NMFA scandal: Campbell indicted by grand jury, Duff cleared UPDATE: Duff may sue
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Capitol Report New Mexico has learned the suspended chief operating officer at the New Mexico Finance Authority was cleared by a grand jury on criminal charges that he, in the words of the state securities division chief, “cooked the books” in a scandal alleging that bogus audits were produced at the authority, which have jeopardized the state’s bond ratings.
“The way I look at it is, it’s our job to get the facts and present them,” Securities Division Director Daniel Tanaka told Capitol Report New Mexico by phone on Friday afternoon (Sept. 21). “I think we did that … and I think we had compelling evidence. That being said, we will of course abide by the grand jury’s findings … and it should be pointed out that Greg Campbell has been indicted on 12 felony charges. I think that’s a big success.”
Originally, Campbell was also charged with conspiracy but those charges were dropped after the grand jury based in Santa Fe declined to indict Duff. “You can’t have a conspiracy of one,” Tanaka said.
We have reached out to Duff for comment. If he gets back to us, we’ll post his reaction. Update 9/22: Duff told Dan Boyd of the Albuquerque Journal that the case against him was a rush to judgment. “This thing, I think, was a very badly flawed prosecutorial effort based on misunderstandings and half-understandings,” the 70-year-old said, adding that he’s considering legal action against the state. “I’m a positive and optimistic guy and life will go,” Duff told the Journal. “But serious damage to my reputation occurred … The damage is never going to exactly go away.”
Duff and Campbell were arrested back on August 8 and booked in Santa Fe, accusing them of submitting a forged audit, misrepresenting financial statements and trying to cover up $40 million in losses.
Duff has been a longtime employee at the NMFA where he’s held a number of positions, including that of chief executive of the authority for a time. By all indications, Duff is now cleared of any and all criminal charges.
On the day Duff was arrested, the NMFA board put him on unpaid leave. It remains unclear if Duff will go back to the authority in any capacity. The NMFA board meets again next Friday (Sept. 28).
As for Campbell, he will be arraigned on the 12 charges “with a couple weeks, probably,” Tanaka said.
Tanaka said the grand jury’s decisions on Thursday regarding Duff and Campbell “puts an end ot the criminal case but that being said, we have other leads in other issues that we’re pursuing.”
The Securities Division intends to publish a report this fall to reveal just how and why the bogus audits were filed that caused Wall Street ratings agencies like Moody’s and Standard & Poor’s to consider downgrading the state’s ratings, which would cost taxpayers potential millions in higher interest rate payments.
In the wake of the scandal, a number of large municipal bonding projects across the state have been put on hold.
A representative from Moody’s told Capitol Report New Mexico earlier this summer that the agency may make a decision on a possible downgrade some time in October.
You can read the news release sent out by the state securities division here:
And here’s the 17-page indictment of Campbell: