Two-Year Investigation By Feds Results in Indictments (Dems in NM)

The arrests Friday of state Treasurer Robert Vigil and former Treasurer Michael Montoya on extortion charges "marks the beginning, certainly not the end," of the investigation, U.S. Attorney David C. Iglesias said.

Vigil and Montoya were indicted by a federal grand jury on two counts each of extorting more than $687,000 from an investment adviser in exchange for contract work from the Treasurer's Office.

An FBI affidavit for searches conducted Friday at the Treasurer's Office and the homes of Vigil and Montoya alleges an even larger corruption scheme involving hundreds of thousands more dollars.

Iglesias said the purpose of the searches was to look for evidence to support possible additional charges.

"We're interested in tracking down every possible trail of public corruption," the prosecutor said at a news conference. "This indictment marks the beginning, certainly not the end."

He also said, "New Mexico deserves to have elected officials run their offices with integrity and without the corrosive stain of corruption or allegations of private enrichment. Public funds should never be used as private ATM machines."

Vigil and Montoya were arrested Friday morning at their homes following a two-year federal investigation dubbed "Midas Touch."

They were taken to the FBI office in Albuquerque for fingerprinting and other processing, then to the federal courthouse.

Vigil and Montoya, shackled with ankle irons and handcuffs attached to waist chains, appeared Friday afternoon before U.S. Magistrate W. Daniel Schneider.

Both answered "yes" when asked whether they had read the indictments and understood the charges. Schneider released the men on their own recognizance.

Vigil and Montoya were scheduled to enter pleas at an arraignment Monday morning.

After the hearing Friday, Vigil said he would plead not guilty to the charges and would continue to serve as treasurer.

Montoya left the federal courthouse without speaking to reporters. He couldn't be reached later for comment.

David Romero, general counsel for the Treasurer's Office, represented Vigil at the hearing Friday and said the charges weren't unexpected.

"A year and a half ago, Mr. Vigil fired several employees, one for making counterfeit bills and another for illegally using government equipment," Romero said. "They threatened to go to authorities with the same accusations that you hear today."

He said Vigil wasn't given a chance to present his side of the story to investigators.

"We hope to convince a judge and jury that this is nothing more than two employees who are angry with him," Romero said.

The Treasurer's Office, with yellow crime-scene tape draped across its parking lot, was closed Friday. It was scheduled to be open Monday.

Vigil planned to return to work at the Treasurer's Office once released from custody, Romero said.

Iglesias said federal officials hadn't discussed seeking court-imposed restrictions on Vigil's job duties.

Vigil and Montoya, both Democrats, have long been associated in state government.

Montoya, of Los Lunas, served as treasurer from 1995 through 2002. Vigil, of Ribera near Las Vegas, served as deputy treasurer under Montoya and succeeded him as treasurer in 2003. Vigil is also a former state auditor and unsuccessful candidate for governor.

During their government careers, each had been repeatedly accused of misconduct, although never charged with a criminal offense.

The indictments allege Montoya, while treasurer, extorted $632,625 from an investment adviser for the Treasurer's Office. Vigil is accused of extorting $54,500 from the same adviser after succeeding Montoya.

Each could be jailed for up to 40 years if convicted on all counts, Iglesias said.

One witness in the case, unidentified by federal authorities, has pleaded guilty, and another unidentified witness was scheduled to plead guilty.

Vigil and Montoya aren't accused of stealing any of the billions of public dollars that flow through the Treasurer's Office. The FBI affidavit for the searches Friday alleges Montoya's wife, Samantha Sais-Montoya, took part in the criminal activity. Iglesias declined to say whether she would also be indicted. She couldn't be reached for comment.

Iglesias said the investigation is focused on the actions of public officials, not private parties. "Obviously, we reserve our right to prosecute other people," he said.

Assisted by six accountants from the state Taxation and Revenue Department, federal authorities are still trying to figure out what Vigil and Montoya did with all the alleged kickback money.

"We're doing what they said in Watergate; we're following the money," Iglesias said.

In court Friday afternoon, Vigil wore a light blue dress shirt and dress pants, while Montoya was in blue jeans and a gray polo shirt.

Vigil appeared calm and spoke with his attorney. Montoya didn't have an attorney.

Assistant U.S. Attorney Jonathon M. Gerson told the federal magistrate that the evidence in the case included FBI audio and video tapes of a payment to Vigil.

Gerson said evidence against Montoya included millions of dollars in wire transfers.

Schneider limited Vigil's travel to the I-25 corridor between Las Vegas, N.M., and Albuquerque. Montoya's travels were limited to the I-25 corridor between Los Lunas and Albuquerque.

He ordered Montoya to surrender his passport. Pretrial services recommended drug testing and counseling for Montoya, as well as a court order that he not use drugs or alcohol.

Between 35 and 50 FBI and Taxation and Revenue agents searched the Treasurer's Office and seized 30 to 40 boxes, according to an FBI spokesman.

