Former WNMU president moves to dismiss state's lawsuit

Western New Mexico University’s former president is asking a court to dismiss a lawsuit by the state Department of Justice targeting his lucrative severance package.

Attorney General Raúl Torrez challenged the severance agreement approved by WNMU regents on Dec. 20, which included a $1.9 million payment on top of a faculty appointment paying $200,000 annually with an eight-month sabbatical. The complaint alleges that the board of regents, most of whom subsequently resigned at Gov. Michelle Lujan Grisham’s request, negotiated the agreement in violation of New Mexico’s open meetings law. Torrez is asking a judge to void the contract and reclaim the money, arguing that Shepard and the regents breached their fiduciary duties in handling public funds. The complaint alleges that the contract is “unconscionable” under the law and also violates the New Mexico Constitution’s anti-donation clause.

Shepard retorted Wednesday with a motion to dismiss the suit, accusing the attorney general of overreach, calling the lawsuit “a transparent effort to substitute its own views about the best interests of Western New Mexico University … for those of the Board. While NMDOJ has many responsibilities, managing the University’s financial affairs is not one of them.”

The motion further argues that Shepard had no fiduciary responsibility in negotiating his severance, which followed his announcement in December that he would resign amid increasing scrutiny of lavish spending at the university, located in Silver City. The controversy has prompted inquiries from the Office of the State Auditor as well as the State Ethics Commission.

Shepard’s motion argues that he and the former regents negotiated lawfully.

“No amount of spin from Joseph Shepard’s crisis communications consultants or his high-priced legal team is going to deter the New Mexico Department of Justice from holding him accountable for abusing the public trust and misusing taxpayer money,” Torrez said in a written statement. “He may have convinced his pals on the Board of Regents at Western New Mexico University to hand him a golden parachute, but we intend to use every available resource to recover funds that should have gone towards supporting the teachers, staff and students at that institution. We look forward to responding to this filing and having our day in court.”

In a separate filing, former regents Mary Hotvedt, Daniel Lopez, Dal Mollenberg filed a response to Torrez’s complaint on Wednesday, along with student regent Trent Jones. Lujan Grisham asked the entire board, a body appointed by the governor, to step down Dec. 31 after the severance agreement prompted criticism and outrage. Jones subsequently rescinded his resignation, according to court documents.

The regents denied they or Shepard had breached their fiduciary responsibilities and argued the Department of Justice cannot challenge the validity of the contract since it is not a party to it and the regents have the authority to manage and govern the university. The former regents said they can no longer be sued in an official capacity nor be held personally liable.

A joint resolution seeking constitutional changes specifying university boards’ fiduciary duties and a legal path to remove regents passed its second legislative committee Wednesday. It moves next to the state House of Representatives for a vote.