No Free Lawyers For Bland, Riordan

The lawsuits by the State Investment Council alleging the council was the victim of a pay-to-play scheme raised this question:

Would the state have to pay the legal defense bills for two of those it’s suing: former State Investment Officer Gary Bland and ex-securities broker Guy Riordan?

The question seems preposterous, but consider this: The state has paid about $290,000 to provide attorneys for Bland and Riordan in the so-called Foy lawsuits that make similar allegations of corruption.

New Mexico law says the state is required to provide a defense for any public employee accused of committing a civil wrong while acting within the scope of his or her duties.

The state is paying for an attorney for Bland in the Foy lawsuits because of his past government employment. Riordan is getting a defense, at least in part, because he once served on an investment advisory committee of the Educational Retirement Board.

But the administration of Gov. Susana Martinez told the Journal on Friday that the legal assistance for Bland and Riordan will stop there, that there will be no free attorneys in the lawsuits brought by the State Investment Council.

New Mexico law “was never intended to provide defense for state employees when the state itself pursues legal action against them,” Martinez spokesman Scott Darnell said in a written statement.

“As you know, the state believes Mr. Bland and Mr. Riordan owe New Mexico taxpayers a significant amount of money as a result of their involvement in pay-to-play schemes with state investment dollars.”

While the Foy lawsuits were brought on behalf of the state and in the name of the state, they were filed by a private individual, Frank Foy, former chief investment officer of the Educational Retirement Board.

The state Risk Management Division has paid more than $232,000 in legal bills for Bland in the Foy lawsuits, according to the division. Riordan’s bills have totaled more than $58,000.

The State Investment Council — represented by both a private law firm and the state Attorney General’s Office — filed lawsuits last week alleging council investment decisions were driven by personal and political considerations, rather than solely the best interests of the public.

The lawsuits allege campaign contributors to then-Gov. Bill Richardson and other political insiders wrongly pocketed tens of millions of dollars in fees on state investment deals.

The SIC filed one lawsuit in federal court against 16 defendants and one in state court against only Bland and Riordan, who both have denied wrongdoing. The lawsuits seek compensatory and punitive damages.

In a telephone interview Friday, Riordan said the administration’s decision not to provide a defense was unfortunate. “Sorry that politics is getting involved in this,” he said. Martinez is a Republican, Richardson a Democrat.

Riordan was a major Richardson campaign contributor, served on a Richardson committee that recommended Bland for the job of state investment officer and was a Richardson appointee to the state Game Commission.

Riordan also shared in more than $1.2 million in fees on investment deals made by the State Investment Council, according to SIC documents.

Following allegations by former state Treasurer Michael Montoya that Riordan had bribed him to get other government business, the U.S. Securities and Exchange Commission in 2009 banned Riordan from the securities industry for life and ordered him to pay nearly $2 million in penalties and interest. Riordan has denied those allegations.

Bland’s attorney couldn’t immediately be reached for comment on the administration’s decision on legal fees in the SIC lawsuits.

Bland was appointed by Richardson in 2003 as state investment officer and served in that job until resigning under pressure in the fall of 2009. As state investment officer, he helped manage the investment of billions of dollars from the state’s two large trust funds.

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 www.abqjournal.com/letters/new to submit a letter to the editor.

— This article appeared on page A1 of the Albuquerque Journal

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Cutline – BLAND: State has paid $232,000 in legal bills