Gov. Susana Martinez, insisting that she and other politicians have not influenced the state’s management of billions of dollars in investments, nonetheless called Tuesday to boot elected officials off the council that oversees the state’s endowments.
Martinez’s reversal on a long-running proposal to depoliticize the State Investment Council comes amid new questions about the links between her re-election campaign and firms that manage state funds valued at some $22 billion. She made her stand in the face of a mutiny by some council members, including fellow Republicans, who have accused her of trying to stifle criticism.
Just last week, New Mexico Land Commissioner Aubrey Dunn, who sits on the council, questioned whether politics has played a role in some of the state’s investment decisions.
The International Business Times, in collaboration with the nonprofit watchdog group MapLight, published a story saying people associated with eight firms that handled $757 million in state investments contributed more than $1.2 million to Martinez, her political action committees and national Republican organizations that have supported her.
In a followup story by MapLight a few days later, Dunn questioned whether something besides sound analysis was at play in certain investment choices.
“I think we’re taking on extreme risk and not getting the return for that risk,” said Dunn, also a Republican. “I am concerned that pay-to-play may be involved in those kinds of investments.”
Some members of the 11-person investment council assailed those comments during a regularly scheduled meeting Tuesday at the state Capitol that turned bitter.
The governor described the original story as “click bait.” Deputy Investment Officer Vince Smith called it unfair and devoid of facts.
At one point, the governor went around the room asking investment managers if they felt any political pressure in their work. None said they had.
But questions about the ties between public officials on the council and the firms that manage its money are not new.
After a pay-to-play scheme during the administration of Democratic Gov. Bill Richardson, the state Senate and House of Representatives in 2011 approved with bipartisan support a bill to at least remove the governor from the council.
Newly elected Martinez vetoed the measure, writing that it did nothing to address the roles that two other elected officials play on the council. She was referring to the land commissioner and the state treasurer.
In 2013, the Legislature approved another bill that would change how seats on the council are awarded. Martinez did not sign it.
On Tuesday, member Lynn Hoffman renewed calls for reform.
Hoffman proposed eliminating the seats of the three elected officials on the council. She also called for barring any appointees who have accepted campaign contributions within a certain period, apparently a reference to former legislators.
“I think we need to remove the taint of campaign contributions entirely,” Hoffman said.
Martinez called on legislators to pass such a bill.
Senate Majority Leader Peter Wirth, D-Santa Fe, said legislators will take up the issue if the governor puts it on the agenda for the 30-day session starting in January. But whether Wirth would support overhauling the council depends on the specifics of the proposal.
“I certainly support removing the governor,” Wirth said.
But he pointed out that the land commissioner is responsible for generating the tax revenue that funds the investment council’s endowments and the state treasurer manages other investments.
“The state land commissioner should absolutely have a place at the table, as should the state treasurer,” Dunn said in a statement later. “If the governor wants off, let her off.”
The council voted last month to bar Dunn and State Treasurer Tim Eichenberg from closed sessions along with two other members after they declined to sign a new code of conduct.
This confrontation points to a conflict at the council’s heart. While some members have been publicly critical of the council’s efforts to recoup money from the pay-to-play scheme, others argue they are undermining the council’s work and should address their concerns internally.
Dunn responded with a letter charging that the new code of conduct was only intended to hide more of the council’s business from the public. He said it is his authorized duty as land commissioner to serve on the council, and he threatened legal action if the members do not rescind their ban.