Investment boss quit before panel vote

SANTA FE (KRQE) - The resignation of State Investment Officer Gary Bland comes close on the heels of a review of material handed over to federal investigators as part of a criminal investigation, according to a document obtained by KRQE News 13.

In the process of handing over records to federal investigators members of a State Investment Council subcommittee started to suspect something fishy.

On Tuesday the four members of the subcommittee drafted and signed a resolution meant for the full council chaired by Gov. Bill Richardson.

The resolution, signed by state Land Commissioner Patrick Lyons and SIC public members Andrew Davis, Peter Frank and Stephen Feinberg, spelled out four points asking the full State Investment Council to vote on:

• Expressing no-confidence in Bland.
• Restricting Bland from making any more decisions on how to invest state money.
• Asking the governor to look into whether Bland should be fired.
• Directing outside counsel to continue its investigation of Bland's dealing.

In his resignation letter to the governor Bland did not explain why he suddenly quit.

Bland, his office and some of its outside associates have been drawn into a federal investigation reported to be a nationwide probe into alleged pay-to-play schemes where kickbacks were paid to receive state investment business.

Two weeks ago investment advisor Saul Meyer of Aldus Equity pleaded guilty in New York to a kickback scheme involving pension funds there.

In his plea he also claimed he defrauded the state of New Mexico while advising the State Investment Council on placing its billions of dollars in state funds with investors.

Meyer said he was pressured by politically connected New Mexicans to use certain investment companies, but he didn't name names in his courtroom statement.

As part of his plea agreement Meyer is obligated to help federal authorities with the investigation in New Mexico. Federal officials here have neither commented on the case nor released of anyone implicated by Meyer.

News 13 contacted the governor's office for comment but has not heard back.  Richardson last year reappointed Bland to another term as the SIC executive.

Ongoing investigations have not produced any criminal charges in New Mexico. However a civil lawsuit filed by a former official of the Educational Retirement Board alleges political influence in a $90 million investment in subprime mortgages that was later written off as worthless.

The lawsuit names Bland as one of the defendants. He has denied any wrongdoing and called the lawsuit politically motivated.

A separate federal investigation into the state's relationship with a California investment adviser who contributed to Richardson campaign committees during his 2008 presidential campaign ended without indictments.  However the U.S. attorney for New Mexico issued a statement saying political influence had tainted the selection of the adviser.