The International Business Times published an article today detailing allegations that Governor Susana Martinez used her office to help private companies who made big donations to her campaigns secure investment deals from state agencies in violation of federal Securities and Exchange Commission rules. REALLY BIG deals.
From the article:
Under Martinez, two state funds managing more than $33 billion have shifted more money into higher-risk investments — resulting in below-average returns, but generating at least $729 million worth of fees in just the last 4 years. Amid that shift, New Mexico committed at least $757 million to eight financial firms while donors linked to those firms have collectively given more than $1.2 million to Martinez and political groups supporting her.
At issue are monies that Wall Street firms made from investments made on behalf of the state for things like state pension funds and other places the state of New Mexico invests its money. The money earned by the firms, (firms known to have funded Martinez) is excessive by most standards, while the returns to the taxpayers of New Mexico haven’t been.
The article goes on to highlight that these investments are made by state agencies which Martinez has direct control over, either by directly overseeing such as the State Investment Council (SIC) or by making political appointments to like New Mexico Educational Retirement Board. Both of those agencies make decisions about which companies to trust with taxpayer money to help grow their balances. Which firms handle those decisions becomes political in the absence of transparent or ethical reforms which New Mexico lacks.
Oh, and it was Governor Martinez who vetoed those checks and balances back in 2011. Again, from the IBT article:
“During her governorship, Martinez has worked to preserve her power over state investment funds’ financial decisions — and to loosen restrictions on high-risk investments.
In the aftermath of the state’s previous pay-to-play scandals, Martinez in 2011 vetoed bipartisan legislation to remove her seat on the SIC. In 2016, while she was serving as the national chairwoman for the RGA, Martinez signed a Republican bill giving the SIC more latitude to invest state money in Wall Street’s alternative investment firms.”
While there are no comments from Martinez or her spokespeople, the article does have quotes prominent elected officials in New Mexico including State Auditor Tim Keller and State Representative Bill McCamley (HD33) on the need for more transparency in the state.
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This isn’t the first time Martinez has been in the spotlight for cronyism. Earlier this year, New Mexico Senators were shocked to find a bill they were being asked to consider passing would have given a $20 MILLION contract to a company that has donated money to Martinez directly in the past, as well as PAC’s that contribute to her campaigns.
This, along with a myriad of other factors have led Martinez to receive the dubious award of running the “worst run state in America” for the last two years running. ProgressNow New Mexico highlighted a report back in 2016 that called stated, “New Mexico’s economy is stagnant, largely because of the state’s reputation for corruption and crony capitalism and an environment that fosters pay to play behavior.”
Martinez’ run as gov has been marred pretty much since the beginning of her term, when it was discovered that the FBI was looking into shell companies that Martinez’ top advisor, Jay McCleskey, used to shuffle state funds for official purposes into campaign accounts.