A state audit of the municipal government of Sunland Park, New Mexico, has uncovered not only sloppy accounting practices but widespread violations of New Mexico state law and city spending regulations. While some former officials implicated in wrongdoing have already been charged in related criminal cases, the audit casts a larger net that could land other individuals in and out of Sunland Park city government in a big heap of trouble. And according to State Auditor Hector Balderas, the buck should stop with the border city’s fractious city council.

“There are violations of law related to budget and inventory that fall on the authority of the governing body, which is the city council,” Balderas said. The state official told Frontera NorteSur that the New Mexico Department of Finance and Administration (DFA), which took charge of Sunland Park’s municipal finances after suspending two city officials on May 14, is now looking into the roles of the different council members in allowing one of New Mexico’s most impoverished towns to run up deficits, misuse budgets and illegally expend funds, including moneys allegedly spent on sexual entertainment at a U.S-Mexico border legislators’ conference held last fall in Saltillo, Mexico. The Saltillo finding has been turned over to the FBI, Balderas said.

As the Land of Enchantment celebrates its centennial anniversary as a U.S. state, Sunland Park now has the dubious claim of fame to being the only known municipality in New Mexico history where the state stepped in, suspended officials and seized at least partial control of local government functions.

Pressed if Sunland Park’s financial scandals were the result of professional ignorance or willful law-breaking, Balderas said indications of both problems were evident to him. “There are clear signs of incompetence and negligence,” Balderas said, “but there are also signs of conspiracy and people working together to violate the law,”

In a report released this week, Balderas and his staff zeroed in on 27 separate findings related to regular budgets, special funds, travel policies, and the Open Meetings Act.

The audit contains information that had not been previously publicly reported. For example, the report found that eight Sunland Park Police Department computers and three standalone hard drives were not disposed of in a proper way, possibly exposing confidential information to identity theft schemes. According to Balderas, the State Motor Vehicle Division is now looking into the matter.

Balderas’ team was unable to verify the status of many other assets presumably owned by the city, since Sunland Park officials “failed to provide” investigators with a “complete certified listing of capital assets” for fiscal years 2010 and 2011, according to the report. Information was missing for the city’s solid waste, water, wastewater and motor vehicle fund divisions, the report said.

And the audit took the Sunland Park city government to task for hiring its attorney, prominent Santa Fe lawyer Frank Coppler, in a non-competitive manner that allegedly violated the Procurement Code. The report stated that the city paid Coppler $481,378 in fees for fiscal years 2010, 2011 and 2012.

Coppler was unavailable for comment, and his office said the lawyer would send a statement via e-mail on Tuesday, May 15. However, Frontera NorteSur still had not received the response as the evening publication deadline approached .

A major area of concern for Balderas’ team of investigators is the $12 million-plus Border Crossing Fund, established with a donation by Sunland Park Racetrack and Casino owner Stan Fulton, for the development of a new crossing between the New Mexico town and the northwestern edge of Ciudad Juarez. Balderas contended that the fund served as a “personal slush fund” for some Sunland Park officials, though certain legitimate expenditures were also documented, he was quick to add. Balderas confirmed that the remaining portion of the fund is under the control of the DFA,

New Mexico’s state auditor said he would like to see some of the money misspent in Sunland Park paid back but to the taxpayers, but did not know how likely the prospect for reimbursements was due to the city’s shaky financial situation.

Balderas recalled that he had handled tough situations, ranging from the embezzlement case in the Jemez Mountain Public School District to belligerent Public Regulation Commission officials, but had “never seen the level of abuse” and “the penetration of criminals” as in Sunland Park. The shenanigans, he said, amounted to organized crime. “Even the mob has more respect than to use tax dollars,” Balderas asserted.

In addition to Governor Susana Martinez and the DFA, which has already intervened in the border town brouhaha, Balderas’ report is being sent to New Mexico State Attorney General Gary King, the Third Judicial District, the New Mexico State Police, the Tax Fraud Investigations Division of the Taxation and Revenue Department, the FBI, the U.S. Attorney for the District of New Mexico and the Legislative Finance Committee headed by border-area Democrat John Arthur Smith of Deming.

While Balderas’ staff found plenty of grist for law enforcement authorities and lawmakers to mull over, the state auditor emphasized that the probe is far from over. “We’ve spent thousands of hours on this report and we’re beginning a second audit,” Balderas said.

In an election year, the thickening smoke from the Sunland Park scandal could drift far and wide.

Meantime, political uncertainties continue to grip the town of about 14,000 people. Twice within the past week, the city council has failed to name a new mayor. The seat has stayed vacant for months, and the winner of last March’s election, Daniel Salinas, remains jailed in Dona Ana County on charges of extortion, bribery and fraud stemming from many of the situations outlined in New Mexico State Auditor Balderas’ report.

The former mayor-elect and ex-city councilor has entered not-guilty pleas to the numerous felony counts against him.

Last month, city councilors elected a young newcomer to the political scene as mayor. But 24-year-old New Mexico State University graduate Javier Perea resigned his post only days later after New Mexico State Attorney General King advised the city government that Perea’s election might have occurred in violation of the Open Meetings Act. The next city council meeting is scheduled for Friday, May 18, at 6 p.m. in the courtyard outside municipal government offices. Like other council sessions in recent months, the next meeting promises to be anything but dull.


Kent Paterson is the editor of Frontera NorteSur: on-line, U.S.-Mexico border news sponsored by the Center for Latin American and Border Studies at New Mexico State University-Las Cruces, New Mexico.

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