SANTA FE, N.M. (AP) — The New Mexico Supreme Court has rejected a settlement challenge in a lawsuit over an alleged “pay-to-play” scheme dating back to the administration of Democratic Gov. Bill Richardson.
Former state Educational Retirement Board Investment Chief Frank Foy and his late wife Suzanne B. Foy filed the lawsuit in 2008, claiming the state lost about $90 million in bad investment deals with Vanderbilt Capital Advisors and other Wall Street investment firms after top-ranking officials steered the deals to the firms in exchange for kickbacks, The Santa Fe New Mexican reported.
The lawsuit claims the board lost $40 million and the State Investment Council lost $50 million in the scheme.
Richardson repeatedly denied his administration was involved in the schemes. Neither he nor any member of his administration were charged with a crime.
District Court Judge Louis McDonald accepted the state’s deal with Chicago-based Vanderbilt Capital Advisors in 2017, approving a $24.25 million settlement after about a decade of litigation, officials said. Foy and his attorney Victor Marshall opposed the agreement, arguing the state could receive far more money through lawsuits Foy filed under the Fraud Against Taxpayers Act.
Marshall also argued the settlement process itself involved conflicts of interest as current Attorney General Hector Balderas and former state Attorney General Gary King had political ties to Richardson’s administration. He also accused King of having ties to the Day Pitney law firm, which was hired to recover the money in the settlement process.
The court ruled against Foy and Marshall appealed the ruling to the state Court of Appeals, which upheld the lower court’s ruling in July. Marshall then filed a petition to the state Supreme Court, which denied the petition earlier this month.
Foy can now appeal the case the U.S. Supreme Court. Marshall said he was not able to comment.
“As the Court of Appeals ruled in this case, two different attorneys general successfully represented the State of New Mexico for over a decade, and we are pleased to have resolved this matter on behalf of the public with the supervisions and approval of the courts,” Balderas’ spokesman Matt Baca said Tuesday.
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