Audit finds massive misspending

ALBUQUERQUE (KRQE) - Board members and employees of the Albuquerque-region New Mexico Housing Authority stole $5 million from the poor and gave to themselves, an audit reported released Wednesday revealed.

State Auditor Hector Balderas told KRQE News 13 he'd never seen anything like it.

"This train wreck could have been prevented," Balderas said. The operations of a public agency that was supposed to help low-income New Mexicans find shelter instead operated as an elaborate scheme, he added.

It is the New Mexico Housing Authority's job is to locate and build low-income housing in the state. However the authority's Albuquerque-based Region III ran wild between 2005 and 2007, according to the audit.

"They misspent that $5 million on personal expenses, salaries, retirement, trips to Las Vegas Gucci handbags," Balderas said.

In addition to $2,000 briefcases and memberships in private clubs the audit identified one trip by Region III Executive Director Vincent "Smiley" Gallegos who had previously represented Clovis in the Legislature.

He was given per diem for travelling to Santa Fe for the legislative session in January 2006 where he stayed for 37 days and pocketed $4,200.

However Balderas said there were no receipts showing he stayed even one night, and Gallegos was never given permission to be in Santa Fe.

The activities went unchecked for years.

"Paying themselves for meetings that never occurred, trips that never occurred," Balderas said. "So it was a big spending spree for three years all under the justification that they were buying homes for the poor."

Now a state grand jury is investigating the operations of the Albuquerque office.

Balderas said the scheme was elaborate and well-thought-out.

"It was a three-year process," he said. "It was a very sophisticated system in which to pump money through what looked like legitimate expenses.

"But when you look a little further there was abuses at every level."

Balderas said he had a tough time even finding time cards for employees and that he believes many of the documents showing misspending were either lost or shredded.

Balderas wants lawmakers to make the housing authority a state agency, which would require greater scrutiny.