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Report: Denish Spent Federal Bucks on PR

By Sean Olson And Dan Boyd
Journal Staff Writer
       A report prepared for a libertarian-oriented think tank says Lt. Gov. Diane Denish used federal dollars during her first term to prepare Christmas cards, conduct a poll and pay for public relations staff, but Denish's office says it distorts her legitimate uses of the money.
    The report was posted Wednesday on the New Mexico Watchdog Web site, which is funded by the Albuquerque-based Rio Grande Foundation.
    The $225,000 in 2003-2004 federal stimulus money came from President George W. Bush's 2003 Jobs and Growth Tax Relief Reconciliation Act and was turned over to Denish's office by Gov. Bill Richardson when it remained unspent, the report says.
    The report's author, Albuquerque lawyer James Scarantino, wrote that the constitutional powers and duties of Denish's office are limited, apparently meaning they don't include spending federal money. Scarantino, who said he based his report on inspection of public records, couldn't be reached for comment Wednesday.
    Denish's office provided records to the Journal late Wednesday. The office also sent a statement from Denish chief of staff Joshua Rosen, saying, "The accusations made by this right-wing organization and advanced by Republican candidates for governor are reckless manipulations of the truth.
    "The fact is that the Office of the Lieutenant Governor used those funds to help small businesses create jobs and conduct research on early childhood education," Rosen said.
    "The office has found that, at times, an efficient way to support these ongoing policy efforts is to hire part-term help," Rosen said.
    Richardson's office did not respond to requests for comment.
    Scarantino, in one example of his report, said Denish's office used the federal money to pay a public relations employee on contract to work on 2004 Christmas cards.
    Another contract public relations worker took Christmas pictures and removed holiday decorations as part of her duties, Scarantino wrote.
    Denish provided documents showing that the Christmas card printing costs were paid for with funding from her political campaign fund, the Committee to Elect Diane Denish, not the federal stimulus money. However, the records do not appear to contradict Scarantino's finding that a Lieutenant Governor's Office employee was paid with federal money for part of 8 hours of work on the cards.
    Scarantino also said Denish "opinion polling" was paid for with the federal stimulus money, and the payment was not disputed by Denish's office. However, the poll appears to be a detailed, scientific tool for addressing children's issues in New Mexico, which has been one of Denish's central projects as lieutenant governor.
    The poll was conducted by Research and Polling Inc. of Albuquerque in 2003, and findings were compiled in a more than 100-page report to be used to create state policy. It was commissioned by the Children's Cabinet, created by Richardson and headed by Denish.
    The documents provided by Denish showed that the majority of the contract work in her office, paid for with the federal money, went for formal public relations work, such as writing speeches, arranging interviews and organizing public events.
    Denish is so far the only candidate for the Democratic nomination for governor in 2010. Republican candidates for governor were quick to cite the Scarantino report in news releases Wednesday, with some calling for formal investigations of Denish's handling of the federal money.
    Republican candidate Allen Weh held a news conference to call for a formal investigation to determine whether taxpayer money had been misspent.
    "At worst, we have some behavior that might result in some legal action," Weh said.
    Susana Martinez, another Republican candidate for governor, called the report "deeply disturbing" and pushed Denish to disclose how she spent the federal dollars.
    Earlier Wednesday, Denish unveiled several proposals for saving money in budget-strapped New Mexico, including overhauling the state's capital outlay process for funding statewide infrastructure projects and upgrading technology systems used by the state.
    Denish also called for the state to end the practice of "double dipping," which allows public-sector workers eligible for retirement to briefly step down, then return to a government job while simultaneously collecting pension benefits.
    Halting double dipping could save the state more than $7 million annually, Denish said Wednesday.

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