Tuesday, April 18, 2006
Prosecutors Question Former Treasurer Montoya in Vigil Case
By Barry Massey/
Former state Treasurer Michael Montoya on Tuesday implicated a political ally of Gov. Bill Richardson in a widespread kickback scheme that began soon after Montoya took office in 1995.
Montoya's testimony came as federal prosecutors laid the foundation for a racketeering case against Robert Vigil, who succeeded Montoya as treasurer when he took office in 2003.
Montoya described for the jury how he demanded kickbacks from investment advisers who helped arrange bids on certain investments. He also expanded the scope of the kickback scheme from what it had previously been portrayed in documents filed in the months leading up to Vigil's trial.
Montoya told jurors about getting cash payments from security brokers and dealers who offered bids to the state for investments in government agency securities.
Montoya said Albuquerque securities broker Guy Riordan received "the lion's share'' of the treasurer's office business in government agency securities. In exchange, he said Riordan paid him an estimated $75,000 to $100,000 over five to six years. Montoya also said Riordan had contributed to his campaign.
A lawyer for Riordan, Tim Padilla, dismissed the allegations of kickbacks and called Montoya an "absolute liar.''
Padilla said Riordan has met with federal investigators and provided them with requested documents.
"There is not a problem,'' he said and suggested that if federal prosecutors "had something against Mr. Riordan they definitely would have brought an indictment. They don't have anything.''
According to Montoya, Riordan personally gave him the cash payments, often when they had lunch at restaurants. They would go into the restroom for the exchange and "in the stall he would give me money,'' the former treasurer said.
Other cash exchanges occurred in Montoya's car or Riordan's vehicle.
The alleged kickbacks between Montoya and Riordan ranging from $300 to as much as $2,500 for investment transactions took place before Richardson entered office in 2003. Montoya did not mention the governor during his testimony.
Riordan, who currently works for Wachovia Securities in Albuquerque, was appointed to the state Game Commission by Richardson. He contributed at least $24,000 to Richardson's campaign in 2002 and his re-election.
Riordan and Richardson have attended sporting events together, including boxing matches and a 2004 World Series game, the Albuquerque Journal reported last year.
Prosecutors contend Vigil also demanded kickbacks from investment advisers in return for business from the treasurer's office, which is responsible for investing and safeguarding more than $4 billion in state and local government money.
Vigil was deputy treasurer under Montoya from 1999 through 2001, then returned part-time in July to December 2002.
Vigil took kickbacks for his own campaign, so he could donate to other political campaigns and to help charities "so he could look like the big man, the leader, the patron,'' Assistant U.S. Attorney Jonathon Gerson told jurors in his opening statement Tuesday.
Vigil has pleaded not guilty to 28 counts of racketeering, extortion, racketeering conspiracy and money laundering in an alleged kickback scheme.
Montoya pleaded guilty in November to one count of extortion and is cooperating with prosecutors.
Gerson said the case "is about corruption at the very heart of our state government.''
But Vigil's attorney, Sam Bregman, portrayed his client as an innocent man of humble beginnings, and noted that most of Vigil's 17 brothers and sisters were present in the courtroom.
"They call him a patron. I guess that's because he is Hispanic,'' Bregman said.
Bregman said Vigil has committed no crime, and that the prosecution's case is built on testimony from con men and people who have pleaded guilty to felonies in exchange for reduced sentences.
The government has taken facts and events and "twisted them to fit their theory,'' he said.
Gerson said that for Montoya, the purpose of kickbacks was "always money, money, money.''
But power was Vigil's motive, he said.
Vigil sat expressionless throughout the opening statements by lawyers. He wore a dark gray, pinstripe suit and red, white and blue tie with stripes and stars similar to a U.S. flag. He also had a U.S. flag pin on his lapel.
The prosecution's first witness Tuesday was Tomasita Gallegos, chief of the investment and accounting bureau at the treasurer's office. She testified that Vigil, as deputy treasurer under his predecessor, was very active in making investments more so than any other deputy she had worked under during 21 years with the office.
Prosecutors walked Gallegos through a series of investment deals involving hundreds of millions in public money, in which investment adviser Kent Nelson received commissions for arranging bids from brokers. Winning brokers paid commissions to Nelson, who had been hired by the treasurer's office in 1999.
A month after his large commissions came under scrutiny from the state Board of Finance in October 2000, Nelson was fired.
Vigil signed the Nov. 14, 2000, letter firing Nelson. However, Nelson, of San Diego, continued to work as investment adviser to the treasurer's office and received more than $1 million in commissions for more than a half dozen transactions in 2001.
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