Sunday, October 30, 2016

State Rep. Andy Nuñez Could Be in Serious Legal Trouble

The New Mexico Secretary of State's Office (“SOS”) is investigating charges that State Senator Andy Nuñez embezzled campaign funds and broke election laws. 
On September 30, citizen Linda Alvarez filed a detailed complaint, including dozens of pages of documentation. The SOS wrote Nuñez that he was alleged to have violated “the Campaign Financing Law and possibly other state statutes,” inviting him to respond within 15 days. The law strictly limits campaign expenditures. Nuñez sent in a one-page response. The SOS is now doing its own investigation of his campaign reports. 
Nuñez denied embezzlement of campaign funds, or any other misconduct, but didn't confront most detailed allegations. He said he had never asked anyone for a campaign contribution; added that his accuser hadn't understood legislative per diem; and explained why he (or his campaign) hired and paid $15,000 to his daughter and grandson. (His daughter “has to come to Hatch [from Las Cruces] to not only file my reports but to send Thank-You letters” and his grandson put up signs for him.)

Alvarez accused Nuñez of using campaign funds to pay expenses incurred while he was a lobbyist, not a legislator. Nuñez lost his reelection bid in November 2012. He became a lobbyist for two irrigation districts. He apparently used campaign funds to attend several legislative and committee meetings during 2013, and some events in 2014. The SOS said that if Alvarez's allegations were true Nuñez's conduct would be illegal.

Nuñez's letter asserted that he'd “never used Campaign funds to subsidize my lobbying work, or as my position Mayor of Hatch.” 
The law reauires candidates to do their best to report the professions and employers of campaign contributors who provide more than $250. Nuñez lists under “Occupation” the word “Friend” for Don Tripp (three 2016 contributions totaling $6,000), Garry Carruthers ($250 in 2014), and other familiar names; but any casual newspaper reader knows Tripp is a State Representative and Carruthers is NMSU's President. Nuñez responds: “My entries as friends and is entered and has never been questioned.”

Alvarez alleged he'd paid his daughter and grandson “more than $15,000 for their 'help' on his campaigns.” Nuñez replied that this was true, because his daughter “has to come to Hatch [from Las Cruces] to not only file my reports but write Thank-You letters,” while his grandson “put up signs for me because he is capable and has a pickup and can do the work.”

Nuñez's letter didn't explain why reimbursement amounts for his expenses were usually round numbers – $200 or $400, rarely $349.23. He told me he rounded expenses downward, for convenience, taking less than he actually spent. Ken Ortiz from SOS commented that “for true transparency and best practice, he should be reporting the exact expenditure, down to the penny, and should be retaining receipts to substantiate them.” The SOS cannot force Nuñez to provide substantiation; but it can ask, and if he refuses it can fine him for violations and/or refer the matter to a DA or the AG.

Nuñez's letter did say “I have employed Legal Counsel to take Ms. Alvarez to court for calling me an embezzler of $32,000.02.” He added he had “included a list of her court records to show that this is not her first attempt to accuse someone of illegal activities.” SOS stated it received no such list, adding that Alvarez court cases would be “irrelevant to his campaign reporting.” Nunez's lawyer, T.J. Trujillo, says he's waiting to hear from the SOS, but “we don't feel the allegations have any merit at this juncture.”

It'll be interesting to see how this matter progresses.

[The column above appeared in the Las Cruce Sun-News this morning, Sunday, 30 Ocrober, 2016, and is also available on the newspaper's website and KRWG-TV's website.  I welcome questions and comments on any of these sitesBelow, I've copied in two relevant statutory provisions and added more specific information on what Nuñez's own campaign reports (and his many changes to them) seem to show.]

