Login for full access to ABQJournal.com



New Users: Subscribe here


Close

Public records law trumps secrecy in state settlements

........................................................................................................................................................................................

I reported last year on a settlement between the State Investment Council and a California investment firm in which both parties agreed to use their best efforts to keep the settlement confidential.

The SIC, chaired by Gov. Susana Martinez, later approved a policy saying the council “strongly disfavors” such confidentiality provisions in settlements.

Martinez, who has made government transparency a priority of her administration, said she would oppose any future settlement that required best efforts to keep it confidential.

The governor also suggested that the SIC, which had been rocked by a scandal over alleged pay-to-play in the previous administration, announce at its monthly meetings whether it had reached any more settlements.

All of that brings us to another government agency rocked by scandal and another settlement with a limited confidentiality provision agreed to by people who came in to clean up the mess.

My Journal colleague Dan Boyd reported Saturday that the New Mexico Finance Authority and the professional services firm of CliftonLarsonAllen had entered a settlement calling for the firm to pay the authority $300,000.

Like the settlement involving the State Investment Council, the agreement between the NMFA and CliftonLarsonAllen requires both parties to use their best efforts to keep the deal confidential – although nothing prevented the authority from disclosing it in response to a request under the state Inspection of Public Records Act.

Martinez appointees make up a majority of the members of the board that oversees NMFA.

“She’s consistently said that the best way for these sorts of settlements to be handled is for them to be announced publicly at the board meetings and for no extra lengths to be made to keep them confidential,” Martinez spokesman Enrique Knell said.

Boyd obtained the settlement from NMFA in response to a request under the Inspection of Public Records Act. I also used the law to obtain the $250,000 settlement between the SIC and Rustic Canyon/Fontis Partners of Pasadena, Calif.

The board members of the NMFA, who meet monthly, didn’t publicly announce the settlement with CliftonLarsonAllen. However, it was no secret that the NMFA was in talks with the firm.

At its monthly meeting May 23, the NMFA board met behind closed doors, then voted in public to give John Gasparich, the authority’s interim chief executive, the power to settle with CliftonLarsonAllen. The authority took that action under an agenda item titled “Consideration for Approval of Settlement Agreement with CliftonLarsonAllen.”

The settlement was signed May 31 by Gasparich and a partner of CliftonLarsonAllen.

NMFA, which helps arrange financing for public works projects, hired CliftonLarsonAllen to conduct the agency’s 2011 audit, but the firm didn’t complete it. Instead, Greg Campbell, then NMFA’s controller, forged the audit.

Campbell later pleaded guilty to forgery and securities fraud. The scandal also led to a management shake-up at the authority.

The settlement with CliftonLarsonAllen settles any potential claims by NMFA against the firm, which previously had repaid $67,000 it had received to conduct the audit. CliftonLarsonAllen didn’t admit any wrongdoing.

Gasparich, in an interview Monday, said board members were briefed on the settlement, but he declined to say whether that briefing took place before or after the agreement was signed. He said he didn’t recall whether board members were told of the confidentiality provision as part of the briefing or briefings.

Gasparich said he didn’t know the genesis of the provision, but he said it was one part of a settlement that was made to avoid the cost and risk of litigation.

He said he wasn’t aware of the previous controversy stemming from the confidentiality provision in the settlement involving the State Investment Council, and said he wasn’t aware of the governor’s views on such provisions.

The settlement between the State Investment Council and Rustic Canyon/Fontis Partners was a result of a scandal over millions of dollars in fees paid by investment firms to political insiders and others in exchange for SIC business. Rustic Canyon/Fontis Partners also didn’t admit any wrongdoing.

UpFront is a daily front-page news and opinion column. Comment directly to Thom Cole at tcole@abqjournal.com or 505-992-6280 in Santa Fe. Go to ABQjournal.com/letters/new to submit a letter to the editor.

 

Comments

Note: Readers can use their Facebook identity for online comments or can use Hotmail, Yahoo or AOL accounts via the "Comment using" pulldown menu. You may send a news tip or an anonymous comment directly to the reporter, click here.

Top
Read previous post:
Gallup man’s listeria death prompts lawsuit

GALLUP, N.M. — The family of a New Mexico man who died after eating listeria-contaminated cantaloupe is suing a produce......

Close