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NMFA To Pay Two CEOs

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SANTA FE – The New Mexico Finance Authority now has two chief executive officers on its payroll while it deals with the fallout of a fake-audit scandal – but that might not last for long.

Board members of the troubled agency, which functions like a bank for local governments, voted unanimously Friday to pay interim CEO John Gasparich a salary of $12,500 per month, a figure that does not include provided benefits, retroactive to Aug. 20.

Gasparich, a former state budget director, has agreed to stay on the job though the 2013 legislative session, which ends in March.

The salary – equivalent to $150,000 yearly – matches the amount received by the agency’s most recent chief executive officer, Rick May. May was placed on indefinite paid administrative leave earlier this month by the NMFA board but has not been formally charged with any wrongdoing related to the audit scandal.

Finance Authority board Chairwoman Nann Winter said after Friday’s board meeting that the situation of two chief executives being paid simultaneously is a “short-term” arrangement.

“We definitely need to address that in the very near future,” Winter told the Journal.

A special NMFA board meeting has been tentatively set for Sept. 10, though it was unclear Friday whether May’s job status would be discussed then.

The Finance Authority, which was created by the Legislature in 1992, has an annual operating budget of about $128 million. Its payroll added up to slightly more than $2.7 million annually paid to 35 employees, as of earlier this month.

Since the fraudulent 2011 audit report was discovered, the Finance Authority has delayed loans to cities for public works projects and postponed a $40 million bond sale. Two national credit rating agencies have also placed the NMFA’s bond ratings under review for possible downgrade.

The authority’s recent troubles have also prompted state lawmakers to call for greater oversight of the agency and heightened qualifications for serving on the 11-member board. Those measures are expected to be considered during next year’s 60-day legislative session.

Meanwhile, the fact that no 2011 audit has been conducted has complicated the NMFA’s standing with other financial institutions. The agency is seeking an outside auditor to perform the task.

Board members voted Friday to approve an agreement with RBC Bank that is aimed at avoiding the possibility of the bank taking legal action against the NMFA.

Former NMFA Controller Greg Campbell has admitted submitting the fraudulent audit. Campbell and the NMFA’s chief operating officer, John Duff, were arrested this month and accused of “cooking the books” by misleading financial investors about the financial health of the authority.
— This article appeared on page C1 of the Albuquerque Journal

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