New Mexico no stranger to scandal

Albert Fall (Library Of Congress)

Copyright © 2021 Albuquerque Journal

Corruption scandals are nothing new for New Mexico.

It is home to Albert B. Fall, the first U.S. Cabinet secretary to be charged and convicted of a felony in the infamous “Teapot Dome” scandal.

Fall was elected to the U.S. Senate from New Mexico in 1912 and served until his appointment as secretary of the interior in March 1921 by President Warren G. Harding. He resigned his Cabinet position in 1923 and returned to his ranch in the Tularosa Basin after questions were raised about no-bid oil leases he granted on Navy oil reserves at Teapot Dome in Wyoming and in California.

In 1924, a U.S. Senate investigation found that Fall had pushed for Interior to take over the Navy oil reserves, then granted leases on those reserves to two friends, oil company owners Harry F. Sinclair and Edward L. Doheny, without a public bidding process.

The Senate investigation concluded that Fall had accepted a bribe in the form of a loan and gifts to allow him to make improvements on his ranch.

A criminal case ensued and after numerous procedural delays, Fall was eventually found guilty in 1929 of bribery and conspiracy for receiving $385,000 from Doheny. Following his conviction, Fall was sentenced to prison for one year. Sinclair was fined and spent six months in jail for contempt of court. Doheny was acquitted.

After serving time in prison, Fall was financially ruined and lost his ranch. He and his wife lived in El Paso. Fall died there on Nov. 30, 1944, after a long illness.

Mislabeled invoice sparked Stapleton investigation

A look back at other scandals in NM history

Here are some of the more notable scandals over the last 40 years.

2021: Demesia Padilla, secretary of the Taxation and Revenue Department, was convicted by a Sandoval County jury of stealing $25,000 from a client of her accounting business while she served in the Cabinet of former Gov. Susana Martinez. She has requested a new trial. She faces up to 18 years in prison.

2018: State Sen. Phil Griego, D-San Juan, was sentenced to 18 months in state prison and fined $47,000 after he was convicted of five of eight charges relating to the sale of a state-owned building in Santa Fe and his failure to disclose his interest in the sale. The sale required legislative approval and Griego netted a $50,000 commission.

He resigned from the Senate in 2015 after questions about the sale were raised. He also pleaded guilty to embezzlement of campaign funds in a separate case.

2015: Dianna Duran, a Republican, resigned as secretary of state after she was charged with diverting money from her campaign to pay gambling debts at Native American casinos. She was ordered to pay $28,000 restitution to campaign contributors and served 30 days in jail.

2013: Las Cruces District Judge Michael Murphy pleaded guilty to a misdemeanor charge of violating the Governmental Conduct Act in exchange for prosecutors dropping four felony charges in a scandal that raised allegations of bribery. He received a 364-day suspended sentence.

2011: Public Regulation Commissioner Jerome Block Jr. pleaded guilty to a number of felonies involving identity and credit card theft and was sentenced to 60-day psychological evaluation.

2010: Th e business manager for the Jemez Mountain School District, Kathy Borrego, pleaded guilty to embezzling money from the school district for years. The State Auditor’s office said about $3.4 million had been embezzled to pay for Borrego’s gambling addiction. State police said she committed suicide just prior to being sentenced. Borrego faced up to 41 ½ years in prison and a fine of up to $54,000 for the crimes.

Bill Richardson
Gary Bland

2009: The State Investment Council was racked by a pay-to-play scandal that involved a close confidant of Gov. Bill Richardson, Anthony Correra, and his son, Marc Correra. Firms seeking investments from the SIC and Educational Retirement Board paid intermediaries like Marc Correra in order to get state investments. No one was ever charged with a crime in New Mexico in connection with the scandal, but the State Investment Officer Gary Bland resigned and the Legislature revamped the make-up of the SIC. Dozens of lawsuits resulted in the state recovering more than $30 million in fees, but investment losses were measured in the hundreds of millions of dollars.

2008: Former Senate President Pro Tem Manny Aragon, D-Albuquerque, pleaded guilty to one count of conspiracy and two counts of mail fraud in connection with receiving kickbacks in a scheme that defrauded the state of nearly $4.4 million in the construction of the Bernalillo County Metropolitan Courthouse for which he sponsored legislative appropriations. He served nearly 4 ½ years in federal prison and was fined $750,000 and ordered to pay $649,000 in restitution along with other defendants in the case. He was released from prison in 2013.

2008: Joe Ruiz, deputy state insurance superintendent, was convicted on 30 public corruption charges for demanding charitable contributions from insurance companies, leading to a four-year federal prison sentence, and was ordered to pay $102,000 in restitution. Ruiz claimed he was just following orders from former Insurance Superintendent Eric Serna, who had stepped down in 2006 to head off an investigation by the Public Corporation Commission.

2006: State Treasurer Robert Vigil was convicted by a federal jury of one count of attempted extortion out of a 24-count indictment. He and former state Treasurer Michael Montoya were charged with giving bond brokers business in exchange for gifts. Vigil served two years and two months in federal prison.

2005: Former State Treasurer Michael Montoya pleaded guilty to a federal charge of extortion and a state charge of racketeering for receiving lavish gifts in exchange for business with the treasurer’s office. He was sentenced to 18 months in prison and testified against his former political ally Robert Vigil.

1992: Then-State Rep. Ron Olguin, D-Albuquerque, was censured by the Legislature for solicitation of a bribe, but not expelled. He was later convicted of soliciting a $15,000 bribe in exchange for getting the Legislature to provide $100,000 for a crime counseling program. He was sentenced to 18 months in state prison.

1986: John Ramming, an aide to then-Gov. Toney Anaya, was convicted of 13 counts of bribery, fraud, conspiracy and racketeering for directing almost $3 million in state disaster relief funds to a friend. Anaya issued Ramming a pardon on 12 of the 13 counts and he served a year in prison.

1985: Phillip Troutman, state investment officer, and Ken Johnson, deputy state treasurer, were convicted of conspiracy to commit extortion when they demanded a New York bank make a political contribution to get state investments. They were sentenced to two years in federal prison and each was fined $5,000.

1982: Herman Grace, director of the Governor’s Office of Community Affairs, was sentenced to 4 ½ years in federal prison when he pleaded guilty to embezzling $13,000 intended for an anti-poverty agency.

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