In April, five employees of the state agency that processes key federal benefits to the poor made explosive testimonies in court—that their bosses instructed them to doctor emergency food aid applications to hurt the very people they’re supposed to help. The following month, four more Human Services Department employees added their voices to the allegations. Then, three top state officials were called to the stand and pleaded the Fifth, refusing to answer nearly 100 total questions about their role in the scandal. Previously: Top ten stories of 2016: 10-6; #5: NM Dems buck national trend, retake House; #4: Demesia Padilla resigns; #3: AG clears final behavioral health providers; #2: State budget situation worsens
“In my opinion, we’re cheating those families,” Angela Dominguez, one of the HSD employees, said in her court testimony. The underlying question next became, why?
The state budget situation was the backdrop of so many other stories this year and will remain a large story that NM Political Report and others will continue to cover in 2017 and beyond. Due in large part to the state’s reliance on oil and gas revenues to fund the government, New Mexico earlier this year found itself facing a large budget deficit amid plummeting oil prices. The state constitution does not allow the state to run a deficit; every year, the Legislature must pass a balanced budget. Previously: Top ten stories of 2016: 10-6; #5: NM Dems buck national trend, retake House; #4: Demesia Padilla resigns; #3: AG clears final behavioral health providers
During the 30-day regular session, the state House passed a version of the budget worth $6.32 billion, which actually included $30 million in new money. But by the time the Senate began discussing the budget, the situation worsened and the state braced for a whopping $359 million less in revenue than projected.
Years after the state cut off Medicaid funding to 15 behavioral health providers, citing “credible allegations of fraud,” the Attorney General cleared all providers of the alleged fraud. AG Hector Balderas made finishing the investigation into the providers a key goal when he entered office in 2015. Previously: Top ten stories of 2016: 10-6; #5: NM Dems buck national trend, retake House; #4: Demesia Padilla resigns
In April, Balderas announced the investigation was complete, with no evidence of fraud in the final two companies. Balderas previously cleared ten providers in February, and had already cleared two others in 2015. The allegations of fraud came from a 2013 audit for the state Human Services Department by Boston-based Public Consulting Group.
A year and a half after a preliminary probe from the State Auditor’s office concluded that Demesia Padilla used her state position to benefit her former private client, the Taxation and Revenue Department secretary resigned from office this month after nearly six years on the job. The revelations of an ongoing investigation by Attorney General Hector Balderas revealed far more potential misconduct from Padilla. Previously: Top ten stories of 2016: 10-6; #5: NM Dems buck national trend, retake House
First, TRD employees interviewed corroborated previous reports and evidence that Padilla, as head of the department that taxes New Mexicans, did insert herself into the audit of a company she previously did accounting work for. But a search warrant affidavit filed by Attorney General Special Agent Ed Griego revealed that Padilla may have also embezzled money from the client, Harold’s Grading and Trucking—more than $25,000 in all. Padilla told investigators that this money, which was transferred directly to her personal banking account between 2011 and 2013, was owed to her by Harold’s Trucking from previous work.