NMFA keeps executives on leave over fake audit

SANTA FE, N.M. (AP) - The New Mexico Finance Authority is keeping two top executives on administrative leave during investigations over a fake financial audit that has led to arrests by state securities regulators.

The authority's governing board on Monday met in a private executive session for more than an hour to discuss what to do about CEO Rick May and Chief Operating Officer John Duff, but no action was taken later during a public meeting to change their suspension from last month.

May is on leave while receiving his $150,000 salary. He sent a letter to the board last week threatening possible legal action "to preserve and protect my longstanding reputation for honesty and integrity."

One option for the board is to fire May and Duff. However, May wrote the board that it would be "arbitrary and unjustified" to make a final decision on his employment until investigations are completed into the falsified audit.

Duff, who is on leave without pay, and former controller Greg Campbell were arrested for fraud and other charges last month involving the fake financial statements and accounting changes that securities regulators said made the authority's revenues look stronger.

After the board meeting, chairwoman Nann Winter said she couldn't comment on May and Duff because it's a pending personnel matter.

Board member Tom Clifford said in an interview that the board wasn't ready to make a decision on the executives' employment.

"We're basically just trying to look around a little more carefully and get more input," he said after the meeting.

Clifford acknowledged that May's letter and the threat of a possible lawsuit was "some of the information people are trying to consider."

There's been no indication of potential wrongdoing by May, who has blamed Campbell for falsifying a financial report to make it appear it had been audited by an outside accounting firm as required by state law.

Campbell has acknowledged that he faked the financial statements earlier this year and has said he didn't steal any money. It's a violation of state law to distribute false or misrepresented financial statements to potential investors.

A special audit is under way to determine what went wrong and if any finance authority money is missing. State Auditor Hector Balderas has said an initial report from an accounting firm should be ready next month.

The Legislature also has contracted for an independent review of the authority to determine whether changes should be made.

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