New Energy Economy, Renewable Taos, Democracy Rising, Indivisible Nob Hill, and Retake Our Democracy have filed a formal complaint with the State Auditor, the Ethics Commission, and and the NM Supreme Court Disciplinary Board. This is a VERY big deal. Skip the video below to get straight to the story.
Retake Conversation with
Quivira Coalition Director, Sarah Wentzel-Fisher
7.17.21 at 8:30 AM on KSFR 101.1 FM, streaming live from KSRF.org or if you missed it, just click below. Retake’s radio show hasn’t had many conversations focused on sustainable agriculture, land, and water use, so this is an informative piece, worth your time. We spoke about the key elements of effective local food systems, the many benefits resulting from strong local food systems, the challenges faced by farmers and ranchers in NM, and the roles played by Quivira Coalition in supporting those farmers and ranchers and educating the public.
Evidence of fraud, corruption emerge from discovery in PNM/Avangrid proposed merger
Today, we offer comment on the ethics and fraud charges filed with the State Auditor Brian Colón. The complaint was prepared by New Energy Economy with input from Democracy Rising, Renewable Taos, Indivisible Nob Hill, and Retake Our Democracy who jointly filed the complaint. Filed Thursday, with a press release circulated on Friday, a searing investigative report has already been published by Searchlight‘s Lindsay Fendt, “Powerful ties: New Mexico attorney general accused of violating state ethics laws in negotiating utility merger.”
The gist of the claims are that Attorney General Balderas oversaw five years of multimillion dollar contracts awarded to his friend, law school colleague and law practice partner, Attorney Marcus Rael and his firm, Robles, Rael & Anaya P.C. To be clear, over many administrations it has long been the practice of the AG’s office to use outside counsel to handle cases where the AG’s office doesn’t have the staff time or expertise to manage cases. So, there is nothing untoward about the AG awarding cases to outside counsel.
What set off the alarms was the sheer volume of cases awarded to Rael and the shameless performance those contracts generated. Rael received from the AG office three times the amount of contracts of the next most utilized private law firm. Indeed, while pointing to multiple very large contracts awarded to Rael, the complaint zeroes in on the outrageous level of billing related to Texas v. NM, a momentous dispute between Texas and NM in relation to water rights.
“The above invoices represent many hundreds of hours billed every three-month period for more than three years. For the “smaller” invoiced amounts there wasComplaint filed with State Auditor, July 15, 2021
an alleged four to six hundred hours worked by the firm, but there were certain other invoices that the Rael firm billed taxpayers, and the NMAG paid, for over a
thousand hours in just one three-month period.”
The complaint goes on to offer detailed information on the stunning level of billing by Rael and his firm, work that would have required working seven days a week, 10 hour days for months on end. The complaint also notes that despite its IPRA (Inspection of Public Records) request, multiple contracts between the AG and Rael were not disclosed and are not posted on the state Sunshine Portal, a violation of the Sunshine Act
Nonetheless, enough evidence was disclosed to warrant a full investigation by the State Auditor. Stunningly, despite hundreds of hours billed to the Texas v. NM case, Rael sought delay after delay from the judge, indicating that more work needed to be done. This amused neither attorneys for the state of Texas nor the judge presiding over the case. From the attorney representing the state of Texas:
“They have done very little in terms of keeping on schedule…You’re hearing the frustration in my voice because this is just exactly what we’ve experienced since way back when Mr. Rael said they weren’t ready, that the schedule had to accommodate them, that they needed six more months than Texas did before they could issue their expert reports. This is a refrain we’ve heard from day one of this litigation and it continues and it continues today.” Id., pg. 30-31Complaint filed with State Auditor, July 15, 2021
“They had one deposition scheduled — one deposition scheduled before all of this occurred before the deadline for when they were to file the report, so the fact that they somehow now need months of depositions before they can file their report — it’s just disingenuous.” Id., pg. 51.Complaint filed with State Auditor, July 15, 2021
So, in one of the most important cases facing NM, the resolution of its water dispute with Texas, and despite hundreds and hundreds of hours billed to the case, Rael, et al had conducted just one deposition while Texas had completed all its work and was prepared to submit its report. In their defense, Rael’s colleague, Attorney David Roman testified that the reason for this delay was that he was being transferred to another case. Roman offered this in NM’s defense:
“I have been the one who has had the bulk of all of the day-to-day operations of the case whether it be issuing and responding to discovery, taking and preparing for a number of depositions, coordinating all of the caseComplaint filed with State Auditor, July 15, 2021
coordination with state agencies, even working on the day-to-day strategy, meeting with the other parties and that’s been the role that new lead counsel would have to step in and fill. Because of competing cases of large stature Mr. Rael has not been involved to the extent that may have been thought otherwise.”
The emphasis above is mine. While Rael had been billing for a virtually full-time commitment to the water case for months, under oath, Attorney Roman claimed to have been doing the bulk of the work because Rael was committed to other cases. Really? How many cases can one attorney possibly handle? And how does one justify hundreds of hours billed to a case while not really doing much on the case? Apparently, the judge was not amused, as he dismissed the motion for a delay.
