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Krebs advised to replace cash, lawyer says

Copyright © 2018 Albuquerque Journal

Paul Krebs

The attorney for former University of New Mexico athletic director Paul Krebs confirmed this week that his client donated $25,000 to UNM after the Scotland golf junket controversy – but Gene Gallegos said Krebs did so only after a high-ranking university administrator told him a donation would resolve the situation.

The lawyer said Wednesday that David Harris, UNM’s executive vice president for administration, chief financial officer and chief operating officer, “encouraged” Krebs to get a $25,000 donation to match the public funds UNM used for private donor expenses on the now-infamous 2015 golf fundraising trip.

It is a claim Harris denies.

“Basically, David said if you can get a $25,000 donation, that will take care of everything,” Gallegos told the Journal.

Krebs ultimately decided it was easier to make the contribution himself, the lawyer added.

“I don’t think it was good judgment, but Paul, rather than trying to go out and beat the bushes for a donation, just thought, ‘Well, I’ll just be the donor.’ ”

“I have never advised Paul Krebs on any matters related to the Scotland trip, financial or otherwise,” Harris said in a statement provided through a UNM spokeswoman.

Scandal erupted over the foreign excursion when media began unearthing the financial details last year. In response, Krebs said in a May 2017 statement that an “anonymous” gift would cover what UNM paid for three private donors’ Scotland expenses.

UNM and the University of New Mexico Foundation have never publicly identified the $25,000 donor, despite numerous inquiries from media and investigators.

As recently as last month, Gallegos and Krebs did not respond to a Journal inquiry about whether Krebs made the donation.

Gallegos said he did not know why Krebs went to the trouble of keeping his donation anonymous.

In an effort to pinpoint the source, special agents from state Attorney General Hector Balderas’ office last month searched the UNM Foundation headquarters and determined that “a Paul Krebs” was the donor.

Balderas’ office is now investigating Krebs for possible money laundering, fraud and embezzlement, according to a recent search warrant affidavit filed to probe Krebs’ credit card records.

Gallegos disputes that there’s any basis for criminal charges.

“If you read the search warrant, it sounds like maybe Paul wasn’t the best employee, but it doesn’t have anything to do with crimes,” Gallegos said.

He said that Krebs would have turned over documents showing he made the donation if Balderas’ office had asked, but the AG’s Office has never contacted him or Krebs in the past 16 months.

Gallegos, who served as a UNM regent from 2009-14, provided the Journal with a letter dated June 15, 2017, that he said he sent Balderas announcing he was representing Krebs.

“Mr. Krebs and we as his counsel are prepared to and offer to provide complete cooperation with your inquiry,” the letter said. “Please let me know if there is any information or assistance you wish that we may be able to furnish.”

AG spokesman David Carl wrote in a statement: “While Paul Krebs may be willing to cooperate with our investigation, his initial failure to disclose the accurate source of the questionable payment has forced us to take appropriate law enforcement measures. When we are at an appropriate stage in our investigation to take a statement from Mr. Krebs, we will reach out to Mr. Gallegos. Mr. Gallegos and his client cannot dictate the manner in which we conduct our investigation.”

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