Vigil and Montoya have been the subject of allegations in the past but have consistently denied wrongdoing.

A State Police investigation based on a 1999 audit of the Auditor's Office, while headed by Vigil, found "every indication that strong patterns of public corruption existed." No charges were ever brought.

State Police seized records and interviewed employees at the Treasurer's Office in 2000 when Montoya was treasurer and Vigil was deputy treasurer.

Police were investigating a possible link between money given to Montoya's congressional campaign in 2000 and possible embezzlement by his brother.

State Police referred the case to the FBI for investigation into possible violations of federal campaign finance laws, but the probe was ultimately dropped. At the time, Montoya's attorney called it a politically motivated smear campaign.

As state auditor in 1992, Vigil was investigated by the state Attorney General's Office for allegations of bid-rigging, bribery and kickbacks. Two accountants accused him of trying to extort political contributions in return for state contracts.

The criminal investigation by then-Attorney General Tom Udall into Vigil's fundraising was dropped after several months for lack of evidence.

Vigil and Udall also went head to head in a civil lawsuit over how Vigil handed out contracts to private accountants to audit government agencies.

An attorney general's opinion found his methods violated state laws, and a District Court judge limited Vigil's discretion.

In 1992, Vigil was the state auditor and hired Montoya as head of the department's Medicaid Fraud Unit.

A year later, the Legislature transferred the unit to the Attorney General's Office. At the time, a Senate leader said the transfer took place because lawmakers were told of an FBI investigation at the unit. No charges were ever filed.

Saturday, September 17, 2005

Vigil Expected Back in Office After Court Date

By David Miles

Journal Capitol Bureau

SANTA FE— State Treasurer Robert Vigil is due in federal court Monday morning to be arraigned on extortion charges, but he apparently intends to quickly be back in his state office to oversee more than $4 billion in public investments.

"I know Mr. Vigil, and he will come back to work immediately," Dave Romero Jr., general counsel for the treasurer's office, said Friday. "He's concerned about the office; he's concerned about the management of the office and the efficiency of the office."

Deputy State Treasurer Elaine Olah said she will oversee the office in Vigil's absence.

"I cannot speak to the allegations made against Treasurer Vigil except to say that we hope they are not true," Olah said in a written statement. "The legal system will take its course."

The state treasurer is responsible for receiving and disbursing state funds.

As of July 31, the treasurer oversaw an investment portfolio worth more than $4 billion.

The portfolio included $2.7 billion from the state's general fund that was not needed for immediate spending. Such money is typically invested in short-term investments.
The portfolio included more than $1 billion that the treasurer invests on behalf of local governments.

The Office of the Treasurer closed for business Friday; an office news release said it would reopen Monday.

Romero said he would provide assistance to Olah while she runs the office and said it would continue to operate normally.
The state Attorney General's Office on Friday was researching whether Vigil could continue to serve as treasurer while facing criminal charges and was looking into the procedure for filling a vacancy in the treasurer position. The post is an elected office, independent of the governor.

The state constitution says the governor has the authority to appoint someone to fill a vacancy in any state office other than lieutenant governor or a legislative post.

Gov. Bill Richardson on Friday declined to comment on the Vigil case other than saying through a spokesman that "these are very serious charges."

U.S. Attorney David Iglesias on Friday said he would not seek any court-imposed restrictions on Vigil's job duties.

"He's still the duly elected treasurer," Iglesias said in Albuquerque.

House Minority Leader Ted Hobbs, R-Albuquerque, said Vigil should be placed on administrative leave while criminal charges are pending.

"He shouldn't have an official capacity until the investigation is complete," Hobbs said.

Rep. Ray Begaye, D-Shiprock, said Vigil should be placed on administrative leave. Begaye said he would consider sponsoring a resolution to impeach Vigil when legislators convene in January for a 30-day session.

The evidence against Vigil and constituent support for impeachment would determine whether he would sponsor such a resolution, Begaye said.

"If I am pressured from the general public to do so, then I'll do it," Begaye said.

Earlier this year, Begaye co-sponsored a resolution to impeach state Public Regulation Commissioner E. Shirley Baca following Baca's misdemeanor drug charges.

A House committee shelved the impeachment proposal, and prosecutors later dismissed the charges against Baca.

House Speaker Ben Lujan, D-Santa Fe, said it's too early to comment on Vigil's charges or any action to take against him.

"I think it would be premature to jump at something without knowing," Lujan said.

The state constitution says all state officers and district court judges are subject to impeachment by state lawmakers for "crimes, misdemeanors and malfeasance in office."

The House of Representatives may impeach state officials with a majority of elected members. A two-thirds majority of elected state senators is needed to convict an official of impeachment charges.

The constitution prohibits impeached state officials from exercising any official powers or duties until they are acquitted by the Senate.

Journal investigative reporter Thomas J. Cole contributed to this report.

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