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State Auditor Flags NMED Secretary’s $15,000 Airplane Tickets

OSA says its investigation remains active

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An investigation into allegations the state Environment Department misused or misspent public funds on international travel “identified several concerns and potential violations,” according to a June 13 letter State Auditor Joseph Maestas sent Environment Secretary James Kenney.

In the letter, Maestas says the Office of the State Auditor undertook a fact-finding investigation into allegations that Kenney and a division director had upgraded from economy to business class for October, 2023 travel to Sydney, Australia, to attend the Sustainable Energy Council’s Asia Pacific Hydrogen Summit and participate in a public announcement by Australia-based hydrogen R&D company Star Scientific that it had chosen New Mexico for its US campus.

A news release at the time said Star Scientific signed a Letter of Intent with Gov. Michelle Lujan Grisham at the summit, which committed the company “to an intensive process of planning and negation of a site for a joint research and mass manufacturing facility in the Mesa del Sol district of Albuquerque.” In a statement at the time, Star Scientific Ltd. Global Group Chair Andrew Horvath was said to have thanked Kenney “for his leadership in bringing Star Scientific to New Mexico.”

New Mexico Gov. Michelle Lujan Grisham and Star Scientific Ltd. Global Group Chair Andrew Horvath New Mexico Gov. Michelle Lujan Grisham and Star Scientific Ltd. Global Group Chair Andrew Horvath sign Letter of Intent in October, 2023 in Sydney, Australia.

Maestas’ letter says NMED management appears to have “abused its authority”—as defined by government auditing standards—”by failing to consider the significant and excessive cost disparities” when they upgraded from the least expensive seat costing $2,058.65 per seat to ones that cost $14,922.50 per seat,” the letter notes.

The letter continues to say NMED management “inappropriately applied private business standards for travel and overrode important preventative internal controls of public resources,” and “and overrode important preventative internal controls.”

Moreover, the letter says, “As justification, NMED management stated that it was not feasible to travel to Sydney a day or two earlier via economy class due to scheduling and to accompany the governor, which resulted in not adhering to existing travel cost controls. However, the actual airline flight taken by the department secretary and division director, was at a different time, and on a different airline, than that utilized by the governor’s party and security. An extra day in a hotel to recover from the time difference, a day during which the Department Secretary and Division Director could attend meetings remotely or work online, could have saved NMED thousands of dollars.”

The letter concludes by recommending the department “take immediate and proactive steps to strengthen its internal controls, and update its relevant policies, regarding official travel” for department employees both within and outside the US.

In a statement provided to SFR, NMED says, “The New Mexico Environment Department (NMED) upgraded to business class for extended international air travel to allow for a full and productive workday upon arrival. This was essential for effective participation in the Asia Pacific Hydrogen Summit where the Governor and NMED secured and announced a $100M investment in Albuquerque by Australian-based Star Scientific. The NMED acknowledges the need for stronger internal controls and the Department of Finance and Administration will replace its interim travel policy with a final travel policy for state employees next month.”

Via email the Office of the State Auditor’s Chief General Counsel Andréa Salazar tells SFR its investigation into the matter remains active.

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