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Former state tax secretary pleads not guilty to corruption charges

SANTA FE – Former New Mexico Taxation and Revenue Department Secretary Demesia Padilla pleaded not guilty Thursday to charges that she embezzled money from a former client and abused her Cabinet post.

After the not-guilty plea was entered, a district judge in Santa Fe scheduled jury selection to begin in May for Padilla – the latest in a string of public officials to face public corruption allegations – with a trial likely to start shortly thereafter.

Padilla displayed little emotion during the arraignment hearing as she stood next to her attorney, Paul Kennedy, and other defendants facing unrelated criminal charges.

One of Gov. Susana Martinez's original Cabinet appointees, Padilla was charged in June by Attorney General Hector Balderas' office with embezzling more than $25,000 from a Bernalillo-based company, Harold's Grading & Trucking, and using her appointed position to push for favorable tax treatment.

After a weeklong preliminary hearing that featured testimony from several current and former tax agency employees, a Santa Fe Magistrate Court judge ruled earlier this month that there was enough evidence to move forward with most of the charges in the case.

Padilla could face up to 16 years in prison and as much as $20,000 in fines if convicted of all seven remaining charges she is facing. In addition to embezzlement, other charges against her include violating the ethical principles of public service and engaging in an official act for personal financial gain.

During Thursday's hearing, Assistant Attorney General Derek Skinner asked District Judge Mary Marlowe Sommer to remind Padilla not to speak with witnesses in the case.

He said he personally observed Padilla speaking with two witnesses during the preliminary hearing and said he had been told she also “mouthed” something to another individual who was testifying.

The judge did not immediately act on the request and allowed Padilla to remain free on her own recognizance. Her conditions of release include no alcohol, no contact with witnesses and no leaving the state without the court's permission.

The charges against Padilla were filed nearly three years after the Attorney General's Office received a referral about possible criminal activity on her part from then-state Auditor Tim Keller, who is now Albuquerque's mayor.

Padilla initially denied allegations that she pressured department employees to give preferential treatment to a former client of hers, telling the Journal in July 2015 that the allegations were just a “bump in the road.” But she abruptly resigned from her post in December 2016, shortly after state investigators raided the Taxation and Revenue Department's office in Santa Fe in search of tax documents connected to Padilla and her husband.

Meanwhile, the public corruption case against Padilla will play out after statewide voters this month overwhelmingly approved the creation of an independent ethics commission. New Mexico had been one of six states without such a commission.

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