Another scandal; another grand jury

ALBUQUERQUE (KRQE) - All that's left of New Mexico's Region III Housing Authority is one worker, one cubicle and a scandalous past that could lead to criminal charges.

The Associated Press reported Thursday that prosecutors from the state attorney general's office are ready to move on the case that involves a former state legislator from Clovis.

Witnesses have been subpoenaed to appear before a grand jury next month, The AP reported citing a confidential source.

Allegations of gross mismanagement and insider dealing surfaced after the regional agency in 2006 defaulted on state bonds sold in 2003 to buy and rehabilitate homes for sale to low-income buyers.

Instead million dollars are unaccounted for, and well-connected individuals with nearly six-figure incomes were living in authority housing rent-free.

The state bailed out the agency, and the State Investment Office investigated issuing a scathing report and referred its findings to the attorney general for possible prosecution.

"Low-income New Mexicans, this money was supposed to be a very tangible way to help them out," political reporter and blogger Heath Haussamen told KRQE News 13. "Instead it was spent on other things."

A lawsuit filed by the State Investment Council claims the former director of Region III, Vincent "Smiley" Gallegos, is responsible. It claims Gallegos, a former state representative, loaned his own company $300,000.

It was the investment council that bought the $5 million in bonds from the housing authority.

There have been other abuses too. Former Metropolitan Court Judge Theresa Gomez lived in a housing authority home rent-free for 20 months during a period where she admitted to fixing two parking tickets and cancelling an arrest warrant on Gallegos.

"It just speaks to the kind of activity we've seen so much from government in Santa Fe and elsewhere in the last few years that makes people believe that government isn't serving them," Haussamen said. "The whole thing just stinks."

The criminal investigation has been going on for more than two years.

One of the reasons it has taken so long is that documents important documents in the case have either been taken or destroyed.

Gallegos was a state representative from Clovis for 10 years ending in the mid-90s.