Susana Martinez' Swan Song?

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Column: Susana's Tax and Rev Woes?

By Hal Rhodes

Upon Reflection

POSTED: 07/23/2015

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Back in January, as he was about to be sworn in as New Mexico's attorney general, Hector Balderas reminded an Albuquerque Business First reporter that during the previous eight years as state auditor he had exposed corruption in a number of state agencies.

As attorney general, he will be no less vigilant, Balderas pledged. The "Attorney General's Office has powers," he noted. "That's what's exciting about the Attorney General's Office."

Roughly two weeks ago, Balderas' successor as state auditor, Tim Keller, handed the new attorney general a preliminary investigation conducted by an independent, certified forensic investigative accounting firm indicating that top officials of the state Taxation and Revenue Department "improperly intervened in tax matters."

It was subsequently reported that one of the top Tax and Rev officials under scrutiny is none other than the department's cabinet secretary, Demesia Padilla, about whom Keller said in a letter to Gov. Susana Martinez, "there is reasonable basis to open an investigation into" whether "the secretary improperly influenced, or attempted to influence the tax audit of a former client."

Before joining the Martinez administration in 2011, Padilla was part owner of an accounting firm, although neither Keller nor Balderas has revealed a "former client" of that firm who might allegedly have received personal attention from the secretary and her cohorts at Tax and Rev.

By all accounts, the investigation into Secretary Padilla's efforts on behalf of a "former client" began in early February with an anonymous tip left on the Fraud Hotline maintained by the Office of State Auditor.

It's all quite mysterious, and key questions beg for convincing answers.

Who is the former client Padilla allegedly tried to help in her capacity as head of the tax department? What kind of help might she allegedly have tried to render? And why?

In his letter to the governor, State Auditor Keller reported that the outside forensic auditing firm that conducted the preliminary investigation uncovered evidence that the secretary's activities were somehow calculated to safeguard against "possible liability stemming from her previous work for the taxpayer as a certified public accountant."

Keller's letter also claims that certain unnamed top Tax and Rev employees "who refused to support the secretary's efforts may have experienced retaliation."

And, if that were not enough, it turns out that in the course of their inquiry into this affair, the outside investigators reportedly came upon a whole batch of audio recordings featuring Tax and Rev officials in discussions related to this business.

True to custom when trouble surfaces in the Martinez administration, the governor has mainly kept a low profile with few if any comments relevant to the charges against her cabinet secretary at the Department of Taxation and Revenue.

Also true to custom, Martinez's staffers have thundered forth with a regrettable if inevitable battery of attacks on the State Auditor, accusing him of everything from partisanship to headline chasing.

Which leaves the rest of us to wonder if all that smoke billowing out Secretary Demesia Padilla's regime at Tax and Rev might actually have some flames fanning it.

Naturally the state Democratic Party chairwoman, Deb Haaland, isn't taking a charitable view of the situation. New Mexicans "must demand the highest standards of our public officials and unfortunately Secretary Padilla has fallen short . The responsible way to move forward is for her to submit her resignation to Gov. Martinez," Haaland concluded.

Perhaps. But a no less responsible way to move forward is for the state Attorney General to use those powers about which he spoke before taking office. Balderas has the matter under review.