Records from Lt. Governor Diane Denish’s Office reveal glaring discrepancies that indicate false vouchers and payments for services that could not have been rendered as of the date the payments were approved. New Mexico Watchdog reviewed all the voucher packets for the contract public information officer hired by Denish in 2004. This worker, Lauran Cowdrey, was revealed in previous reports by this site and Heath Haussamen and Steve Terrell of The Santa Fe New Mexican to have performed duties for Denish’s political campaign committee and the John Kerry for President 2004 campaign. Joshua Rosen, Denish’s current chief of staff, has admitted that the expenditure of public funds for those purposes was improper. Denish’s campaign has refunded the state treasury the amounts paid to Cowdrey for work on those days.

NEW MEXICO CRIMINAL STATUTES ON FALSE VOUCHERS AND PAYMENT FOR SERVICES NOT RENDERED

A closer inspection of the invoices, time sheets and payment vouchers for Cowdrey’s work reveals what appears to be evidence of false vouchers, a criminal offense under New Mexico law. New Mexico Statutes Section 30-23-3 provides:

Making or permitting false public voucher consists of knowingly, intentionally or willfully making, causing to be made or permitting to be made, a false material statement or forged signature upon any public voucher, or invoice supporting a public voucher, with intent that the voucher or invoice shall be relied upon for the expenditure of public money.
Whoever commits making or permitting false public voucher is guilty of a fourth degree felony.

Another statute that may be implicated by the irregularities in Denish’s records is New Mexico Statutes Section 30-23-2, which provides:

Paying or receiving public money for services not rendered consists of knowingly making or receiving payment or causing payment to be made from public funds where such payment purports to be for wages, salary or remuneration for personal services which have not in fact been rendered.
Nothing in this section shall be construed to prevent the payment of public funds where such payments are intended to cover lawful remuneration to public officers or public employees for vacation periods or absences from employment because of sickness, or for other lawfully authorized purposes.
Whoever commits paying or receiving public money for services not rendered is guilty of a fourth degree felony.

APPARENTLY FALSE CERTIFICATIONS REGARDING WORK “RECEIVED AND ACCEPTED”

The intent of the persons preparing, submitting and approving the invoices and payment vouchers cannot be discerned simply from the face of the document. As for what is found on the documents themselves, of the ten invoices and accompanying vouchers for Cowdrey’s services produced for inspection by the Lt. Governor’s Office, seven reveal one or more of the following irregularities:
1. The date work was certified as “received and accepted” by Denish’s Deputy Chief of Staff precedes the date of the invoice itself.
2. The date work was certified as “received and accepted” by Denish’s Deputy Chief of Staff precedes the date of items of work recorded on the time sheet underlying the invoice.
3. The date work was certified on the State of New Mexico Payment Voucher as “received or rendered” precedes either the date of the invoice for the work or the date of items of work recorded on the time sheet underlying the invoice, or both.

One example of these irregularities is Cowdrey’s June 15, 2004, invoice. This invoice was addressed to Sonya Carrasco-Trujillo, then Denish’s Deputy Chief of Staff, who was later promoted to Chief of Staff:

Although the invoice was dated June 15, the certification that the work was “received and accepted” is dated June 14, 2004. (The certification stamp on this invoice was blurred. A complete reproduction of the same certification from another invoice follows below). The certification was signed by Carrasco-Trujillo. New Mexico Watchdog has verified her signature from other documents.

Furthermore, the invoice was for work from June 7, through June 18, 2004. Both the date of Cowdrey’s invoice and the date of Carrasco-Trujillo’s certification that the work was “received and accepted” precede by to 2 to 3 days work billed on the invoice. In other words, the work on the invoice was not rendered as of the date it was certified as having been “received and accepted.” Additionally, the payment voucher to process the check for payment of this invoice was prepared on June 17, 2004, a day before the final day of work covered by the invoice.

Another example of these irregularities is Cowdrey’s August 13, 2004, invoice, again addressed to Denish’s Deputy Chief of Staff:

The certification signed by Denish’s chief of staff reads: “CERTIFICATION: The Lt. Governor’s office hereby certifies that the items listed on this request for payment were received and accepted”

This certification was signed by Carrasco-Trujillo and dated August 11, 2004. That is two days earlier than the date of the invoice itself. The time sheet underlying the invoice covers work through August 13, and charges for full days of work on both August 12 and August 13. According to this record, Denish’s deputy chief of staff certified as “received and accepted” two days of work that could not have been rendered as of the date of the certification.

In this instance, the payment voucher itself was both prepared and approved before the date of the invoice. The approval of Cowdrey’s invoice for work through August 13 was approved and signed by a Samantha Johnson and dated August 12, 2004:

This means that the payment voucher cannot be true. It states that the “goods and services were received or rendered,” but (1) the certification is signed and dated before the date of the invoice, and (2) the work that was charged for August 13 had not been “received or rendered” when the payment voucher was approved.

Carrasco-Trujillo herself approved an earlier voucher for Cowdrey on June 3, 2004, even though Cowdrey’s invoice was dated June 4, 2004, and included a request for payment for a full day’s work on June 4, 2004.

These irregularities, to one degree or another, can be found in invoices spanning 6 months. Cowdrey’s November 24, 2004, invoice covers work from November 15, 2004 through November 24, 2004. Below is a reproduction of the final entry on the time sheet for that invoice.

Though the invoice seeks payment for work on November 24, 2004, one of the instances when Cowdrey was being paid with public funds to work on a Christmas card project for Denish’s political committee, Carrasco-Trujillo certified that the “items listed on this request for payment were received and accepted” as of November 23, 2004. The date of the invoice itself is November 24, 2004.

