Kicking the kickback habit

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By The Staff

New Mexico has a long history of battling political corruption, dating back to well before statehood.  

The Lincoln County War (1878-1881), which is usually recalled as the backdrop for the exploits of Billy the Kid, began as a political fight over the control of government contracts for beef and other provisions. Those government contracts were heavily influenced by the patronage of the powerful “Santa Fe Ring,” a group of lawyers, judges, businessmen and politicians from both parties who gained control of the territorial legislature and courts and dominated the economic life of New Mexico by manipulating public offices for private gain.

Unfortunately, this culture of corruption has continued into modern times. It can be seen in the troubling attitude that this is simply how business is done in the state. For example, in 1984 New Mexico State Investment Officer Phillip Troutman and Deputy State Treasurer Ken Johnson were convicted of conspiracy to commit extortion. According to the sworn testimony at trial, Troutman solicited a political contribution from a bank executive, emphasizing that he controlled the bank’s ability to receive state business. Johnson then stated, “You have to pay to play,” because “this is how business is done.”

The same phrase surfaced in the testimony of a witness in the successful 2007 prosecution of former state treasurers Michael Montoya and Robert Vigil for soliciting kickbacks from contractors who invested hundreds of millions of dollars in state money. One witness in the case stated, “My understanding is that’s how business is done in New Mexico.”

In Vigil’s case, jurors saw videotape of then-Treasurer Vigil accepting cash payments in 2005 of $11,500 from a state contractor. Vigil contended that he was not accepting a bribe for steering a state contract to the investment advisor, but was rather accepting the cash as a campaign contribution, which would make it perfectly legal. This defense underscores the frequently murky line between bribes and campaign contributions.

A similar situation came to light in the fall of 2008, when former Senate President Pro Tem and Majority Leader Manny Aragon pleaded guilty in a scheme designed to skim about $4.2 million from a state contract to construct a new federal courthouse in Bernalillo County. Sen. Aragon sponsored legislation to pay for the new courthouse, and then conspired with courthouse administrator Toby Martinez to hire a specific architectural firm to design the building. The architectural contractor kicked back some of the dollars from the contract to Aragon and Martinez. Former Albuquerque mayor and registered lobbyist for the architectural contractor, Ken Shultz, also pleaded guilty in the case for delivering the kickback payments to Aragon and others.

The common denominator in these recent scandals is public contracts worth millions of dollars. Because of the high stakes there is a temptation for individuals and businesses seeking government contracts to make political contributions to the elected officials who will decide whether to award them the contract. Meanwhile, for elected officials running increasingly expensive campaigns there is a similar temptation to accept those contributions.

In fact, relationships between contractors, lobbyists and elected officials often begin on the campaign trail at political fundraising events. To change how business is too often done in New Mexico, we need to start at the beginning — before officials are elected and already indebted to contractors, lobbyists and various special interests.

Two years ago, the Legislature and Gov. Richardson took an important step toward changing this culture of corruption when they enacted New Mexico’s Gift Act by a strong bipartisan majority. The law bars government contractors, potential contractors, special interests seeking major government subsidies or tax breaks, and lobbyists from giving gifts worth more than $250 to the state candidates or public officials.

The Gift Act begs the question: if we believe that special interests and lobbyists should not give gifts worth more than $250, why should they be able to make campaign contributions worth as much as $4,600 in a single election cycle?

Think New Mexico has just released a new report, Restoring Trust: Banning Political Contributions from Contractors and Lobbyists, calling for the legislature and Gov. Richardson to take the next logical step: enact legislation prohibiting government contractors, special interests seeking major government subsidies or tax breaks, and lobbyists from making or bundling political contributions to state or local elected officials.

Excerpted and adapted from “Restoring Trust: Banning Political Contributions from Contractors and Lobbyists.

Fred Nathan is founder and executive director and Kristina Fisher is Associate Director of Think New Mexico. Visit Think New Mexico’s Web site at www.thinknew

mexico.org for more information, to obtain a copy of the report, or to learn how to get involved in this effort to change the political culture in New Mexico.