State Sen. Tim Keller (D-Albuquerque) wants to apply similar changes to the board of directors at the troubled New Mexico Finance Authority (NMFA) that the legislature imposed on the board of the State Investment Council (SIC), which had its share of problems during the administration of then-Gov. Bill Richardson.

“As I look into it there are a lot of similarites,” Keller told Capitol Report New Mexico on Monday (Aug. 20) in Albuquerque as the the legislature’s New Mexico Finance Authority Oversight Committee held its first meeting since it was revealed a fake audit had been filed at the authority, putting a hold on a number of statewide bond projects and placing the state’s bond ratings in jeopardy.

“We’ve got some of the same problems [as the SIC had],” Keller said. “We’ve got a board with … very limited financial expertise. And we’ve got a board that was kind of set up to evaluate projects … And we need, let’s say, half of that. The other side needs to be oversight to ask those tough questions, to put their foot down when things don’t look right and that’s completely absent from the board right now.”

Keller plans to introduce a bill in the next legislative session to re-form the NMFA board.

And it seemed that a number of fellow legislators on hand Monday agreed — including the chair and vice-chair of the committee.

“We have appointees to the board, they’re good people … but do they have too much else on their backs,” state Sen. and committee chairwoman Mary Kay Papen (D-Las Cruces) said. “And how can you read all the papers and keep up to snuff if you serve on umpteen boards?”

Vice-chair and state Rep. Patricia Lundstrom (D-Gallup) seemed open to the idea as well.

“I’m not so convinced that we should have so many members put in by one person,” Lundstrom said, adding, “I think they need to have some qualifications, obviously banking and accounting qualifications.”

After the SIC reported losses of millions of dollars during the Richardson administration amid suspicions of insider, pay-to-play deals, the legislature changed how SIC board members would be selected, replacing a number of governor-appointed seats with appointees from the legislature as well as instituting staggered terms in an effort to diffuse power.

Those moves have been generally well-received and the newly-constituted SIC board has gone to great lengths to show its attempts at transparency and executive independence.

Just as in the case of the SIC, any changes in the NMFA board would have to be done by statute — and that means getting a bill introduced and passed through the Roundhouse and then signed by Gov. Susana Martinez.

But would any changes to the NMFA board end up making the authority — which is a quasi-governmental entity — less flexible and over-regulated?

Here are Rep. Lundstrom and Sen. Keller on that point:

 

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At Monday’s committee meeting hearing, the NMFA’s chief financial strategist, Michael Zavelle, told committee members that all the authority’s bond payments have been made and said he hopes that can assuage some concerns Wall Street ratings agencies have as they consider whether to maintain the state’s excellent bond ratings.

Last Friday, the NMFA’s acting chief executive officer, John Gasparich, told Capitol Report New Mexico he thinks the state can avoid a downgrade, which would force New Mexico taxpayers to pay higher interest rates on NMFA-sponsored projects. Click here to read that story.