Sunday, October 03, 2010
Reform System Vs. 'Catch Bad Guy' Approach
By Deborah Baker
Journal Staff Writer
Perhaps the most startling example of public corruption in recent years in New Mexico occurred not in marble hallways but in a tiny, rural school system in the Jemez Mountains.
An employee managed to steal more than $3 million before being discovered — a crime that state Auditor Hector Balderas says is "a big red flag" about the casual way New Mexico oversees the spending of tax dollars at all levels.
Corruption that grabs headlines because it involves high-level politicians is "barely the tip of the iceberg," he contends.
Balderas, a Democrat, is making a case for stronger oversight at all levels of government as he runs for a second, four-year term as auditor.
His Republican opponent, Errol Chavez, is also focused on the issue of corruption as he makes his first run for statewide office.
A retired Drug Enforcement Administration special agent, whose supervisory career included running operations in Southern California and Arizona, Chavez brings a law enforcement perspective to the campaign.
He says his post-DEA stint as regional director of the New Mexico High Intensity Drug Trafficking Area — where he oversaw $11 million that went to federal, state and local agencies — also gave him auditing experience.
Chavez promises to use the investigative techniques he once employed against drug cartels to root out public corruption he says is rampant in New Mexico.
"No corrupt politician or state office will be ignored or disregarded," he said in a mission statement.
The State Auditor's Office is an unheralded — and Balderas would say underfunded — operation charged with making sure that more than 600 governmental entities get annual financial audits, most done by independent contractors but some by the Auditor's Office itself.
The office has 30 employees, seven of them in a special investigations division that works on allegations of waste, fraud and abuse — including hundreds of tips that have come in on a hot line Balderas established.
The office's annual budget is about $2.5 million — "ridiculously inadequate," according to the auditor.
In addition to overseeing the annual financial audits, the office can do special audits, such as the probe that unraveled the embezzlement by the Jemez Mountain School District's business manager and an ongoing review of transactions in the State Land Office.
Historically, some agencies have dragged their feet on annual audits without fear of consequences, or have ignored audit findings that point up problems in their systems.
Balderas has started publishing a scorecard, labeling agencies that haven't complied with the auditing law as being "at-risk" for waste, fraud or abuse, and subjecting them to monitoring by the special investigations division.
But the auditor has no authority to penalize government entities that are late in submitting audit reports — such as the 90 that initially appeared on last year's "at-risk" list.
The Legislature has authorized the Public Education Department to sanction schools that miss accounting deadlines; Balderas wants that law extended to all government agencies.
And he wants legislators to make it a crime to obstruct audits or mislead auditors.
Chavez agrees the state auditor should have more authority to enforce the audit requirement.
But he criticizes Balderas for complaining he doesn't have enough employees, saying properly trained and managed workers could get the job done.
"I don't think he has any managerial experience," said Chavez, who says his own numerous assignments over three decades with the DEA had him administering multimillion-dollar budgets and supervising hundreds of people.
Auditing the auditor
Chavez said that if he were elected, the first thing he would do is have the Auditor's Office audited, to make sure it is functioning properly.
And he would form a statewide task force of law enforcement agencies and prosecutors to investigate and arrest corrupt government officials and whoever conspired with them.
"In the state of New Mexico, a corrupt official does not act alone," Chavez said. "I can identify the players in the conspiracy."
He faults Balderas for not working more closely with agencies such as the attorney general and State Police. Balderas, a former prosecutor, says his office collaborates and coordinates with law enforcement but is careful to stay within its jurisdiction under the law.
Chavez, he said, is "misguided" in terms of the auditor's authority. The office is not legally empowered to do criminal investigations; that's reserved for law enforcement, according to Balderas.
Chavez also is publicly critical of Balderas for not looking into possible pay-to-play scandals involving investment deals made by the State Investment Council, which are being investigated by at least three other federal and state agencies.
Balderas replies that his office has been asked to review an SIC-related matter, and is preparing to do that.
Balderas frames the two candidates' differences as a "systemic reform argument vs. a 'catch-the-bad-guy' argument." Catching the bad guy isn't enough, the auditor says.
"We will never truly regain the confidence of the taxpayer until we have massive structural reform ... in the area of oversight and audit," he said.
Balderas says financial audits — which test the accuracy of financial statements — are not effective enough, and should be supplemented by special audits that review policies and procedures and determine whether agencies are complying with their own rules.
He says New Mexico should set aside a tiny fraction of the annual state budget to track the expenditure of all tax dollars, to catch mismanagement, mistakes or misconduct.
Chavez, 61, collected signatures to run for land commissioner earlier this year before being recruited by state GOP Chairman Harvey Yates Jr. for the auditor's spot.
Yates said Chavez's "extensive investigative and administrative experience uniquely qualify him" for the job.
Chavez retired in 2003 after 31 years with the DEA and its predecessor agency, the Bureau of Narcotics and Dangerous Drugs.
His assignments took him to at least a dozen cities, including Medellin, Colombia; Barcelona, Spain; and Mexico City. He participated in money laundering investigations and other overt and covert probes, he said.
Balderas, a 37-year-old lawyer, had a speedy ascent to statewide office. He returned from Albuquerque to his hometown of Wagon Mound to run for the Legislature in 1994 and knocked off the incumbent. Before his first House term was up, the Democratic Central Committee chose him in 1996 as a replacement for the party's nominee for auditor, who withdrew after allegations of sexual misconduct.
Recent campaign finance reports give Balderas a huge fundraising advantage over Chavez; his $140,000-plus in the bank was more than 10 times what the GOP challenger collected.
Chavez filed his most recent financial report two days late; he said he was busy giving a deposition for his pending divorce. He also was late with two earlier reports.
Candidates at a glance
Hector Balderas (incumbent)
EDUCATION: Law degree, University of New Mexico School of Law, 2001; bachelor's degree, political science, New Mexico Highlands University, 1998.
OCCUPATION: Lawyer; New Mexico state auditor, 2006-present; private law practice, special prosecutor for domestic violence cases, 4th Judicial District, 2003-06; assistant district attorney, Bernalillo County, 2002-2003.
FAMILY: Wife, Denise; three children.
POLITICAL/GOVERNMENT EXPERIENCE: New Mexico state auditor, 2006-present; member New Mexico House of Representatives, District 68, 2004-06; assistant district attorney, Bernalillo County, 2002-03; budget analyst, U.S. Department of Agriculture, 1998.
Errol J. Chavez
RESIDENCE: Las Cruces
EDUCATION: Diploma, National War College, 1991; bachelor's degree, University of New Mexico, 1971.
OCCUPATION: Retired; executive vice president, international affairs, LaserShield security company, 2006-2007; regional director, New Mexico High Intensity Drug Trafficking Area, 2004-2006; Drug Enforcement Administration (and predecessor Bureau of Narcotics and Dangerous Drugs) special agent, nine U.S. offices and three foreign countries, including associate special agent in charge of the Los Angeles Field Division and special agent in charge of the San Diego and Phoenix Field Divisions, 1972-2003; Bernalillo County Sheriff's Department, 1971.
FAMILY: Four children; five grandchildren.
POLITICAL/GOVERNMENT EXPERIENCE: Regional director, New Mexico High Intensity Drug Trafficking Area, 2004-2006; 31-year career with federal Drug Enforcement Administration and its predecessor, Bureau of Narcotics and Dangerous Drugs.