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State Investment Officer Steve Moise spoke last week about turning around his blighted agency. Moise, you may recall, is the Dudley Do-right chosen to clean up the State Investment Office, which manages the state’s permanent funds.
I’ve heard Moise a couple of times now, along with Doug Brown, Moise’s counterpart at the State Treasurer’s Office a few years earlier. So I couldn’t help but wonder who we’ll be listening to a year from now describing the house cleaning at the New Mexico Finance Authority. And what new scandal will have erupted by then.
NMFA’s fake audit, which raised eyebrows on Wall Street, somehow slipped past a lot of people who should have been minding the state’s business. And now we’re seeing the first fallout in capital projects stalled around the state. Poor McKinley County can’t catch a break, it seems. First it lost 71 percent of its projects to the governor’s line-item vetoes, and now Gallup is watching two projects falter in the NMFA debacle.
Moise talks a lot about lessons learned, which have broad applications for organizations, including the bumbling NMFA.
“Franklin Jones always said you need to build systems,” Jones told a business group. “You need institutional continuity and institutional integrity, so the systems will continue to perform even if you’re not there. You need new policies, new processes, and the right people. How can you ensure ethical behavior? It all depends on the people in place.”
There you have ethical reform in a nutshell.
The late Franklin Jones, once the state’s tax czar, was a wise man. His point about processes and systems is well taken, but it still comes down to people, and there are two aspects of that. First, you want those solid, dependable people you would trust with your kids, your bank account, your life-and-death decisions.
Second is competence, which sometimes takes a back seat. Competence is key. One of Moise’s first moves was to have the State Personnel Office conduct an organizational analysis to make sure people were qualified for the jobs they held, and the result was a lot of staff changes.
When the shooting is over, we’ll probably see that Moise’s predecessor, Gary Bland, wasn’t necessarily corrupt, but he was under-qualified. People who are in over their heads are more vulnerable to manipulation.
Moise and the 11-member State Investment Council went to great pains in hiring a new chief financial officer. In a national search, Vince Smith was plucked from 130 applicants and is now spearheading what may be the largest portfolio restructuring going on in the country today to steer the funds away from the risk and volatility of the stock market and toward what Moise calls “a true institutional fund.”
Management 101: Hire good people and pay them what they’re worth. How does this work when we’re in budget-cutting mode? Ethics 101: Choose good people and back them up. Scrimp on salaries, weasel on support and we pay anyway for accountants and lawyers.
Systems are another form of support. Moise and the council have “new layers of checks and balances,” he said. That includes council committees, a staff code of ethics, and code of conduct.
Here’s a piece Moise didn’t mention – the top dog and his or her approachability. Moise was chosen because he didn’t have a fly on him, and I’ve known him long enough to say he’s very approachable. That means an employee can walk into his office and say, there’s something I’m not comfortable with.
The NMFA stories revolve around the former controller, but are we supposed to believe nobody else knew anything? Nobody spoke up? Why?
We need more than official indignation. We need a model of good government, ethical behavior, checks and balances replicated across agencies.