State officials launch probes into possible misuse of disaster relief funds by Mora County

SANTA FE — Amid growing concern about possible financial improprieties, State Auditor Joseph Maestas has ordered a special audit of a northern New Mexico county to pinpoint what happened to an estimated $2.7 million in unaccounted for public funds.

The planned audit comes as Mora County is managing roughly $40 million in state loans intended to jump-start recovery efforts after the 2022 Calf Canyon/Hermits Peak Fire, the largest wildfire in modern New Mexico history.

Maestas, a Democrat, said his office’s recent concerns stemmed largely from tips from a Mora County whistleblower. A state agency also asked both the Auditor’s Office and the New Mexico Department of Justice to investigate Mora County earlier this month.

Any misuse or mismanagement of the loan funds could jeopardize the state’s ability to secure reimbursement from the Federal Emergency Management Agency, Maestas said.

“As the state’s financial watchdog, I’m compelled to step in and really get to the bottom of this,” he said in a Tuesday interview, while also citing past delays and financial waste connected to the construction of a new Mora County Courthouse.

Maestas also said a 2023 special audit that Mora County officials requested was never completed after county officials balked at the last minute.

The current special audit was ordered by Maestas with “great sadness,” he said, as some area residents are still awaiting federal payments after losing their homes in the 2022 wildfire.

“My hope is this intervention and special audit designation will begin the process of restoring trust in Mora County,” Maestas told the Journal.

Missing funds could involve state loan dollars

Following the wildfire that began when two separate fires started by the U.S. Forest Service escaped containment and merged, New Mexico lawmakers in 2023 approved legislation authorizing up to $100 million in no-interest loans.

The money is intended to be used for road repairs, culvert restoration and fixing other damaged public property in San Miguel and Mora counties. Disaster relief and compensation for damages on private property are covered by a separate FEMA program.

Sen. Pete Campos, D-Las Vegas, a sponsor of the 2023 legislation, said Tuesday he was not familiar with the details of the special audit but expressed concern about its impact on the ongoing courthouse project and other county operations.

Meanwhile, a state Department of Finance and Administration spokesman said Tuesday the agency has not received “clarity” on Mora County’s finances, despite extensive efforts and numerous meetings.

The agency is tasked with doling out the natural disaster loan funds and formally requested an investigation on May 2 due to concern over alleged financial misconduct, DFA spokesman Henry Valdez said.

“The people of Mora County suffered a monumental loss as a result of the fires,” Valdez said in a statement. “Local leadership should act with urgency and integrity to ensure that available federal and state resources are used effectively to support recovery and rebuild the community.”

AG also investigating

Attorney General Raúl Torrez, New Mexico’s top prosecutor, also opened an investigation into the matter after being asked to do so.

In a May 6 letter, Torrez told state DFA Secretary Wayne Propst his office would conduct an independent investigation into allegations of governance and financial misconduct in Mora County.

Meanwhile, the special audit into the missing funds will be conducted at Mora County’s expense by an outside firm approved by the State Auditor’s Office, Maestas said.

He also said he planned to meet with county officials in the next week or so to discuss the audit’s scope and other issues.

While the work has not yet begun, the audit is expected to examine contracts between Mora County and vendors hired to do repair work, along with possible concerns about possible conflicts of interest involving county officials and contractors.

Mora County Interim Manager Richard Trujillo, who was hired earlier this month, said Tuesday he was willing to work with state officials to address their concerns.

“I truly believe in transparency and the residents of Mora County deserve that from my office and county officials and personnel,” Trujillo told the Journal.

He also said Mora County has not yet used any of the state loan funds it received, saying an initial road construction plan did not adequately address hydrologic issues in the burn scar.

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