Gov. Richardson Fights Case as New Mexico Senate Panel Investigates Investment Scandal

(January 25, 2010) — A former investment officer at New Mexico’s Education Retirement Board told lawmakers that Governor Bill Richardson’s administration is blocking efforts to recover hundreds of millions of dollars from failed public investments under the state’s whistleblower act. 

A New Mexico Senate panel is investigating the allegation, according to Bloomberg.  

Foy brought the lawsuit, alleging that political considerations in the governor’s administration unlawfully influenced investment decisions, reported the AP. Foy said Governor Bill Richardson’s political supporters received as much as $40 million in “kickbacks” that were disguised as third-party fees from money managers.

“The Richardson administration is fighting us every step of the way,” Foy told lawmakers, according to the AP. “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?”

Last week, the Senate Judiciary Committee agreed to request contracts from the State Investment Council, the Educational Retirement Board and the Risk Management Division for lawyers hired to defend state officials named in the lawsuit. In a suit that seeks to recover lost investments on behalf of taxpayers, lawmakers will assess the extent of the lawyers’ work to determine whether the state should be paying legal bills for public officials, the AP reported. 

In response, state officials defending the lawsuit have claimed Foy is merely a disgruntled former employee and that they have done no wrongdoing. 

The New Mexico probe is part of a nationwide investigation into public pensions.