficult when the records don’t exist. So is proving financial crimes.

There’s another possibility that has to be considered in our ethically challenged state when investigations drag on. Gallegos has been an ally of Speaker of the House Ben Lujan for some time. All we can do is hope there’s no political pressure on the AG to back off or, if there is, that King will do the right thing anyway.

There’s reason, based on the statements made during the commission’s investigation of Gomez, to believe the AG probe is taking so long because it’s complicated and there is a lack of documentation. The state auditor completed an inventory of the regional housing authorities’ assets last year and is conducting a full audit this year. The AG might be awaiting that report, which could aide his criminal investigation.

Still, some are understandably getting impatient. Senate Minority Whip Leonard Lee Rawson of Las Cruces wrote a letter to King on Monday requesting a status report. The only status report that will be provided, AG spokesman Phil Sisneros said, is that the investigation is ongoing, “but, as a matter of policy, we do not discuss ongoing investigations.”

So we wait.

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At 3:56 PM, May 06, 2008, Blogger Hemingway said...

The Attorney General has not done much in any of the outstanding investigations. It is sad for the state. He likes the high profile unimportant matters like his gas gouging campaign! No substance all style.

At 7:42 PM, May 06, 2008, Blogger J. Ramirez said...

How typical. King is too busy going after Republican Land Commissioner Pat Lyons. Obviously that is more important that anything fellow democrats are doing.

At 10:20 PM, May 06, 2008, Blogger David said...

Well said HEMMINGWAY...
A wise man once said,
"when it comes to style swim with the current, when it comes princpal stand like a rock."- Thomas Jefferson

The Attorney General seems to float just fine, but where does he stand?
A better question; where does he kneel?


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