SANTA FE, N.M. (AP) — Fin[auth] ancial settlements between a state investment board and private money management firms can continue to be subject to some limits on public disclosure under guidelines newly approved by the agency, an open government advocacy group said Tuesday.
The State Investment Council agreed to the policy for handling settlements as part of its continuing investigation and litigation over an alleged pay-to-play scheme involving state investment deals during former Gov. Bill Richardson’s administration.
The policy says the council “strongly disfavors” confidentiality provisions in settlements and it requires that all settlements be subject to the Inspection of Public Records Act, which will allow the public to request and obtain a copy.
Gwyneth Doland, executive director of the Mexico Foundation for Open Government, had wanted the council to prohibit confidentiality provisions that permit any restrictions on public disclosure.
“We’re disappointed and we think this sends the wrong message on transparency and accountability. It’s an improvement that doesn’t far enough,” Doland said in a statement.
The guidelines were approved Tuesday after board members added the provision clearly stating that settlements would be subject to disclosure under the public records law. However, Doland contends the law covers such settlements even without the council’s policy.
Last year, the council received a $250,000 settlement payment from a California-based investment firm but the state agreed not to voluntarily make a public announcement about it or issue a press release. The settlement contained a provision allowing disclosure under the public records law or in response to questions from the Legislature.
The settlement didn’t become public for more than a year — only after the Albuquerque Journal asked the agency for an update on settlements and filed a public records request.
Gov. Susana Martinez, the council’s chairwoman, said she had no problems with a settlement restriction that says the parties, including the state, won’t announce it at a press conference.
“If we had a press conference every time there was a settlement, that’s all we would be doing because there are many that go on throughout state government,” Martinez told reporters after the meeting.
However, the governor said she would oppose any future settlement if it had a provision similar to last year’s agreement between the council and the investment firm to “use their best efforts to keep this agreement … strictly confidential.” The governor said that would not be allowed under the council’s new policy.
Martinez also suggested that the council, at its monthly meetings, should announce whether it’s reached any recent settlements. That would have been prohibited under last year’s settlement, which said the state and the investment firm would not make a “voluntary public announcement” about it.
The council’s lawyer, Evan Land, defended last year’s settlement during Tuesday meeting and said it was reached after three months of negotiations in which the council insisted on the provisions that allowed for disclosure under the public records law and to the Legislature.
“We crafted a provision that you could drive a truck through for purposes of public disclosure and that’s exactly what happened,” said Land.
He said “we are trying to do the right thing” to recover money on behalf of the state.
Under the settlement, the state collected $250,000 from Rustic Canyon/Fontis Partners, which is based in Pasadena, Calif. The council approved a $20 million private equity investment with the firm in 2005 and that investment remains in place. The firm admitted no wrongdoing as part of the settlement but agreed to cooperate with the council’s investigation of pay-to-play allegations. At issue is whether money management firms paid questionable fees to politically-connected individuals and brokers for allegedly helping them to obtain state investment deals.