Inside a towering fortress on the grounds of the National …
Updated: Thursday, 05 May 2011, 1:03 PM MDT
Published : Thursday, 28 Apr 2011, 10:00 PM MDT
ALBUQUERQUE (KRQE) - Inside a towering fortress on the grounds of the National Hispanic Cultural Center, museum patrons will find both an artistic masterpiece and a government scandal involving hundreds of thousands of misspent taxpayer dollars.
Santa Fe artist Frederico Vigil spent nearly a decade creating a 4,000-square-foot fresco mural depicting centuries of Hispanic culture and history. But the fresco itself is not controversial. The money behind it is.
"There's a right way and a wrong way to spend taxpayer money," said Rick May, secretary of the New Mexico Department of Finance. "This project was the wrong way."
A Larry Barker investigation discovered almost half-a-million dollars in state tax money earmarked for Vigil's work of art was illegally diverted by a former high-ranking state official and inappropriately spent by a private foundation.
"This could be test case of how government is not supposed to work," May said.
State legislators funded the fresco project with $812,500 in appropriations. Because the fresco was to be part of a state museum -- the National Hispanic Cultural Center -- the state Department of Cultural Affairs was in charge of the money.
That's where the trouble began.
Instead of accounting for the money, former Cultural Affairs Secretary Stuart Ashman simply gave it away to the Hispanic Cultural Center Foundation, a private organization. The foundation is the fundraising arm of the Hispanic Cultural Center.
"This transaction ... was not by the book in any way shape and form," May said. "It was completely, completely the wrong way to use taxpayers' money."
Veronica Gonzales, current secretary of the cultural affairs department, agreed, saying she can find no records indicating the money was properly spent. In addition, she said the transfer of the $812,500 violated state law.
"This money should have been safeguarded through the Department of Cultural Affairs' oversight and accountability," Gonzales said.
But it wasn't.
And when the Hispanic Cultural Center Foundation got its hands on the pot of money, records obtained by News 13 show it went on a free-wheeling, unauthorized shopping spree.
Former New Mexico First Lady Clara Apodaca, president of the Hispanic Cultural Center Foundation, said she believes the money was properly spent.
However, no one in state government seemed to notice that the foundation was quietly siphoning off the fresco money and pouring thousands of state dollars into its own coffers. For example, the foundation helped itself to $162,500 and called it "administrative fees."
"(The $162,000) went for expenses we had for the fresco," Apodaca said. "We did a lot of lobbying. We did a lot of traveling. But I'm not sure it was all used for that because we actually also paid for a lot of programs."
Reminded that the state Legislature's appropriation was for the fresco, not for the foundation's programs, Apodaca said, "We thought under the contract we could use that."
May said the $162,500 was "absolutely not" a proper expenditure of a capital appropriation.
In another puzzling piece of accounting, the foundation claimed that $432,000 of the initial $812,500 appropriation went to Vigil, the fresco artist. But that was a deception. News 13's investigation found that Vigil only received $200,000 from state funds.
The rest of the money was paid to the artist well before the Legislature even appropriated the money. The origin of those funds is unclear. So instead of spending the state money on the fresco project, the foundation simply pocketed $200,000 of taxpayer money.
Finally, there's the $69,730 the foundation claimed it spent on a one-hour documentary about the fresco's creation, and the $9,000 it says it paid for a DVD about the fresco's grand opening.
A 13-minute DVD was completed, however, the one-hour documentary has yet to be seen.
"We haven't finished it," Apodaca said. "We have a script and then we have a lot of tapes, but that has not been completed."
The $812,500 was supposed to go for Vigil's artistic masterpiece only, not DVDs, a documentary, bogus compensation or questionable fees. Taken altogether, the foundation's financial misdeeds add up to nearly $500,000.
While Ashman -- the former DCA secretary -- lacked the authority to transfer the $812,500 outside state government, Apodaca claimed the arrangement was legitimate.
"We had a signed contract and that signed contract spelled out what we could spend it on," Apodaca said. "So that's what we did."
However, News 13 found that the so-called contract was a sham that appears to have been written before the Legislature authorized the appropriation.
Gonzales, the current DCA secretary, said the contract was "absolutely not" a legal contract, and it provided no safeguards to taxpayers.
Last year, questions began being raised about the foundation's use of state money. The Department of Cultural Affairs launched a review and, except for a few minor discrepancies, found the Hispanic Cultural Center Foundation was
in compliance with all laws and regulations.
It is unclear if the department conducted a shoddy review or tried to cover-up misdeeds.
"They were following directives, but they made mistakes also and they have to held accountable for that," Gonzales said.
Secretary May laid the blame for the flawed fresco funding squarely at the feet of Ashman.
"Once they went down that path of giving money directly to the foundation, then we lost all financial control," he said. "We lost all ability to ensure that the taxpayer money was being spent properly. The one person that had the responsibility to ensure that taxpayers' money was spent wisely in this case was the previous cabinet secretary for the Department of Cultural Affairs."
In a telephone interview, Ashman told News 13 that everything he did was proper. Beyond that, the former secretary said he had no comment.
But state legislators did comment, and they weren't happy.
"Somebody needs to be tried and go to jail," said state Senator Stuart Ingle, R-Portales. "That's not right."
Said state Senator Tim Jennings, D-Roswell, "We appropriated the money to the Department of Cultural Affairs, they spent that money and there are no receipts for it. To me, it borders on criminal."
While independent auditors are now investigating the fresco fiasco, Apodaca said that the foundation will return any funds the state deems inappropriate.
"But we'll have to raise it," she said, adding that the foundation doesn't currently have the money to return.
Secretary May said Governor Susana Martinez wants answers.
"The governor's direction to both Secretary Gonzales and myself were very, very simple," May said. " 'Get to the bottom of this. If taxpayers money was improperly spent, get it back and don't let it happen on our watch.' "