A search warrant affidavit prepared by the Attorney General’s Office and made public Wednesday details an investigation into “the alleged nefarious receipt of millions of dollars of public funds over a decade-long period by individuals, including at least one high-ranking elected official.”
The high-ranking official named in that affidavit is Rep. Sheryl Williams Stapleton, the second most powerful member of the state House of Representatives.
Investigators from the Attorney General’s Office served search warrants on Stapleton’s home and her employer, the Albuquerque Public Schools, on Wednesday as part of a sweeping investigation into Stapleton’s financial relationship and possible kickback scheme with a district vendor that has been paid more than $5 million over more than a decade.
The search warrant affidavit says the AG’s Office is conducting a “criminal investigation of racketeering, money laundering, receiving illegal kickback, and violations of the Governmental Conduct Act.”
News of the investigation sent shock waves through New Mexico on Wednesday, catching lawmakers and state leaders by surprise. Stapleton, a Democrat, is House majority leader and a longtime employee of APS, where she is coordinator and director of Career and Technical Education. The school district placed her on leave Wednesday pending the AG’s investigation.
According to the search warrant affidavit, investigators have found bank records showing that businesses and charities Stapleton either owns or has an interest in received more than $950,000 from Washington, D.C.-based Robotics Management Learning Systems LLC dating back to 2012. The money was in the form of payments to her family’s restaurant, A Taste of the Caribbean; a consulting firm, S. Williams Associates; and two charities that listed the president of Robotics, Joseph F. Johnson, as president and Stapleton as secretary and treasurer.
Robotics submitted invoices to APS totaling $5.3 million from 2006 through June 23, 2021, operating for most of that time under a sole-source contract. APS stopped business with Robotics on May 26, 2021.
No charges have been filed in the case.
“While we cannot comment on the specifics of an ongoing investigation, I can assure New Mexicans that because this matter involves schools and public funds, we will be swift and diligent in concluding this investigation,” Attorney General Hector Balderas said in a statement.
Agents showed up at Stapleton’s home with a warrant early Wednesday.
A woman who answered the phone at Stapleton’s residence later in the day said the longtime lawmaker was not available at the time.
Stapleton’s attorney, Ahmad Assed, said Wednesday evening that it was too early in the investigation to comment.
“We have to do our due diligence and our own investigation,” Assed said. “Rep. Stapleton will have a comment when it is appropriate. That could be soon or later in the process.”
Raúl Burciaga, director of the Legislative Council Service at the Capitol, said he had received a search warrant concerning the Stapleton investigation. But he referred all other questions to the Attorney General’s Office.
APS sought probe
The investigation was launched at the request of APS Superintendent Scott Elder, who sent Balderas a letter on April 19 outlining concerns the district’s procurement division had with the company and its close relationship with Stapleton. He said there were suspected violations of both the Procurement Code and Governmental Conduct Act.
Documents indicate there were concerns Stapleton helped procure state and federal funds ultimately used to pay Robotics, then ran interference for the company when APS employees raised questions about it.
In 2017 and 2018, Johnson, Robotics’ president, provided APS with a conflict-of-interest form declaring there were no employees of APS who had a direct or indirect financial interest in the company nor did Robotics employ any APS employee or close relative of an APS employee.
Stapleton’s financial disclosure form filed with the secretary of state says that her only income is from her job at APS and that her husband is the manager of A Taste of the Caribbean restaurant.
The investigation expanded when investigators began looking at bank records from the company that showed payments to the business entities and charities connected to Stapleton.
Robotics Learning LLC has programs that provide students in technical education programs with quizzes and trains teachers in technical and vocational education. Elder in his letter to Balderas questioned both the frequency of the trainings and quality of the software.
As coordinator and director of Career and Technical Education, Stapleton oversaw the program and handled invoices from Robotics.
While Robotics LLC had provided APS with documents that showed it was based in Washington, investigators found that many of the checks to the company went to an Albuquerque Post Office box and that it was never registered to do business in New Mexico.
When procurement officers began asking questions about the company, they found themselves dealing with Stapleton or her staff.
For years, Robotics had a sole source contract with the school district, in part because Stapleton told the procurement office that the company provided “unique tools” to monitor student progress, according to the documents reviewed by the Journal.
APS’ procurement division found that was not the case and that other companies offered similar programs. They finally put the contract out to bid in 2019, and Robotics was awarded the contract despite finishing second in the evaluations.
Two other companies, CyberQuest and TriTech Enterprises, also are tied into the investigation.
CyberQuest is the name of the computer software program owned by Robotics, but it also shows up as a separate company in some records.
TriTech Enterprises is a company that was offering teacher training in the use of the CyberQuest program.
According to documents, investigators were trying to find out whether the companies billed APS for the same services.
The investigation also is looking into whether Stapleton used her legislative office to direct appropriations to APS for the Robotics programs over the years.
Stapleton was elected representative in 1994, serves on the House Education Committee, among other committees, and was first elected majority floor leader in 2016.
According to the APS website, Stapleton’s salary in 2020 was $78,673.
Elder issued a letter to APS employees Wednesday saying Stapleton has been placed on administrative leave pending the investigation.
He told the employees that he couldn’t discuss specifics.
“What I can tell you is that the alleged scheme involved a long-time APS vendor and may have cost APS millions of dollars through a series of transactions over more than a decade,” Elder wrote.
He promised APS would treat Stapleton “fairly, honor her due process rights and make a final decision based on the available evidence.”
In addition to saying the district is cooperating with the criminal investigation, Elder said in the letter that APS is conducting its own internal review of procurement practices to strengthen oversight and detect and prevent fraud.
“Our previous system did not establish adequate controls over this employee,” Elder said in an apparent reference to Stapleton. “The internal processes failed to stop this fraud, ” he wrote. “For this, I apologize to you and the public. Most of all, I apologize to our students and their families. I am deeply sorry for the harm done as a result of this.”
Elder said the district is working “to prevent this from occurring again.”