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UPDATED: State Auditor Says PRC Chairman Fought Review

SANTA FE — State Auditor Hector Balderas said his office has withdrawn from an audit of a state utility regulator because the chairman of the Public Regulation Commission tried to obstruct the planned examination of the agency’s travel, vehicle and fuel expenses.

Public Regulation Commission Chairman Pat Lyons said Thursday he welcomed an independent audit but lacked confidence in the state Auditor’s Office to do the work because of his experiences when it reviewed operations of the State Land Office, which he ran until being elected to the regulatory agency.

The planned audit stems from allegations against regulation commission member Jerome Block Jr., a Democrat who is under investigation by the Attorney General’s Office after being accused of misusing a state-issued gasoline card. A legislative committee also is considering whether to recommend the impeachment of Block.

Lyons, a Republican, and other commissioners have called on Block to resign and have ousted him as the commission’s vice chairman.

“We want a better government. We want to be able to fix what’s broken. That’s why we are here,” Lyons said at a commission meeting at which members agreed to hire an outside firm to do the audit. Block was absent.

Balderas told the commission in a letter Wednesday it must hire an independent auditor to perform the work his agency had planned to do. The Auditor’s Office must approve the firm selected by the commission.

Balderas, a Democrat, said his staff met with Lyons and other regulatory agency officials this week, but Lyons “engaged in verbally abusive and physically threatening behavior which exhibited an explicit intent to intimidate” and obstruct Auditor’s Office staffers and “limit the scope of the special audit.”

Balderas said Lyons called auditors “a bunch of snakes” at one point in the meeting and “in an intimidating manner” slammed a box of documents onto a table in front Balderas’ chief of staff. Lyons, according to Balderas, referred to the audit as a “witch hunt” and “politically motivated.”

He said Lyons complained about a critical Land Office audit that was released last year. Lyons, a former Republican state senator, served as state land commissioner in 2003-2010.

At Thursday’s commission meeting, Lyons criticized Balderas, a former Democratic state legislator.

“I believe the auditor just wants to do this to further his political career,” Lyons said of the audit, noting that Balderas is running for the Democratic nomination for the U.S. Senate.

Lyons defended his actions, saying he had been “firm and adamant” with the auditor’s staff in asking them to allow the commission to hire an outside auditing firm.

Lyons objected that the Auditor’s Office had publicly released a copy of the letter Balderas sent to the regulatory agency. The letter outlined the scope of the planned audit. Lyons and regulation commission chief of staff Johnny Montoya said it was improper for the auditor to disclose the audit plans before the examination was completed.

“They had no business doing that. So they can’t be trusted,” said Lyons.

The five-member elective commission regulates utilities, telecommunications, motor carriers and insurance.

According to Balderas’ letter, the audit will look at transactions and expenses for travel, vehicles, gasoline and other reimbursements from Jan. 1, 2009 through Aug. 30 of this year. The audit also is to examine whether the agency had proper internal procedures and administrative controls over travel and other costs.

Balderas said Lyons stated that he directed regulatory commission staff to “withhold information about the potential misappropriation of state resources by Commissioner Block” and instead wanted the Attorney General’s Office to deal with the allegations against Block.

According to Balderas, regulatory agency documents show that Lyons directed his staff on June 17 to refer the Block allegations to the attorney general. The state Auditor’s Office wasn’t notified by the regulatory agency about the allegations until Aug. 2.

Balderas said his agency pulled out of the audit because Lyons’ personal bias could influence regulation commission staff and the chairman’s behavior could interfere with or restrict the work of auditors.

“It is unacceptable for an elected official to exercise uncooperative and retaliatory actions to obstruct and delay an audit due to resentment about a past audit he received in a different capacity,” wrote Balderas.

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Sept. 15, 2011 9:32 a.m. — State Auditor Withdraws From PRC Review

Barry Massey / The Associated Press

SANTA FE — State Auditor Hector Balderas said his office is withdrawing from an audit of a state utility regulator because the chairman of the Public Regulation Commission tried to obstruct the planned examination of the agency’s travel, vehicle and fuel expenses.

The audit was prompted by allegations against PRC member Jerome Block Jr., who is under investigation by the Attorney General’s Office for alleged misuse of a state-issued gasoline card. A legislative committee also is considering whether to recommend the impeachment of Block.

Balderas told the commission in a letter Wednesday it must hire an independent auditor to perform the work his agency had planned to do.

Balderas said his staff met with PRC chairman Pat Lyons and other PRC officials this week, but Lyons “engaged in verbally abusive and physically threatening behavior which exhibited an explicit intent to intimidate OSA staff, obstruct OSA’s audit work and limit the scope of the special audit.”

Lyons did not immediately return a telephone call to his office seeking comment today.

Balderas said Lyons called auditors “a bunch of snakes” at one point in the meeting and “in an intimidating manner” slammed a box of documents onto a table in front Balderas’ chief of staff. Lyons referred to the audit as a “witch hunt” and “politically motivated,” according to Balderas.

Lyons complained about a critical audit that was done when he ran the State Land Office, Balderas said. Lyons, a former Republican state senator, served as state land commissioner in 2003-2010.

The five-member elective commission regulates utilities, telecommunications, motor carriers and insurance.

Balderas said that Lyons “stated that he directed PRC staff to withhold information about the potential misappropriation of state resources by Commissioner Block” and instead wanted the Attorney General’s Office to deal with the allegations against Block, who is a Democrat.

According to Balderas, PRC documents show that Lyons directed PRC staff on June 17 to refer the Block allegations to the attorney general. However, the state auditor’s office wasn’t notified by the regulatory agency about the allegations until Aug. 2.

Balderas said his agency is pulling out of the audit because Lyons’ personal bias could influence PRC staff and the chairman’s behavior could interfere with or restrict the work of auditors. He said the PRC must hire and pay for an independent auditor to do a review of the agency’s expenses and internal management controls.

“It is unacceptable for an elected official to exercise uncooperative and retaliatory actions to obstruct and delay an audit due to resentment about a past audit he received in a different capacity,” wrote Balderas.

 

 

 

 

 

 

 

 

 

 

 

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