Cog in the Machine

Former NMFA head unpacks the Martinez administration's plan to gut the agency

Less than a week after being elected New Mexico's first Republican governor in eight years, Susana Martinez tapped a Beltway veteran to take on one of her most important tasks. 

As the new cabinet secretary of the Department of Finance and Administration, Rick May was Martinez' point man to balance a budget with a gaping $450 million shortfall. With 25 years of experience in Washington DC, most notably as a GOP budget director for the US House of Representatives in the 1990s, he seemed more than fit for the job. 

Yet shortly into the new administration's tenure, May, an assertive, plainspoken man, realized he was merely a cog in a bigger machine. On a recent afternoon, May sits at a table in his attorney's office, surrounded by documents. Once a Martinez administration golden child, he now finds himself in the unlikely role of whistleblower.

It all goes back to summer 2011, when May first saw a 13-point memo calling for a dramatic overhaul of state government. The memo mentioned him by name, indicating that May should be moved from his cabinet post at DFA to the New Mexico Finance Authority, a quasi-governmental agency that helps local governments secure bonds for infrastructure projects.

Because NMFA has an excellent bond rating, it can offer bonds at a lower cost to taxpayers, enabling local governments (like Santa Fe) to fund infrastructure projects (like the Railyard) they couldn't otherwise afford. May, at the time a member of NMFA's board of directors, to this day speaks highly of the agency's role.

"When a government-created entity helps local communities do something that saves taxpayer money, that is a legitimate function of government," the longtime conservative says.

But the Martinez administration saw things differently. The 13-point memo calls for a "complete assessment" of the authority's roughly 40 staffers, "with view to downsizing to half the current staffing level." Overall, it pushes for a significant reduction of NMFA's scope and responsibility.

"As I read that, I knew whoever [wrote] it, number one, did not either understand the function of the Finance Authority, or number two, wanted to destroy it," May says. (The governor's office did not respond to repeated requests for comment on this story. It has, however, affirmed the memo's authenticity, acknowledging that former DFA Deputy Secretary Dorothy "Duffy" Rodriguez wrote it, but downplaying it to the Albuquerque Journal as a "sheet of notes.")

In May's view, severely curtailing NMFA's authority is a dangerous prospect—and would favor private investment banks over local communities in need of sewers, public buildings and other infrastructure projects.

"They want the Finance Authority to be this sleepy little entity that only gives small loans to small communities, and…that these local communities should go through these private entities and pay higher interest rates," May says. "These other private entities are going to charge a lot higher fees than the Finance Authority ever did. They view the Finance Authority, I guess, as unfair competition."

The memo first leaked to the media last summer, while NMFA was in the throes of a high-profile audit scandal that eventually led to May's firing. Now, in the first on-record interview since, May describes the events preceding last summer's fracas.

May's first disagreement with the Martinez administration began in 2011, just months after his appointment as cabinet secretary. That summer, May says he met three times with Martinez' chief of staff, Keith Gardner, about his potential transfer to the top post at NMFA.

At one of the meetings, May recalls seeing the 13-point memo on Gardner's desk—and watching Gardner slowly move the memo out of sight over the course of the interview.

"If it was only an internal working document, why did he have it sitting there in a meeting with me talking about the future of the Finance Authority?" May asks.

By September 2011, the NMFA board voted to hire May as the agency's CEO, as prescribed in the memo.
The memo also proposed hiring Andrew Jacobson, a former hedge fund financial analyst and the husband of New Mexico Tourism Secretary Monique Jacobson, as May's deputy.

It wasn't long before staffers at the governor's office started calling him about hiring Jacobson, May says. At one point, he adds, two of Martinez' top officials even made the case in person.

When May finally did interview Jacobson, he says he sensed a "negative, anti-Finance Authority" view. Rather than making Jacobson second in command, May says NMFA offered him a lower-level job with a $75,000-$80,000 salary. Jacobson instead continued working at DFA.

Though May says he resisted the memo's directives, they nonetheless started to become reality. Its second point reads, "Let May take Kim Gonzales with him to NMFA. If not, move her out of the Office of the Secretary."

Gonzales, May's longtime secretary, worked directly under him at DFA. The day he left, Gonzales says she was reassigned "because of my loyalty to Rick." Both say Gonzales' quick relocation out of the secretary's office shows that the 13-point memo was more than just "a bunch of ideas."

There are further indications that both the governor's office and private finance firms support gutting NMFA. An October 2011 email sent to May by Paul Cassidy, a managing director at RBC Capital Markets, shows how eager private firms were to supplant the agency. In the email, Cassidy mentions a recent meeting about bonding for a sewer project.

"I can tell you other brokerage firms and law firms in the audience this morning are cheering an exit of NMFA," he writes.

And during the legislative session, Martinez requested an amendment to put the agency directly under executive-branch control.

That failed, but she also vetoed a bill by state Sen. Tim Keller, D-Bernalillo, that would have reformed the agency. In her veto message, Martinez wrote that NMFA's true problems "stem from its role as a quasi-public agency that is not subject to adequate public accountability." She added that she was "extremely disappointed" that her recommendations to bring NMFA under the State Budget Act and state procurement code weren't included in the final bill.

But the Martinez administration may not need the Legislature's approval to move ahead with its plans. According to NMFA's most recent internal audit, the agency is already "working to move its internet services over to the New Mexico State Contract and to link directly to the state's data center."

Such a move, May argues, erodes NMFA's independence. He's not the only one who thinks so. 

"It seems to be another example of the governor's office not really appreciating the financial and management independence that's supposed to be part of NMFA and that makes NMFA an effective institution," Keller says.

Today, May is on a mission to clear his name after the fallout he experienced after the audit scandal. He also offers some advice about the Martinez administration.

"Don't listen to what they say. Watch what they do," he says, pointing to a copy of the memo. "Because this is really the true agenda."

View the 13-point memo:

Letters to the Editor

Mail letters to PO Box 4910 Santa Fe, NM 87502 or email them to editor[at] Letters (no more than 200 words) should refer to specific articles in the Reporter. Letters will be edited for space and clarity.

We also welcome you to follow SFR on social media (on Facebook, Instagram and Twitter) and comment there. You can also email specific staff members from our contact page.