Delivery alert

There may be an issue with the delivery of your newspaper. This alert will expire at NaN. Click here for more info.

Recover password

SIC denies settlements were secret

SANTA FE – The New Mexico State Investment Council says deals it struck with four individuals named in an ongoing pay-to-play lawsuit were not “secret” settlements, partly because their terms have been available to the public for review.

The council also claimed in a recent court filing that the settlements did not violate the state’s open meetings laws.

The attorney for former state pension fund officer-turned whistle-blower Frank Foy has, in court filings of his own, challenged the legality of the settlements and urged a state district judge not to sign off on them.

Albuquerque attorney Victor Marshall, who represents Foy, also argued the SIC has not heeded concerns previously raised by District Judge Sarah Singleton about how the agency enters settlement agreements.

“While they can discuss litigation in a closed session, if they need to take action they have to do that in the open,” Marshall told the Journal.

The four settlements in question, approved in late 2012, were with so-called placement agents, or financial consultants, who allegedly helped broker politically influenced investment deals during the administration of former Gov. Bill Richardson. In the settlements, while not admitting wrongdoing, the individuals each agreed to pay the SIC dollar amounts ranging from $100,000 to $300,000 and promised to cooperate with the council’s ongoing legal efforts.

In its legal brief filed last week in the Santa Fe-based 1st District Court, the SIC described the settlements as part of a plan to recover larger amounts of money from other defendants and fund managers.

“We believe we’re doing the prudent thing in trying to recover this money for New Mexicans,” SIC spokesman Charles Wollmann said Monday.

An SIC litigation committee, meeting in private, unanimously agreed to the settlements in November and December 2012, according to the court filing. The settlements were recommended by the SIC’s attorneys.

The litigation committee was created by the SIC in June 2012 as part of a new settlement policy. Its members include two SIC members and Gov. Susana Martinez’s deputy chief of staff, Jessica Hernandez. Members meet in private to discuss legal matters and possible financial settlements, under the terms of the adopted policy.

“The fact that the litigation committee made the decision, rather than the council as a whole, does not violate the Open Meetings Act, because delegation of authority is permissible,” the SIC argued in its brief.

The state’s Open Meetings Act generally requires public meetings to be conducted in the open, though allowable exceptions to the law include litigation-related matters.

The SIC brief, filed Dec. 23, also said, “Even if a vote of the full council in open session were required to comply with the Open Meetings Act, there is no reason such a vote could not be taken to ratify the actions of the litigation and cure any defect.”

Meanwhile, the SIC’s settlement policy “strongly disfavors” confidentiality provisions in settlements and requires that all settlements be made available to the public upon request. However, it does not explicitly require public disclosure of such settlements.

Both Foy and the SIC have filed separate lawsuits in an attempt to recover money allegedly lost in politically influenced investment deals.

The settlements in question must be approved by a judge, so that the four individuals – who are all plaintiffs – can be dismissed from a lawsuit filed by the SIC against former State Investment Officer Gary Bland and others.

Foy, whose pay-to-play lawsuits have largely stalled in the state’s judicial system, has intervened in the case.

The individuals involved in the four settlements denied wrongdoing but agreed to pay money to the SIC as part of the agreements. The names and amounts are:

  • Daniel Weinstein – $100,000.
  • Vicky Schiff – $100,000.
  • Marvin Rosen – $300,000.
  • William Howell – $125,000.

The SIC already has entered several sizable settlements in its pay-to-play litigation, including a $24 million agreement with a Chicago financial firm.

The State Investment Council is represented in the ongoing litigation by Attorney General Gary King’s office and Day Pitney, an East Coast law firm.

A decision by Singleton on whether to accept the settlement agreements is expected to be made in the next several months.