--2 DOCUMENTS: Reform New Mexico Now Fined for Ethics Violations
       
Sept. 22, 2014

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DOCUMENTS: Reform New Mexico Now Fined for Ethics Violations

Taking months to respond to a complaint, Secretary of State Dianna Duran, R, assesses a small post-election fine against the GOP super PAC.

December 1, 2012, 3:00 am
By Justin Horwath and Peter St. Cyr

Months after an ethics complaint was filed against Reform New Mexico Now, the New Mexico Secretary of State has quietly issued a $250 sanction against the GOP political action committee.

At issue was whether Reform registered with the SOS within a ten-day period of receiving contributions, as required by law. On July 2, Democratic political operatives Sandra Wechsler and Neri Holguin filed an ethics complaint alleging Reform failed to register within that period. In her complaint, Holguin contended the super PAC received two checks on April 24, including $50,000 from Mack Energy Corporation and $130,000 from Chase Oil Corporation, but strategically waited until May 29 to register with the SOS. 

Reform argued those April dates were typos and amended its original filing. It later said the checks were received on May 9, but that the bank put them on hold because of the "large size of the deposit." Reform said the bank didn't make the PAC aware the funds were available until May 21.

Calling the complaint "baseless," Reform's attorney, Paul Kienzle III, wrote in an Oct. 20 letter to SOS that it was a part of "a coordinated strategy of harassment" on behalf of Democrats. He made the distinction between a contribution and pledge to contribute, arguing that New Mexico election law treats the two differently.

"A mere check, credit card, or contribution form from a contributor that has not cleared an account is a pledge to contribute," he wrote, "and nothing more until it actually clears an account."

The SOS disagreed. Citing statutory language that says a campaign contribution constitutes an "...advance or deposit [emphasis added] of money or other thing of value," Ken Ortiz, chief of staff for the SOS, wrote in a Nov. 20 letter to Reform's attorney that the office had imposed the $250 fine--$50 each regular working day for not registering on time.

"While we disagree with the Secretary of State's analysis, we respect her decision and will simply pay the small fine," Jay McCleskey, who founded Reform, writes in an email to SFR. "We note that the Secretary of State found multiple Democratic PACs were much later in filing their registration documents."

McCleskey is Gov. Susana Martinez' top political advisor who also runs her re-election committee and a separate political action committee, SusanaPAC.

Referring to Republican Secretary of State Dianna Duran, Wechsler--among the founders of the left-leaning Justice League PAC with Holguin--writes in an email to SFR that, "We're still wondering why Sec. Duran dragged her feet and did nothing until after the November election."

She and Holguin filed the ethics complaint on July 2. Weeks passed as Reform, a super PAC that can raise and spend unlimited amounts, financed negative political ads with nearly $2 million in contributions from oil companies and well-heeled out-of-state donors. The negative super PAC blitz came from both sides of the aisle and contributed to one of the costliest elections in New Mexico political history. (News, Nov. 8: How the Southwest Was Won).

Documents show Reform had been responding throughout the summer to at least four different ethics complaints filed by Democratic representatives who were upset that the Republican super PAC injected itself in their party's primaries. They too alleged Reform failed to register on time. Reform responded by producing three checks from individual contributors showing they came within the ten-day period. But it still didn't produce the checks from Mack Energy or Chase Oil.

Holguin and Wechsler continued to request that the SOS investigate when the checks were deposited into Reform's bank account. Yet in October, Duran's office granted Reform a 15-day extension to respond to the complaints. 

Responding to the complaint in the Oct. 20 letter, Kienzle, Reform's attorney, wrote to the SOS that Wells Fargo Bank held the checks for ten days, "because of the large size of the deposit." He attached a note from Gene Cunningham, a Wells Fargo representative, which said the $180,000 deposit, "had a hold placed on each item due to the dollar amount of the checks."

"The full dollar amount was made available on 5/18/2012," reads the signed note. 

But Wechsler is still waiting to see the two checks from Mack Energy and Chase Oil.

"Her polite slap on McCleskey’s hand should be followed up with a real investigation," writes Wechsler. "If the SOS was truly concerned about ethics in politics, she would do her due diligence and ask RNMN to simply show all the checks in question."





SFR will provide updates on campaign finance violations as they develop.

 

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