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Editorial: Tax and Rev secretary’s resignation was overdue

The recent resignation of state Taxation and Revenue Department Secretary Demesia Padilla, which came a day after investigators with Attorney General Hector Balderas’ office armed with a search warrant raided the agency in search of tax documents connected with Padilla and her husband, Jessie Medina Jr., was long overdue.

Padilla had served as secretary since her appointment by Gov. Susana Martinez in December 2010.

In July 2015, state Auditor Tim Keller raised serious conflict of interest concerns when he released a letter that appeared to show Padilla asking her own agency to reduce a tax penalty for a company later identified as Harold’s Grading & Trucking. Padilla’s private accounting firm in Albuquerque handled the company’s financial affairs from December 2011 until February 2013 – when the trucking company discovered some unauthorized transactions, according to court documents.

In July, Keller’s office released results of a preliminary investigation that focused on whether Padilla pressured tax department employees to give preferential treatment to the trucking company. Keller’s findings were subsequently turned over to Balderas’ office for investigation.

The search warrant affidavit also alleged that Padilla failed to report as taxable income $25,360 the trucking company paid toward her credit card during the 14-month period her now-defunct company worked for it, nor did she disclose it on mandatory annual forms required of elected and appointed state officials.

These are seriously disturbing accusations, potentially involving tax evasion, embezzlement and other criminal acts. As head of Tax and Rev, Padilla was responsible for millions of taxpayers’ dollars. The accusations leveled against her – which she has claimed are simply partisan politics – at the very least create a strong appearance of a conflict of interest between her private company and her duties to collect all taxes owed to the state. And an equally strong appearance of failing to comply with disclosure requirements.

But Padilla has never been one to admit to conflicts.

When appointed head of Tax and Rev, she was a paid member of the state Gaming Control Board – despite a state law that prohibits salaried, full-time officials on that board from having any other jobs. By foregoing her $103,000-a-year salary at Gaming Control in favor of her $105,000-a-year salary at Tax and Rev, Padilla didn’t see a problem. Besides, she said, she did all of her Gaming Control duties on her own time.

The Martinez administration’s explanation at the time was that Padilla’s dual role was only temporary.

Unfortunately, New Mexico has a history of elected officials cashing in on their positions for personal gain, which makes it all the more important for state officials to fully investigate accusations of impropriety. And given her campaign against corruption by her predecessor when first elected to office, it is puzzling and disappointing that the governor does not appear to have looked too deeply into these issues when they first arose.

Should the accusations against Padilla have merit, she should be prosecuted to the full extent of the law.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.