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Auditors: Hobbs officials fail to follow ethics ordinance

SANTA FE, N.M. — An investigation by state auditors has found that some elected officials in the southeastern New Mexico city of Hobbs did not adhere to their own code of ethics.

The Office of the State Auditor released the findings of its investigation Wednesday. The inquiry was spurred by concerns raised after the office had sent a letter to the city last October that highlighted opportunities for improving governance related to its procurement practices.

“This was a failure of multiple elected officials to follow their own ethics ordinance,” State Auditor Tim Keller said in a statement. “These rules help ensure decisions are being made in the best interests of the public, not to advance personal interests.”

Keller said the city should take action to restore taxpayers’ confidence. His office suggested training with respect to procurement practices and compliance with disclosure requirements.

The city said in a statement Wednesday that it has cooperated with the auditor’s office and is working to implement policy changes to ensure the confidence of citizens and the state agency.

The city also said it self-reported the majority of the issues outlined by the auditor’s office.

The investigation found that public officials weren’t filing required financial disclosures or recusing themselves from official business when personal interests were involved.

The rules call for officials to file annual disclosures that include a listing of business interests. The city has no records of any disclosures for the last several years.

Auditors also say the city violated its procurement code by purchasing more than $40,000 of goods and services from vendors owned by two city commissioners.

The city says once it became aware of the concerns, those vendor files were deactivated.

In one case, investigators said a family business in which Mayor Sam Cobb has a stake holds a home loan for City Manager J.J. Murphy. They said the mayor participated in employment matters involving Murphy while also serving as the vice president and board member of the business holding the loan.

Nothing in the commission’s meeting minutes related to the discussion and approval of Murphy’s compensation or other terms of employment indicated that the mayor disclosed the business interest with Murphy, according to the investigation.

The city’s response did not directly address the situation with Cobb. However, it did note that a corrective action plan was submitted to the state to improve transparency and accountability for government spending.

Officials say proposed changes to the procurement policy include a requirement that all elected officials and employees disclose financial interests as it directly relates to the city of Hobbs. The annual disclosures would be reviewed by the city manager as well as finance and legal staff to determine if any conflicts exist.