Another example shows Cowdrey’s invoice being time stamped prior to the date of the invoice itself:

The invoice is dated August 27, 2004, and covers work through that date. The invoice, though, is time-stamped “AUG 26 ’04 AM 10:10″.

IRREGULARITIES NOT DETECTED IN ANNUAL AUDITS

New Mexico Watchdog reviewed the 2004 and 2005 audits of the Lt. Governor’s Office on file at the State Auditor’s office in Santa Fe. The State Auditor at the time was Domingo Martinez.The audit was conducted by the Santa Fe accounting firm of Zlotnick, Laws & Sandoval P.C.

These were not forensic audits of the operations of the Lt. Governor’s office, requiring a detailed inspection of all documents supporting all payments and charges. The focus was only on the financial statements prepared by the Lt. Governor’s office. The auditor at most “examined on a test basis,” according to the final audit report, “evidence supporting disclosures in the financial statement.” The final audits further stated, “[P]roviding an opinion on compliance [with laws, regulations, contracts and grant agreements] was not an objective of our audit and, accordingly we do not express such an opinion.” The audit only sought “reasonable assurance about whether the [Lt. Governor's] Office financial statements are free of material misstatement.”

Richard Sandoval, the accounting firm partner who led the audit, did not return a phone message inquiring why the irregularities in the invoices and vouchers for Cowdrey’s work were not detected and reported in the course of the audit.

New Mexico Watchdog hand-delivered to the office of the current State Auditor, Hector Balderas, copies of the Cowdrey voucher packets, with the irregularities highlighted. We asked him to answer the following questions:
(1) how it was that the state audit of the 2004 and 2005 operations of the Lt. Governor’s Office missed these irregularities;
(2) whether these irregularities indicate that payments were made that should not have been made; and
(3) whether these irregularities may be evidence of potential violation of the state statute against false vouchers, NMSA Sec. 30-23-3 or paying or receiving public money for services not rendered, NMSA Sec. 30-23-2

State Auditor Balderas has not responded to our inquiries.

New Mexico Watchdog contacted Carrasco-Trujillo at the New Mexico Department of Public Safety, where she holds the position of Deputy General Counsel. We left a voice mail her inviting her to explain or comment on the irregularities we have reported here. She has not returned our call.

New Mexico Watchdog has been unable to locate Cowdrey.

Lastly, New Mexico Watchdog contacted Denish’s current Chief of Staff, Joshua Rosen, and also asked him to offer an explanation for or comment upon the irregularities we have reported here. We informed him that we would print verbatim any explanation or comment he wanted to make. He has not offered any explanation or comment.

STATUTE OF LIMITATIONS

Before New Mexico Watchdog began looking into how the funds given to New Mexico under the 2003 Jobs Growth and Tax Relief Reconciliation Act, there had been no attempt to provide any public accounting of how these funds were spent. We are the first to look in detail at how the funds given to the Lt. Governor’s Office were spent. In the ensuing five years, the pertinent statute of limitations for prosecution of false vouchers and payment for services not rendered, N.M.S.A. Sec. 30-1-8.B appears to have run, except for the very last invoices and vouchers from November 2004. Prosecutions for violation of those statutes must be brought with five years of commission of the offense.

The admission by Denish’s office that public funds were used to pay for work on her personal political committee’s project and the Kerry for President campaign implicates another New Mexico criminal statute. New Mexico Statute Sec 10-16-3.1 prohibits public officials, including the Lt. Governor and members of her staff, from “violating the officer’s or employee’s duty to not use state property, or allow its use, for other than authorized purposes.” The Government Conduct Act, under which this prohibition falls, does not set forth a statute of limitations. The civil penalties include censure, removal from office and monetary fines of $250 per infraction. Section 10-16-17 also makes violation of this prohibition a misdemeanor. The statute of limitations for prosecution of misdemeanors, though, is even shorter than that for fourth degree felonies, and has already expired.

This investigation highlights another instance of inadequate oversight of government operations by official public watchdogs, particularly the State Auditor. In the absence of a forensic audit, irregularities such as those reported here will not come to light in a timely manner. That no forensic audit has been conducted on the operations of the Lt. Governor’s office is not really the fault of the State Auditor, however. That office has never been given adequate funding and staffing to conduct forensic audits on either a regular or random basis of all state agencies and offices.

WHAT HAPPENED TO THE REST OF THE MONEY?

Governor Richardson gave Lt. Governor Denish $225,000 to spend on “various projects.” This money came from the federal funds given to New Mexico under the 2003 Jobs Growth and Tax Relief Reconciliation Act. Our earlier reporting on this, based upon an internal report of the Department of Finance and Administration, was confirmed by the 2004 and 2005 audits. They showed a balance of $225,000 being held on account in the general funds and marked as fund 177. Denish’s office drew down against this balance as they spent money in 2004 and 2005 on a public opinion survey, website design, radio advertisements, public relations and the contract services of public information officers.

The 2004 and 2005 audits of the Lt. Governor’s Office show that from this pool of $225,000 of federal funds, the Lt. Governor’s office spent $68,593 in 2004 and $38,130 in 2005. The 2005 audit notes that this left a balance of $118,277, with the note that “this grant will be spent in future years.” The latest record made available to New Mexico Watchdog on how these funds were spent was dated January 18, 2005. The records on how the remaining funds were spent have not been produced for public inspection. New Mexico Watchdog will follow up with a further request to inspect ALL the remaining documents concerning or containing information about how the $225,000 given to the Lt. Governor’s Office under the 2003 Jobs Growth and Tax Relief Reconciliation Act was spent.