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Wednesday, March 30, 2011
Prosecution Clear in Housing Case
By Thomas J. Cole
Journal Staff Writer
For the state Attorney General's Office, it's lose one, win one.
A week after being ordered to give up prosecution of one major government corruption case, the AG was cleared to proceed with another.
The state Supreme Court on Friday refused to get involved — at least for now — in the AG's prosecution of a former legislator, a prominent lawyer and two others in the Region III Housing Authority case.
You might recall the authority misspent money borrowed from the State Investment Council, sold homes to authority insiders and let an Albuquerque judge and a legislative aide in Santa Fe live rent-free in authority homes.
The defendants said the AG shouldn't be permitted to prosecute the case, in part because of the office's attorney-client relationship with the State Investment Council and several expected trial witnesses.
The argument was similar but not identical to the one made by former Secretary of State Rebecca Vigil-Giron and three others in their corruption case involving federal voter funds.
A state District Court judge on March 17 ruled the AG couldn't continue prosecution in that case because of a perception of a conflict of interest. Options for Attorney General Gary King include appealing or hiring a special prosecutor.
In the Region III Housing Authority case, two District Court judges sided with King last year. (The Region III case is being prosecuted in two criminal proceedings.)
The defendants filed applications for appeal with the state Appeals Court, but those were denied. They then asked the Supreme Court to review the denials, but the justices declined to do so.
"We join many New Mexicans who are glad that the procedural roadblock in front of prosecuting the Region III proceedings is finally removed," a King spokesman said. "We will continue to press forward and have these cases decided on the evidence by fair and impartial juries."
Charged are former state Rep. Vincent "Smiley" Gallegos, who headed the housing authority, well-known Albuquerque lawyer Robert Strumor, accountant Dennis Kennedy and a second lawyer, David Hernandez. They have pleaded not guilty.
The State Investment Council, which manages the state's two large trust funds, also has a lawsuit pending against Gallegos in a bid to try to recover some of the millions the SIC lost in buying Region III bonds.
In filings with the Supreme Court, attorneys for Gallegos and the others argued the AG's prosecution of the criminal case created an appearance of impropriety and partiality.
They said the AG provided legal counsel to the State Investment Council on the bonds bought from Region III and that it has an attorney-client relationship with the alleged crime victim (the SIC) and numerous witnesses.
They also said the AG shouldn't be allowed to serve as prosecutor in the criminal case when it is also representing the SIC in the related lawsuit.
"At the same time, the (AG) is ethically bound to advocate zealously on behalf of the SIC, the client to which it owes a duty of loyalty, it also is ethically and constitutionally bound to see that justice is done," lawyers wrote.
The AG countered that its work on the bonds wasn't significant, that the alleged crime victim is the state as a whole and not just the State Investment Council and that the SIC has private counsel in the civil matter.
"No claim or showing has been made of actual prosecutorial bias by the (AG) or any individual prosecutor," the AG argued.
It said granting the defendants' request that the AG be removed would lead to an absurd result: the AG being barred from handling the prosecution of anyone accused of defrauding a state agency.
The Supreme Court made no comment in deciding not to get involved at this time. The issue could end up back at the high court should a conviction occur.
The defense wasn't quite ready to throw in the towel on the issue and proceed to trial for Gallegos and the others.
Paul Kennedy, an attorney for Gallegos, said the defense — in light of the judge's ruling against the AG in the Vigil-Giron case — could now ask the judges in the Region III case to reconsider their rulings in favor of the AG.
There is one major difference in the Vigil-Giron and Region III cases: One of the defendants in the Vigil-Giron proceeding is actually a former employee in the AG's Office.
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.
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