December 27, 2015

Top Stories of 2015: Number 4; Tax and Rev Scandal

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I was walking out of the office late in July when I got a phone call from Justin Horwath, a reporter from The Santa Fe New Mexican with whom I’m a friend from his days at the Santa Fe Reporter. We hired his former roommate and co-worker Joey Peters to work at the same time as Justin joined The New Mexican.

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It was about one of Joey’s stories that he was calling about. I knew which one.

Earlier that afternoon, we published a story where we reported “a leaked email from the state Taxation and Revenue Department last week was perhaps more transparent than the department intended.”

We are counting down the top ten stories through the end of the year with expanded recaps or personal recollections from the three members of the team. Tune in each morning to see what the next story is.

Previous: Stories 10-6. Number 5.

In the email, which was sent to media throughout the state and first published by NMPolitics.net in an apparent effort to rebut claims of wrongdoing, the redaction of a taxpayer’s name was done in a very sloppy manner. So sloppy that if you viewed it on a bright screen, you could easily see the named “Harold’s Trucking” underneath.

It was the mysterious taxpayer that media outlets had been looking for since mid-July.

Some backstory may be needed.

Keller’s office received an anonymous tip of attempted abuse of power at TRD earlier this year. So he started an investigation into the allegations. When he had something to report, he referred the investigation to the state Attorney General’s Office. The investigation named Secretary Demesia Padilla and said that it may have resulted in retaliation against TRD employees.

The New Mexican actually first reported on the email on July 22, the same day it was sent to media. When we looked at it more closely a week later, we saw the name and confirmed the information. Then, as TRD did with the State Auditor, they went on the attack against us.

Cloutier told The New Mexican, “The fact that a leftwing blogger manipulated the public record to out the small businessman underscores how this has become a pathetic example of manufactured political theater led by the most partisan state auditor in New Mexico history.”

That’s what Justin was calling about.

From his story:[BQ]Matthew Reichbach, editor of The New Mexico Political Report, said in an interview that the name of Dominguez’s business could be seen without manipulating or even printing the email. He said he’s never seen a case in which public officials failed to properly redact a document “and then blamed the person who wrote about it.”

The Albuquerque Journal, which did not call us for comment, said Cloutier “blasted the New Mexico Political Report for divulging the name.”

In other words, they were playing the blame game. And threatening legal action.

The attacks didn’t dissuade us from continuing to break stories on the TRD situation. We found more information on the allegations from a complaint against TRD’s top lawyer. Through that and other reporting, we were able to report that Padilla did in fact attempt to insert herself into the audit on behalf of her former client. The department said Padilla inserted herself into the audit to protect the rights of Harold Dominguez, the owner of the company.

While many certified public accountants declined to comment on Padilla’s actions, Albuquerque-based James Hamill said that Padilla should have referred Dominguez to another CPA to avoid any appearances of a conflict of interest.

But my mind still goes back to leaving the office and taking that phone call from Justin. I knew from reporting in the past that there would be some sort of attempt to “get back” at us for the reporting, but I was also sure we had not done anything wrong.

A couple of months later, I found out that at least one attorney in TRD agreed. In an email we received after a public records request, Lewis Terr wrote, “I have been telling the Department for years that we are not redacting documents properly.”

Terr is an attorney with the department and was writing to his brother, satirist Jim Terr.

He finished his email, by saying, “IDIOTS.”