High court: Law firm in pay-to-play case can stay - Albuquerque Journal

High court: Law firm in pay-to-play case can stay

SANTA FE – The New Mexico Supreme Court on Friday rejected a request that it disqualify an East Coast law firm that’s been representing the state in litigation over politically influenced investment deals.

The unanimous decision is the latest legal setback for Frank Foy, a former state pension fund officer turned whistleblower who has been fighting the State Investment Council and the Attorney General’s Office over its handling of the pay-to-play lawsuits.

He had filed the petition with the Supreme Court earlier this week, arguing that the Day Pitney law firm had undisclosed conflicts of interest.

State Investment Council spokesman Charles Wollmann said Friday that the speedy denial of Foy’s petition by the state’s highest court “speaks for itself.”

But Foy’s attorney, Victor Marshall, described the decision as merely a temporary setback.

“It’s a procedural ruling; it’s not a ruling on the merits,” Marshall said. “I think ultimately the courts are going to deal with the problems at the SIC.”

The litigation over pay-to-play investment deals that occurred when former Gov. Bill Richardson was in office stretches back to 2009, and has been marked by court sparring between Foy’s attorney and attorneys with the SIC and the AG’s Office.

The AG’s Office is seeking to have two Fraud Against Taxpayers Act lawsuits filed by Foy dismissed, arguing that the state is better positioned to recover money lost in the pay-to-play investment deals.

But Marshall has opposed some of the state’s proposed settlements, describing them as “sweetheart deals.” Each side has also accused the other of having financial motivations in the case.

While some State Investment Council members have backed the investment body’s legal strategy, others have expressed concern. The petition filed this week included testimony from two SIC members – state Treasurer Tim Eichenberg and former state Sen. Tim Jennings – that claimed Day Pitney did not divulge the fact that it has clients that have been implicated in one of Foy’s lawsuits.

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