But it gets worse. According to testimony submitted to the courts in relation the NM vs Volkswagen case, Robles, Rael & Anaya P.C. submitted an Unopposed Motion for Attorney Fees on December 20, 2019 that stated:
“Counsel committed to this case knowing that doing so would likely preclude them from accepting other matters. As noted above, the full-scale litigation of this case would have required an extraordinary commitment to discovery, not to mention the time-consuming motion practice and argument-preparation that comes with high-stakes litigation involving sophisticated counsel… Counsel was prepared to turn away other employment to meet the needs of this litigation.” See, Exhibit D.Complaint filed with State Auditor, July 15, 2021
Are you losing track? Rael et al, billed thousands of hours to the Texas vs NM, while in the testimony submitted above, they claim that their work on the Volkswagen case is precluding their taking any other work. And there is more…
“We are aware of at least three additional contracts Marcus Rael has been awarded that are not reflected in the IPRA response from the NMAG’s office, State of New Mexico et al v. Volkswagen Group of America, Inc. et al., filed March 1st, 2016, The State of New Mexico v. Sterigenics U.S., LLC et al., filed December 28th, 2020, and The State of New Mexico v. Gilead Sciences, Inc., filed March 22nd, 2021.”Complaint filed with State Auditor, July 15, 2021
While New Energy Economy has not been able to get the number of hours Rael et all have charged to the Volkswagen case, they were able to learn what Rael et al were paid: $4,050,000 plus expenses of $129,928.
According to Searchlight, this isn’t the first time the volume of contracts to Rael has come under scrutiny. From Searchlight:
“What’s more, Rael is alleged to have billed for hundreds and hundreds of hours each month for years. In 2018, then-state auditor Wayne Johnson opened an investigation into the relationship between Balderas and Rael and the bidding process for outside firms, following an anonymous tip about the overwhelming amount of work that the attorney general’s office was sending to Robles, Rael & Anaya. The results of the investigation were never made public.Searchlight‘s Lindsay Fendt, “Powerful ties: New Mexico attorney general accused of violating state ethics laws in negotiating utility merger.”
We close this post with how Rael has exercised undue influence in the Avangrid merger case. Recall, Rael is a law school colleague, former partner, and friend of AG Balderas. He has been the AG’s go-to attorney on some of the most important cases facing the state, earning Rael millions of dollars in contracts over the past three years. While it would appear that those millions did not result in a competent representation in one of NM’s most important cases, Texas v. NM, certainly that kind of relationship must yield something of value to the AG’s office. Read on!
As evidence of Rael’s influence with the AG office, Searchlight points out that Rael met with the AG office 18 times in February and March of 2021 working directly as the attorney for Iberdrola, Avangrid’s parent company, and being paid $400/hour, twice the rate he charges the AG office for legal work on its behalf. The Attorney General had not been willing to sign off on the Avangrid merger, as he had significant concerns with the Avangrid merger despite those meetings.
“On April 2, Balderas told the Albuquerque Journal that he had concerns about the merger’s lack of benefits for utility customers and worried about utility profits leaving the state. Experts for the state recommended massive changes, including doubling customers’ credits, making a 30-fold increase to the economic development funds paid to New Mexican communities, and placing the cost for dumping the Four Corners Coal Plant on shareholders, rather than customers. “Searchlight’s Lindsay Fendt, “Powerful ties: New Mexico attorney general accused of violating state ethics laws in negotiating utility merger.”
According to Searchlight, on April 5, Rael paid one last visit to the AG. While there is no record of what was discussed, shortly thereafter the AG announced an abrupt reversal, accepting a deal with Avangrid that fell far short of what he had announced days earlier as being necessary to obtain the AG sign off.
How far short? According to Searchlight, pretty far short:
“The revised agreement includes some additional benefits for the state, customers, tribal communities and union workers — but it saves PNM and Avangrid-Iberdrola $395 million that would have gone to customers and communities if the experts’ suggestions had been adopted in full.”Searchlight’s Lindsay Fendt, “Powerful ties: New Mexico attorney general accused of violating state ethics laws in negotiating utility merger.”
Despite this post outlining more than enough evidence to cause concerns and to justify filing a complaint calling for a thorough investigation, there is so much more in the Searchlight piece and the complaint itself, I recommend readers take a look at both.
- Searchlight’s Lindsay Fendt, “Powerful ties: New Mexico attorney general accused of violating state ethics laws in negotiating utility merger.”
- New Energy Economy, et al Complaint filed with State Auditor, link below. It is actually a fairly easy read, as well.
We will keep you updated on this important development. I am sure that over the coming days the AG, Avangrid, PNM, and others will rally around the AG and attack New Energy Economy. Indeed, an AG spokesperson has already weighed in offering that “New Energy Economy has sunk to a new low.” However, the numbers don’t lie and the new low that has been achieved appears to be with the AG’s office and Marcus Rael. But, if you can’t rebut the message, all you have left is to attack the messenger. Stay tuned!
In solidarity and hope,
Paul & Roxanne
Categories: Local-State Government & Legislation