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Blood in the Water

There must be blood in the water because the sharks are most definitely starting to circle closer and closer:

A records clerk at New Mexico State University is suing past and present state officials and a couple of controversial financial firms in a class-action suit to recapture money lost in questionable investments by the state Educational Retirement Board.

The suit, filed by Donna Hill of Las Cruces, seeks to win back money for 95,000 beneficiaries of the state educators’ pension fund.

Hill, in an e-mail Tuesday, referred all questions to one of her lawyers, Jonathan Cuneo of Washington, D.C.

This suit appears to be identical to another suit that has been filed based on the questionable management of funds by the State Investment Council (SIC). Actually, calling the investment practices questionable is probably a bit too kind. Heck, calling them “investments” is in itself a bit of a misnomer:

The tab for bad investments the state made with Chicago-based Vanderbilt Capital just got worse — to the tune of at least another $65 million.

The Legislative Finance Committee is now estimating the state lost $155 million in a series of highly leveraged mortgage investments with Vanderbilt, up from earlier estimates of $90 million.

On Tuesday, the Senate Finance Committee was told by a private attorney whose client is suing to reclaim the losses that the red ink on the investments could go as high as $200 million.

Legislators were not happy .

“We’ve got a budget crisis, an ethics crisis and an investment crisis,” said Sen. Cisco McSorley, an Albuquerque Democrat and chairman of the Senate Judiciary Committee. “I don’t know if we can deal with all three in a 30-day session.”

The concern was bipartisan. 

While this news was breaking, our fearless Governor Richardson, Chairman of the SIC, was addressing the Greater Albuquerque Chamber of Commerce (GACC) on his plans to raise taxes by $200 million – just a little more than the amount of taxpayer money the SIC “lost” under the administration’s watch. 

Now, for those who might be tempted to argue that the Governor was simply derelict in his duties when it came to oversight of the SIC investment practice, consider this latest finding from an independent third party:

An outside review of the State Investment Council, commissioned after a string of scandals, recommends significantly curtailing the governor’s power over the SIC. 

Scandal after scandal is bound to hurt those seeking office in 2010 with deep ties to the administration. After all, how much more can they expect the public to tolerate in the current economy?

On the negative side, said Larry Waldman, senior research scientist at UNM’s Business and Economic Research, “The local situation is terrible. Job growth is the lowest it has been since at least World War II. It’s worse than most people thought it would be.” He said New Mexico’s economy probably won’t show signs of recovery until at least the second quarter of this year. 

 Hmm, not exactly the time most rationale people would think to promote regressive taxes, but then again, it’s not like this administration has ever really been concerned about the needs of everyday New Mexicans.