[Perhaps the biggest allegation leveled by Ms. Alvarez is that through a series of loans by him to his campaign and reimbursement to himself by the campaign for expenses Mr. Nuñez embezzled $32,000.02 from the campaign account.   I'll leave the state officials to figure that one our.  Or I'll interview Ms. Alvarez at some point.  
I can make the following observations: 

(a) it appears likely that some of the expenditures in 2013 and probably 2014 were not proper campaign expenditures under 1-19-29.1 (below);
(b) Mr. Nuñez didn't try to follow the requirement to include people's occupations in his reports if they gave him more than $250 in a campaign; 
(c) depending upon how many receipts he kept, he could be in a little trouble -- or a lot -- for all the expenditures for which he just gave round numbers.  While he sounds convincing when he says to me that he just rounded down, for convenience, the election overseers, like the tax people, are likely to want to see records, to ensure he didn't round UP -- or make up some expenditures out of whole cloth.  Either he has all those receipts or he doesn't;
(d) the $15,000 to daughter and grandson is another round number, and maybe a large one for the work he describes in his letter to the Secretary of State.  In most legislative campaigns, volunteers put up signs; and usually the candidate or a campaign treasurer, often a volunteer, fills out the reporting forms. Filing his reports, if his daughter's a CPA, could add up to  $___ per election.  Putting up the signs (not buying them, just putting some up) would seem a minimum-wage sort of job.  Depending on how many elections the $15,000 covered, his payments could be a little generous or way out of line
(e) Ms. Alvarez also alleged a "cover-up," noting that during the past three months Mr.Nuñez amended each of his official reports from recent election cycles, amending one of them ten times.  The amendments are public record.  Nuñez filed his Second General Election report for 2014 in October 2014. He amended it once in September of 2015 and then a whopping six times in September-October 2016. His Third General Election Report in 2014 was amended eight times, seven during the past two months. His Fourth? Nine times, eight in the past three months. Similarly his reports from 2010-2014 were amended numerous times in 2016.

By contrast, the ten reports filed in 2014 by Representative Jeff Steinborn have been amended a total of 0 times. Same for State Senator Ricky Little. State Senator Nate Gentry filed ten reports in 2014-2015, and amended five – but most within a month or six months, not in the fall of 2016.
Ms. Alvarez lists numerous payments to himself that she says disappeared from the reports in this amendment process.  She says they total $34,770.02.  I didn't check them all.
I did check the 2014 4th General Election report, covering mid-October to the end of November.  As submitted, it showed $7,420.36 in expenses.  As amended (final 2016 version), it showed $4,804.36.  (That shaved off better than 35% of the original amount.)  The two missing items in the final amendment were a $2,000 "debt payment" to himself on November 15th and a $616 mileage reimbursement to himself on November 29.]

[New Mexico      1-19-29.1 (Campaign funds; limitation on use) is very clear:

A.   It is unlawful for a candidate or the candidate's agent to make an expenditure of contributions received, except for the following purposes or as otherwise provided in this section: 

(1)   expenditures of the campaign;
(2)   expenditures of legislators that are reasonably related to performing the duties of the office held, including mail, telephone and travel expenditures to serve constituents, but excluding personal and legislative session living expenses;
(3)   [irrelevant];
(4)   [irrelevant];
(5)   expenditures to eliminate the campaign debt of the candidate for the office sought or expenditures incurred by the candidate when seeking election to another public office covered by the Campaign Reporting Act;
(6)   [irrelevant]; or
(7)   disbursements to return unused funds pro rata to the contributors if no campaign debt exists

It doesn't take a law degree to understand that when you are unseated effective January 1, 2013, expenses to go to meetings and legislative sessions during 2013, to lobby for a client or as mayor of a city or for personal reasons, are not campaign expenses under the law; nor should similar expenses in 2014 qualify, although if I were his lawyer I'm sure I'd argue he was taking such trips in aid of seeking election to the Legislature in November 2014.]
[1-19-31 (Contents of Report) provides:

A.   Each required report of expenditures and contributions . . . shall include:

(1)   the name and address of the person or entity to whom an expenditure was made or from whom a contribution was received . . .; [and] (2)   the occupation or type of business of any person or entity making contributions of two hundred fifty dollars ($250) or more in the aggregate per election.
Pretty obviously, Mr. Nuñez made no great effort to follow this portion of the law.]

1 comment:

  1. I have less regard for Nunez even than for S. Martinez, reputed governor of this Flatslachia, so-called state we live in.

    If authorities can nail Nunez, it'll be a small step toward civilizing this dry hole we live in.