Sunday, August 23, 2009
Money Trail Murky in Vigil-Giron Case
By Mike Gallagher And Colleen Heild
Copyright © 2009 Albuquerque Journal
Journal Investigative Reporters
Questions about how then-Secretary of State Rebecca Vigil-Giron spent millions of federal dollars on voter education commercials have been kicking around for several years.
But this week's state indictment raises as many questions as it answers about how the money was spent.
The sweeping indictment handed up by a grand jury Wednesday charges Vigil-Giron, 54, consultant Armando Gutierrez, 61, of Corpus Christi, Texas, and Rio Rancho lobbyists Elizabeth "Daisy" Kupfer, 47, and husband Joseph C. Kupfer, 46, with 50 counts of fraud, embezzlement, money laundering, conspiracy and 11 counts of money laundering over $100,000.
The charges stem from a series of contracts worth more than $6 million that Vigil-Giron negotiated with Gutierrez to produce commercials using federal money from the Help America Vote Act. Joseph Kupfer was a consultant to Gutierrez.
Defense attorneys last week promised to produce receipts and other documents to dispute prosecutors' claims that the voter education campaign from 2004-06 was the vehicle for a multimillion dollar fraud, embezzlement and money laundering scheme.
A major unanswered question is how Vigil-Giron, who appeared in some of the ads, allegedly benefited.
Her attorney, Robert Gorence, said he can show Vigil-Giron didn't receive "a nickel." She left office at the end of 2006.
Lynn Southard, a spokeswoman for the New Mexico Attorney General's Office, declined to comment on specifics.
"In order to ensure the rights of the defendants in the case, we will do our talking in court," she said.
But some of the back story to the indictment is detailed in a 36-page audit report released in May 2008 by the inspector general of the U.S. Election Assistance Commission.
The audit concluded Gutierrez's consulting firm received more than $6.2 million for the project, but Gutierrez couldn't produce receipts for about $3.6 million of the money he was paid.
Gutierrez's attorney, J. Miles Hanisee, said most of the money "went right out the door to pay for air time on television stations."
(Gutierrez is not the same Armando Gutierrez who heads a political consulting firm in south Florida, which had no involvement in the New Mexico matter).
Gutierrez, a nationally known Democratic media consultant, produced records for auditors documenting costs of $2.6 million for goods and services relating to the purchase of 44,588 TV or radio spots. Those records didn't show any costs for Gutierrez or his staff, the audit said.
Hanisee said forensic auditors are putting together records that will account for all the money.
During the federal audit investigation in 2007, Vigil-Giron and Gutierrez produced two documents to help show auditors how Gutierrez was supposed to be paid.
The documents raised red flags for federal auditors, who were looking into project expenditures at the request of Vigil-Giron's successor, current Secretary of State Mary Herrera.
According to the federal audit, the one-page statements were not signed by officials from the state Attorney General's Office nor any other state agency; they changed the method by which Gutierrez's firm would be paid; and they weren't in any official state file.
The grand jury indictment alleges the two documents were fabricated by the defendants as late as April 2007 to avoid prosecution and are the basis for the "tampering with evidence" charges.
The audit contended the state Attorney General's Office never reviewed the two documents.
Gorence and other defense attorneys dispute the audit's findings and say the documents were sent to other state agencies.
The ultimate signed contract, approved by the Attorney General's Office, does not say specifically how Gutierrez would be paid.
Defense attorneys plan on asking a judge to remove the Attorney General's Office from prosecuting the case.
Elizabeth Kupfer was administrative services director under former Attorney General Patricia Madrid during part of the period the alleged crimes were committed and was hired for a short time by Attorney General Gary King to work on budget issues for his office.
Gutierrez, according to his attorney, produced public service commercials for the Attorney General's Office similar to those he produced for Vigil-Giron. An AG spokesman said Friday that work occurred in the Madrid administration.
Further muddying the waters, defense attorneys said, is the fact that the contracts between Vigil-Giron and Gutierrez were approved by several assistant attorneys general who still work in the Attorney General's Office and are potential defense witnesses.
Joseph Kupfer's attorney, Jason Bowles, said he raised this issue with prosecutors prior to the indictments being returned.
"I think everyone is best served by a prosecutor who doesn't have actual or perceived conflicts of interest," Bowles said.
The four separate indictments charge the exact same crimes against all four defendants but provide no overview of how the defendants connect to each of the charges.
Gorence said defense attorneys will ask a judge to order prosecutors to spell out which crimes each defendant is responsible for and how they relate to each other.
Hanisee said the indictments are confusing.
• Vigil-Giron is charged with eight counts of tax fraud and 13 counts of evading taxes that involve Gutierrez's firm. There is no clarification in the indictment about what her involvement was in those charges.
• The Kupfers, who were subcontractors to Gutierrez, are charged with tampering with evidence in two counts involving backdated documents about payments to Gutierrez. The indictment doesn't explain how they were involved.
• Vigil-Giron is charged with both soliciting a kickback and paying a kickback, but the indictment doesn't say what she received or what she paid. Hanisee said the money laundering counts, which involve millions of dollars, were payments from the Secretary of State's Office to Gutierrez to produce the commercials and buy TV time to air them.
"There were 45,000 commercials aired in three languages to promote voter registration and participation," Hanisee said. "There were a lot of costs associated with producing those ads."
Hanisee said the payments to the Kupfers were for consulting work Joe Kupfer did on the commercials to make sure they complied with federal regulations.
Vigil-Giron, a 54-year-old Democrat, served 12 years as New Mexico secretary of state over a span of nearly two decades. She left the office at the end of 2006. An active supporter of Gov. Bill Richardson, she was hired in October as a constituent liaison for the state Department of Workforce Solutions' Labor Relations Division. She earns $61,518 a year. Previously, the administration had chosen Vigil-Giron to be executive director of the New Mexico Film Museum, but she turned down the position after a political uproar over her lack of qualifications. She has twice run unsuccessfully for U.S. Congress.
Gutierrez, of Corpus Christi, Texas, opened his own advertising/marketing agency in Albuquerque in 1990, specializing in political communications to Hispanics. He worked for the presidential campaigns of the Rev. Jesse Jackson in 1984 and 1988. He handled Latino advertising and marketing for the Clinton/Gore re-election campaign in 1996, and worked for the Democratic National Committee and the Gore/Leiberman campaign in 2000. His now-defunct Web site said he was the "agency of record" for many successful candidates in 2002, including Gov. Bill Richardson. He managed anti-smoking and scam alert programs for New Mexico Attorney General Patricia Madrid, and counted the Service Employees International Union and Ruidoso Downs among his clients.
Joseph And Elizabeth "Daisy" Kupfer
The Kupfers of Rio Rancho are listed as lobbyists on the Secretary of State's Web site. His clients have included Ruidoso Downs Racing and the New Mexico Financial Services Association. Both Kupfers are registered as lobbyists for the New Mexico School for the Visually Impaired. They worked as lobbyists for the city of Albuquerque from January 2005 until this June, when their city contract ended. Between January 2005 and June 2009, they were paid $164,000 by the city to lobby the Legislature on capital improvement projects. She worked for then-state Attorney General Patricia Madrid as director of the office's Administrative Services Division until Madrid's term expired in December 2004.