State auditor recommends Sunland Park takeover

ALBUQUERQUE, N.M. (AP) - State auditor Hector Balderas is recommending the state takeover some of the financial operations of the troubled border town of Sunland Park.

A spokesman for Balderas says the auditor presented his findings to the city on Monday following an initial audit of the town, which has been racked by allegations of widespread fraud and abuse of authority by public officials.

The findings also revealed certain criminal violations related to the fraudulent misappropriation of public money. Based on the findings, Balderas recommended that the Secretary of the Department of Finance and Administration (DFA) suspend officials of City management who are identified by the findings.

“I’m deeply troubled by the severity of the audit’s findings, and I strongly recommend that the Secretary of Finance and Administration take aggressive action to restore the confidence of the City’s citizens in its financial operations,” Balderas said.

Balderas and a host of state, local and federal investigators began in-depth probes of the town just before the March elections, when then-Mayor Pro Tem Daniel Salinas and other city officials were accused of trying to force his opponent out of the race with a secretly recorded video of him getting a topless lap dance. Salinas and others have since been arrested on numerous other charges alleging extortion, fraud, bribery and kickbacks, among other things.

Certain findings of the special audit include:

The special audit confirmed the fraudulent misappropriation of public funds from the City’s Border Crossing Fund by former Mayor Pro-Tem Daniel Salinas. The audit’s findings show the City expended $42,161.35 from the restricted Border Crossing Fund as a result of fraudulent invoices submitted by EnviroSystems Management Consultants, Inc. (EMC) and the Diaz Consulting Firm. The money was used to pay for prostitutes for Salinas and the City’s former Public Information Officer, Arturo Alba, during a trip to Mexico. Additionally, the funds were used to pay the costs of a campaign video for Salinas. It was also used to pay a private investigator who filmed a video used to extort Salinas’ opponent in the Mayoral election;

The City violated the Procurement Code by hiring Frank Coppler as City Attorney without following a competitive sealed bid process. The City has paid Coppler $481,378 in legal fees;

• The City violated competitive sealed bid requirements of the Procurement Code in its award of a $2,400,000 contract to EMC. The money used was from the Border Crossing Fund;
• The City violated state law in fiscal year 2010 by exceeding its approved budgeted expenditures for the Joint Utility Fund in the amount of $769,882;
• Former City Manager Aguilera and former Mayor Pro-Tem Salinas were responsible for reducing customers’ utility billings and accounts in violation of the state law and the New Mexico Constitution. One bill was reduced from $767.00 to $195.80. Auditors found no evidence that the City Manager reduced the bills based on criteria approved by the City Council; and
• In July 2010, the City Council also forgave approximately $200,000 in utility bills for residential customers in violation of the Anti-Donation Clause and state law.

The Associated Press contributed to this story.