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Wednesday, January 5, 2005
Paul Blanchard Followed Winding Road To Gambling Success
By Thomas J. Cole
Journal Investigative Reporter
Just five years or so into the gambling game, Paul Blanchard is part-owner of the Downs at Albuquerque racetrack and casino and the new Zia Park racino in Hobbs.
A contractor and developer, he's worth millions.
He's also a member of Gov. Bill Richardson's inner circle and a major campaign contributor. The governor appointed Blanchard to the state Board of Finance, where they sit next to one another.
Blanchard and Richardson have hunted together, gone to boxing matches and shared after-dinner cigars.
It's fair to say things have turned around for Paul Blanchard.
In the real-estate downturn of the late 1980s and early '90s, creditors and state and federal tax collectors dogged him, filing lawsuits and tax liens seeking hundreds of thousands of dollars.
Blanchard's journey from the IRS doghouse to the Roundhouse is a story, friends say, of a hard-charging deal-maker with a personality that many people warm to.
"To be successful in business or anything else, you have to sell yourself. He has a lot of confidence," says Jamie Koch, a University of New Mexico regent and Democratic fund-raiser who has known Blanchard for a decade.
Others find Blanchard's persona off-putting. One veteran lobbyist describes him as "obnoxious, pushy and loud."
Those who know the former UNM middle linebacker also use the word aggressive to describe him.
"He's a very driven guy," Koch says. "He's just a real hard-charging person, like a horse. He doesn't know anything but full speed."
Blanchard once got in a bar fight; once, he threatened another man over a construction bill. He says he was provoked both times.
But whether it's because he's a Richardson friend, a genuinely good guy or for other reasons, not many people who have known Blanchard in business or government had an unflattering word to say about him.
And no one was willing to say it on the record.
A step into the arena
For most of his adult life, Blanchard conducted his personal and business affairs largely out of the public eye.
He knew powerful politicians like ex-Sen. Manny Aragon, D-Albuquerque, and former Republican Gov. Gary Johnson but says he was busy with work and politics "had no attraction for me any way, shape or form."
He says he was apolitical. He made a couple of small campaign contributions to Sen. Pete Domenici, R-N.M., in the 1990s.
Blanchard took a step into the public arena in 1999 when he purchased an interest in Albuquerque Downs, a political machine of sorts that makes substantial contributions to politicians and lobbies the Legislature, Governor's Office and gaming regulators.
But the big step came when he decided to get involved with Richardson's campaign in 2002.
Blanchard spoke about his relationship with the governor over lunch last fall at a restaurant not far from the Capitol.
He says he was attracted to Richardson in part by his résumé former Energy secretary, one-time ambassador to the United Nations and former congressman.
"Us having Richardson was the best opportunity for this state to get somewhere, and it's proven out," he says. "It was like being able to have (Microsoft founder) Bill Gates to figure out all of our technology stuff or having (pro basketball star) Shaquille O'Neal be able to come in and play center for the Lobos. When are you ever going to get that opportunity?"
'Middle of the road'
Blanchard says he also was attracted to Richardson because he's "pretty much middle of the road" a pro-business Democrat, not a tax-and-spend liberal.
"I don't like the left. I don't like the right and I kind of like the middle," says Blanchard, whose listed party on his voter registration is DTS, or declined to state.
He says he had a campaign contribution check in hand when he first met Richardson in late 2001 or early 2002 at an arranged meeting at the office of Albuquerque lawyer Paul Bardacke, a former state attorney general and another Richardson pal.
Richardson spotted him at a distance in the hallway and gave him his shadow-boxing routine, a familiar sight to those who know Richardson.
Blanchard returned the gesture. It was love at first jab.
"It was one of those silly little deals that sort of make you feel comfortable," Blanchard says.
Richardson put Blanchard on his fund-raising committee. He later made him campaign finance chairman and a director of the governor's political action committee, Moving America Forward.
Blanchard and his wife donated $25,000 to Richardson and Albuquerque Downs kicked in another $100,500.
Blanchard also has made contributions in recent years to New York Sens. Hillary Clinton and Charles Schumer and Connecticut Sen. Joseph Lieberman, all Democrats.
