Bernalillo County treasurer sues for legal bills, claims discrimination

Bernalillo County Treasurer Manny Ortiz says the county undermined him by not paying his legal bills during an investment dispute and recall attempt. (Roberto E. Rosales/Journal)

Bernalillo County Treasurer Manny Ortiz says the county undermined him by not paying his legal bills during an investment dispute and recall attempt. (Roberto E. Rosales/Journal)

Copyright © 2016 Albuquerque Journal

Bernalillo County Treasurer Manny Ortiz alleges the County Commission and others violated his rights and discriminated against him because he’s Hispanic – all as part of a conspiracy to force him out of office.

His allegations are part of a 28-page claim filed in state District Court against all five county commissioners and two former top executives at the county. At least two of the defendants, Commissioners Debbie O’Malley and Art De La Cruz, are Hispanic.

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The legal dispute started about two years ago when the county refused to pay for an attorney to represent Ortiz as he fought a legal petition to recall him from office.

Supporters of the petition won a court ruling that there was “substantial evidence or probable cause” to believe Ortiz had committed misfeasance or malfeasance in the management of county investments, but they never gathered enough signatures to actually force him into a recall election.

But that wasn’t the end of Ortiz’s legal troubles, according to court documents.

In late 2014, Chris Lucero Jr., the attorney who defended Ortiz against the recall, sued Ortiz and the county seeking to recover $27,000 in attorney fees and costs for representing Ortiz.

Ortiz, in turn, filed a claim against the county, alleging it was obligated to pay for Lucero’s work. It was the county’s “clear legal duty” to defend him in court, the treasurer contends.

But his cross-claim, filed last month, goes well beyond that: It alleges a conspiracy carried out by the County Commission and others to remove him from office, deprive him of legal representation and interfere with his legal authority over county investments.

Ortiz is asking the court to award him damages and rule that he isn’t responsible for paying Lucero.

The county, in its own filings, says the allegations leveled by Ortiz have “no factual or legal basis.” The recall petition was private litigation involving Ortiz, the county says, and the public has no obligation to pick up the tab for his defense.

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“Ortiz wants the same taxpayers that sought to have him removed from office to pay for his legal defense in the recall proceedings,” the county said in one court filing. His “position is both unreasonable and without merit.”

The legal fight comes as Ortiz seeks re-election as county treasurer. He has three opponents in the Democratic primary, and two Republicans are campaigning for the office, too.

Investment losses

The discrimination claim filed by Ortiz is the latest twist in the debate over whom to blame for $17 million lost when the county restructured its investment portfolio.

In 2013, Ortiz and his investment officer at the time, former Treasurer Patrick Padilla, faced intense criticism from Bernalillo County commissioners and top county executives over their investment strategy.

Too much of the county’s money was invested in long-term bonds, they said. That left too little money available to pay the daily bills and put the value of investments at risk, as interest rates rose.

In the end, the county sold investments at a $17 million loss to restructure the investment portfolio. The goal was to have cash on hand and avoid the possibility of even steeper losses.

State auditors, meanwhile, slammed Padilla’s investment decisions, and agents from the state Securities Division launched an investigation.

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The County Commission, at one point, unanimously adopted a vote of no confidence in Ortiz as the value of investments deteriorated. In his lawsuit, Ortiz says the commissioners “were setting up a lynching” at the special meeting for a no-confidence vote.

Ortiz also argues that the sale of the investment portfolio – resulting in losses – came over his objection and violated his legal authority over investments. His and Padilla’s work had helped earn the county tens of millions in investment income over the years, he said, and the county should have waited out the market longer rather than engage in a “fire sale.”

Ortiz argues the commission interfered with his rights, in part, because of “discriminatory animus” against both him and Padilla because they’re Hispanic.

Coincidentally, Ortiz and Padilla are now running against each other in the Democratic primary. The two worked together in the Treasurer’s Office for years – first when Padilla was treasurer and Ortiz was investment officer. They switched jobs after Ortiz won election in 2012. Padilla left the office at the end of 2013.

Ortiz and Padilla face two other Democrats: Christopher J. Sanchez, the accounting manager in the Treasurer’s Office, and Nancy Bearce, a neighborhood leader with a background in health-care management.

Who’s involved

In Ortiz’s cross-claim, the defendants are County Commissioners O’Malley, De La Cruz, Maggie Hart Stebbins, Lonnie Talbert and Wayne Johnson; former County Attorney Randy Autio; former County Manager Tom Zdunek; and David Chacon, a private attorney who worked under contract for the Treasurer’s Office and briefly represented Ortiz in the recall case.

Attorney Richard Valdez filed the cross-claim on Ortiz’s behalf.

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Defending the county against the claims is attorney Jonlyn Martinez.

The Journal wasn’t immediately able to reach Valdez on Monday.

De La Cruz, chairman of the County Commission, said Monday that he wasn’t aware of the claims filed by Ortiz. But he said “absolutely not” when asked whether the commission had conspired to try to remove Ortiz from office.

“But I’ll tell you, I would like to have that $17 million back,” he said.

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