In the wake of the faked audits at the New Mexico Finance Authority (NMFA) that have threatened the bond ratings for the state, there’s talk about reconstituting the authority along the lines of another agency that was rocked by allegations of shady dealings — the State Investment Council (SIC).

Is that a good idea? Capitol Report New Mexico asked a couple members of the SIC on Tuesday (Aug. 28) who were open to it — with some reservations.

“I don’t think you guys [in the media] know the story,” SIC vice chairman Peter Frank said. “I don’t think anybody knows the story” about how an NMFA controller allegedly doctored documents supposedly with the approval of the authority’s chief operating officer. “It’s just incredible,” said Frank, who knows something audits as he spent 35 years as a senior partner at the accounting firm of PricewaterhouseCoopers.

Last week, the legislature’s New Mexico Finance Authority Oversight Committee met for the first time since the story broke and Sen. Tim Keller (D-Albuquerque) told reporters he plans on introducing a bill revamping the NMFA board along the same lines as the changes that were instituted in 2010 for members of the SIC.

During the administration of then-Gov. Bill Richardson the SIC lost millions of state dollars in questionable investments that were suspected of being driven by political rather than financial concerns. In reaction, the legislature changed the makeup of the SIC membership, reducing the power of the chief investment officer and replacing a number of governor-appointed seats with appointees from the legislature as well as instituting staggered terms in an effort to diffuse power.

“As I look into it there are a lot of similarities” between the NMFA and the SIC, Keller said. “We’ve got some of the same problems.”

Frank and fellow SIC board member Leonard Lee Rawson said changes to the NMFA along the lines of what happened at the SIC might be effective, although both men were reluctant to endorse them unreservedly.

“[The fake audit] got caught, it got resolved and things were in place to solve it,” Rawson said.

“Of course, the legislature always wants to be the hero, and say we need more oversight. We’ve got an oversight committee. I have a lot of respect for [oversight committee chairwoman Mary Kay] Papen but that didn’t solve it. You’ve got some discussion about too many people on the board and not attending meetings … elected officials don’t have time to be as involved [as they ought].

“[NMFA board member and cabinet secretary for the Economic Development Department] Jon Barela, he’s on something like, 31 boards. How can he do his job and be in office? … They get blamed for not keeping up with it or not being attentive or more diligent. So I don’t think the issue is more oversight. It’s about appointing people who have time to serve and get the elected people off.”

In that respect, Rawson and legislators on the NMFA Oversight Committee are in agreement.

“We have appointees to the board, they’re good people … but do they have too much else on their backs,” Sen. Papen told Capitol Report New Mexico last week. “And how can you read all the papers and keep up to snuff if you serve on umpteen boards?”

But like so many other people in the state, the NMFA controversy had SIC members shaking their heads Tuesday afternoon.

“The whole thing, nothing makes sense,” Frank said.