After the election, Richardson named Blanchard to the transition team and appointed him to the state Board of Finance, which supervises government money matters, including cash deposits and securities.
Blanchard says Richardson's mandate to him as a Board of Finance member was simple: "Don't let the state be screwed."
All should prosper
In truth, Blanchard isn't just a Richardson friend; he's a best friend.
"They're like the best of buddies," says former Sen. Aragon, now president of New Mexico Highlands University in Las Vegas and himself a Blanchard friend.
Blanchard describes his personal relationship with Richardson this way: "It's fair to say we're pretty close."
Blanchard was part of the Richardson entourage at the De La Hoya-Hopkins boxing match in Las Vegas. He sat courtside with the governor at a women's pro basketball game in Albuquerque.
They have cut red meat together at Yanni's Mediterranean Bar & Grill in Albuquerque's Nob Hill neighborhood.
Blanchard traveled with Richardson to the opening of the Hobbs tracks and casino. He says they've also been horse riding, elk hunting and clay-pigeon shooting. They share a love for cigars.
"The guy's a man's man, no question about it," Blanchard says. "He's the real deal."
Blanchard says he and Richardson share the philosophy "that things should be fair" and that all should prosper.
Richardson was unavailable for an interview prior to publication deadlines for this series.
Winning the big ones
Blanchard has benefited from some actions of the governor and his administration.
Shortly after taking office in January 2003, the Fair Commission, made up of Richardson appointees, scrapped a plan to put the operation of the Albuquerque Downs out to competitive bid. The Downs is part of the fairgrounds and leased to Blanchard's group.
Later that same year, it was Richardson's hand-picked Racing Commission that gave the coveted licensing for the Hobbs track and casino to a partnership that included Blanchard.
The governor last year signed a law to take up to an estimated $1.5 million a year in tax revenues from the state's horse-racing tracks and give it to the state Fair Commission for improvements at the fairgrounds.
But Richardson vetoed language sought by Aragon and Blanchard that would have allowed the Fair Commission to enter into a lease for up to 25 years with the operator of the Downs.
Richardson also sided with horse owners and trainers in a dispute with the Downs last summer over the number of racing days scheduled for this year.
'I get screwed so much'
Blanchard says Richardson told him he vetoed the longtime lease language because Blanchard hadn't come to him to explain the proposal.
Blanchard says it doesn't make sense for his group to make significant improvements to the Downs without the guarantee of a long lease.
He says he told Richardson after the veto, "I wished I hadn't been a supporter. I wished I hadn't been a contributor." When the governor asked why, Blanchard says he told him, "'Cause I get screwed so much."
Blanchard says he also told a Richardson aide that he was "getting counseling at the rape crisis control center." He adds, "It's like all of these stories about people getting deals (from the administration). I'm waiting for one."
The Fair Commission has hired an architect and a gaming consultant to study whether it should build a new casino for the Downs, possibly at the corner of a busy intersection.
The current casino is cramped and inconvenient, limiting its ability to make money for Blanchard and his partners, as well as produce tax dollars for the state and purses for horse racing.
Also, the Downs is seeking nearly $271,000 from the Racing Commission to cover what it says are extra costs for rebuilding the $4 million-plus horse barn at the fairgrounds. The construction work was done by a Blanchard company.
Success, then trouble
Paul Emir Blanchard was born in Chicago in November 1949. His mother was born in San Salvador and raised in Nicaragua, he says. His father was from Oregon and served during World War II as a Navy pilot. The two met in Miami.
Blanchard's father died when he was 16 and his mother moved the family to Miami.
He attended a private high school in Coral Gables and the University of Miami.
Blanchard transferred to the University of New Mexico and played football for two seasons, in 1970 and '71. He was listed as a 6-foot, 218-pound middle linebacker.
He had a falling out with his coach and didn't play his senior year. He also didn't graduate, falling a few hours short of earning a degree.
"I was poor. I was very poor," Blanchard says. "I just didn't have the money to finish those last nine hours. So I went to work."
Teammate Houston Ross, now an Albuquerque attorney, says Blanchard moved into his linebacker position after Ross was injured in 1971.
"Paul was a good team player," Ross says. "He was quite a competitor."
