SANTA FE, N.M. July 16, 2021 — Several NM organizations filed formal complaints Thursday against the NM Attorney General Hector Balderas and his associate Marcus Rael and Mr. Rael’s firm, Robles, Rael and Anaya P.C. calling for investigations by the State Auditor, NM Ethics Commission, and the Disciplinary Board of the N.M. Supreme Court in light of evidence of potential fraud and corruption in violation of the Governmental Conduct Act, NMSA 1978 Section 10-16-1 et seq., and the Fraud Against Taxpayers Act, NMSA 1978 Section 44-9-1 et seq.
New Energy Economy, Indivisible Nob Hill, Renewable Taos, and Retake Our Democracy filed the complaints based on the NMAG’s questionable awarding of contracts to and approval of improper invoices by Attorney Marcus Rael from 2016-present. These business arrangements appear to violate state law that prohibits Conflicts of Interest and Favored Treatment as well as Procurement & Contracting Improprieties. The evidence represents millions of dollars of suspected misuse and abuse of taxpayer funds.
The complaint derives from evidence brought to light as a result of interrogatories filed in the PNM/Avangrid/Ibedrola merger case and a subsequent IPRA. An Inspection of Records Act (IPRA) request with the NMAG was filed on April 9, 2021 by New Energy Economy to try and determine the extent of the relationship between the NMAG and Mr. Rael and his law firm. (1) The IPRA was filed after Mr. Rael’s entry into the Merger case Case No. 20-00222-UT at the NMPRC appeared to correspond to the Attorney General withdrawing its opposition to the PNM/Avangrid merger despite the NMAG’s own expert witnesses’ position against the merger.
“We became suspicious of corruption after the NMAG suddenly shifted its position in the merger case. The AG’s experts testified against the merger, detailing why the proposal fails to adequately protect New Mexicans’ rights and the public interest. Then suddenly NMAG changed its position after visits from Rael. We wanted to understand why Rael would be able to have such an impact when the deal didn’t appear to meet the NMAG’s minimum requirements for advocating in favor of the merger. After repeated failures to supply a response to the IPRA, the NMAG coughed up documents that appear to show significant conflict of interest including improper awards of contracts, improper approvals of billings and significant waste of public funds,” stated Mariel Nanasi, Executive Director of the environmental and corporate watchdog group New Energy Economy.
“Fighting fraud, waste and abuse in government contracting is the job of the chief law enforcement officer of our state, but when he is the subject of the allegations then we must turn elsewhere. We’ve filed a complaint with the State Auditor, the Ethics Commission and Disciplinary Board of the N.M. Supreme Court thus far,” Nanasi, explained.
“The evidence appears to be overwhelming. We did what we thought we must do: turn this information over to entities whose responsibility is to investigate so that N.M. taxpayers can be protected from fraud, waste and abuse. We must stand up against corruption and demand accountability from our elected officials,” stated Tiffany Stevens, Board Member, on behalf of Indivisible Nob Hill.
“Democracy only functions when our elected officials abide by their oaths and are accountable to the people. Corruption at any level erodes our democracy, and at the highest levels it creates damage that is very hard to heal. Corruption like is being alleged should never be accepted as an inevitability in government. Accountability is essential no matter what party is involved or in power”, Maria Perez, co-director, Democracy Rising.
The groups are calling for a full investigation of the Attorney General who has a duty to “full disclosure of real or potential conflicts of interest” as a “guiding principle for determining appropriate conduct” and must take “reasonable efforts [] to avoid undue influence and abuse of office in public service.” (2)
Evidence received through the discovery process and IPRA thus far (the responses were not fulsome) suggests that the NMAG has improperly retained Attorney Marcus Rael, a personal friend and former law partner, and his law firm, Robles, Rael and Anaya P.C., to represent the State in lucrative cases, regardless of whether they had expertise in that particular arena or not and whether they had experience before the US Supreme Court. (3) These contracts give the appearance of favored treatment and contracting improprieties, and billing records indicate that the firm may have wasted many millions of taxpayer dollars.
The complaint calls on the state auditor, Colon to use his authority under the Audit Act, NMSA 1978 Section 12-6-1 et seq., to audit and investigate the billing records described below and attached, and report violations consistent with your duties under the Audit Act. (4) Similar complaints were also filed with the NM Ethics Commission and the Disciplinary Board of the N.M. Supreme Court.
“The PNM/Avangrid merger case is riddled with allegations of fraud and corruption. We learned last week that the Chief Executive of Iberdrola, Avangrid’s parent company, and three other Iberdrola Executive Committee members are being investigated for fraud, bribery, and spying in Spain. Now it appears that they hired a NM attorney with access to and a conflicting interest with the NMAG who may be guilty of violating the Fraud Against Taxpayer Act. We hope that the NM Auditor, Ethics Commission, and Disciplinary Board will take our concerns seriously and hold all parties accountable for any abuse of taxpayers’ and ratepayers’ rights. If there is an explanation that can justify the evidence laid out so clearly in the complaint, I’d sure like to see it. An investigation appears warranted.” said Paul Gibson, Co-Director of Retake Our Democracy.
“We fear that despite expensive ads attempting to greenwash and dismiss Iberdrola and Avangrid’s history of regulatory violations and alleged criminal violations - some digging has unearthed another troubling connection to what appears to be fraud and corruption in New Mexico. It is highly suspicious and troubling that Iberdrola/Avangrid hired Marcus Rael, at $400/hour, to get his friend and former law partner, Attorney General Hector Balderas, to sign on to the PNM/Iberdrola/Avangrid merger deal. Even more disturbing is the body of evidence now uncovered that suggests that the inappropriate relationship between the NMAG and Marcus Rael may be chronic and may have facilitated the misappropriation of millions of dollars of New Mexican tax dollars,” stated Daniel Pritchard, Renewable Taos.
1] New Energy Economy’s IPRA to the NMAG, April 9, 2021. 2] NMSA 10-16-3(C) 3] https://www.sfreporter.com/news/coverstories/2018/01/09/in-deep-water/ 4] The Audit Act provides the State Auditor with the power to audit state agencies (NMSA 12-6-3(C)), imposes a duty to report violations of criminal statutes (NMSA 12-6-6), and provides the power to sue to enforce repayment of funds “for which an agency is accountable under law.” (NMSA 12-6-8).