Blanchard is a barrel-chested man and is active in Lobo athletics. His one-time football teammates include Rocky Long, now the UNM coach.
Blanchard Development & Construction applied for a state contractor's license in 1976. Blanchard has been a principal in several companies since, including Blanchard Construction.
Blanchard says he initially was successful, but the 1980s brought trouble as interest rates climbed and demand for real estate fell. He and/or his companies were sued numerous times for money due and breach of contract.
Blanchard is outwardly uncomfortable talking about those times but says, "The facts are the facts; the truth is the truth." He blames his troubles on the downturn in the real-estate market and his ignorance in investing money.
The federal government was among those who wanted a piece of Blanchard.
In addition to back taxes, it wanted the repayment of money loaned to Blanchard Development & Construction by a federally backed small-business investment corporation called Venture Capital.
The government sued in 1988 and later secured a judgment for more than $132,000 against Blanchard and his first wife and another $62,000 against Blanchard individually. The government eventually settled for $50,000.
Blanchard says Venture Capital actually loaned the money to a roof truss company, but that he had guaranteed the loan and was held liable when the company failed.
The shareholders in Venture Capital included Nick Kapnison, who was convicted in 1982 on federal felony charges after an investigation into loans made by First National Bank of Clovis. Kapnison was a bank director.
Today, Kapnison is owner of Yanni's restaurant, where Richardson and Blanchard have dined together. Kapnison, who was pardoned in 2001 by then-Gov. Johnson, also is a gubernatorial appointee.
Blanchard also had some other problems in the 1980s and early '90s.
In June 1989, a man filed assault, battery and other charges against him in state Metropolitan Court.
The man later told police that Blanchard "cold-cocked me from a blind side" at a restaurant.
Blanchard says he was dating the man's estranged wife and the two were in a bitter custody dispute. He says he hit the man, but only after the man threw beer on him and butted him with his head.
The charges against Blanchard were dismissed.
In another incident in 1992, a carpet store employee reported to police that Blanchard had threatened in a telephone conversation to beat him up.
Blanchard says he made the threat because he was owed hundreds of thousands of dollars for constructing the store and because the employee had verbally abused a woman in Blanchard's office.
No charges were ever filed in the case.
Blanchard says the two cases were isolated incidents and aren't a reflection of his character.
"I'm not a thug," he says.
The turnaround for Blanchard's fortunes got a major boost in 1992 when he teamed with O.D. McDonald, a real estate investor, to purchase the Mountain Run Shopping Center in Albuquerque. The Blanchard and McDonald partnership has since purchased other commercial properties.
McDonald says he doesn't want credit for Blanchard's success over the past decade or so. Blanchard says a banker who never lost faith in him also played a major role.
"He has worked diligently at it and I haven't hindered him," McDonald says. "I've helped in whatever area I could. I don't change people's lives. I sometimes participate."
McDonald joined with Blanchard in 1999 in purchasing shares in Albuquerque Downs.
Blanchard, in a document filed with the Racing Commission in 2003, reported nearly $26 million in assets and $8.6 million in debts. The largest chunk of his assets was in properties owned by his partnership with McDonald.
Blanchard, McDonald and two Louisiana men each own a 25 percent interest in the Downs.
Blanchard says a large part of his success has been due to McDonald.
He says McDonald brought a more stable financial background to their partnership and taught him the value of steady income over quick profit.
"He was a detail guy and I was a wild-horse rider," Blanchard says. "All the disciplined things I hadn't done, he had done."
McDonald says Blanchard has a knack for spotting business opportunities and the drive to pursue them.
"He didn't come from wealth," says Koch, the UNM regent. "What he's done he's done on his own."
The employees of Blanchard Construction include Patricia Mattioli, who resigned her education job with the Richardson administration last year after being arrested for cocaine possession along with W. John Brennan, then state chief district judge in Bernalillo County.
Blanchard says he and Mattioli are former neighbors and that he socialized with Mattioli and Brennan.
He says Mattioli called after her arrest and said she needed a job to support herself and her daughter.
"I took a chance with her. I tried to help," Blanchard says. "I guarantee I wouldn't be here if some people hadn't helped me. Life can be difficult at times and I'm a person that can testify to that."