July 30, 2015

Botched redaction reveals company in probe of alleged preferential treatment

A leaked email from the state Taxation and Revenue Department last week was perhaps more transparent than the department intended.

TRD Email 1

Update: The Taxation and Revenue Department responded. Here is the response. This story continues as originally written below.

State Taxation and Revenue Secretary Demesia Padilla is currently under investigation by the state Attorney General’s Office for allegedly providing or attempting special tax treatment to a former client for whom she served as a certified public accountant.

State Auditor Tim Keller’s office conducted a preliminary investigation into the matter last spring after being tipped off on an anonymous fraud hotline.

Last week, in an effort to curb the narrative that Padilla conducted any wrongdoing, the Taxation Department released an email to various media outlets.

The email, sent on Oct. 15, 2014 from department Audit and Compliance Division Deputy Director Kevin Sourisseau, reads, “the audit has not received any special consideration from the audit staff.”

Sourisseau, who now works as the State Auditor’s director of special investigations, also writes, “no changes have been made to the audit.” On the receiving end of the message is Lizzy Vedamanikam, the Taxation Department’s Administrative Services Division director.

Cloutier told media outlets that the email involved the same matter Keller’s office looked into.

From the Santa Fe New Mexican:

The name of the taxpayer being audited was redacted, but Cloutier said it is the same case the state auditor investigated.

The Taxation Department attempted to redact the name of the taxpayer that received preferential treatment. But a view of the email on a bright screen or a simple brightening of the image on a computer reveals the words “Harold’s Trucking Audit” as the email’s subject. “Harold’s Trucking” appears once again in the body of the email.

A Google search of “Harold’s Trucking New Mexico” leads to Harold’s Grading & Trucking in Bernalillo. A search of the corporate records at the Secretary of State’s website shows only one company with “Harold’s” and “Trucking” in the name.

New Mexico Political Report spoke to the company’s owner, Harold Dominguez, in a brief phone interview this morning.

Dominguez confirmed that Padilla served as his CPA “a long time ago,” though he denied that she ever gave his business preferential treatment.

“No, not us,” Dominguez said. “Not Harold’s Grading & Trucking.”

Dominguez added that he’d have to look at his records to say exactly when Padilla served as his CPA. As for the ongoing investigation into Padilla, Dominguez said, “I’ve seen that on the news, but that’s it.”

According to public documents, Dominguez’ business received an assessment from the Taxation Department on Oct. 30, just over two weeks after Sourisseau wrote the email.

Courtesy Harold's Grading and Trucking

Courtesy Harold’s Grading and Trucking

Harold’s Grading & Trucking formally protested the assessment in late January, but lost the protest last month. According to a document written by a Taxation Department hearing officer, Antoniette Dominguez handled the protest on behalf of Harold’s Grading & Trucking.

The hearing officer in the case denied Harold’s Grading & Trucking’s protest because it was not filed in time.

Releasing confidential taxpayer information to the public is against the law without the taxpayer’s consent.

It would be deeply troubling if the Taxation and Revenue Department released confidential information about any taxpayer,” State Auditor spokeswoman Justine Freeman wrote in a statement to New Mexico Political Report. “The Office of the State Auditor has been careful not to release information regarding the identity of the taxpayer that is mentioned in the independent investigation of the Secretary of Taxation and Revenue.”

She did not comment on whether or not Harold’s Grading & Trucking was the client that allegedly received preferential treatment.

Freeman also pointed to a section in Sourisseau’s Oct. 15 email to Vedamanikam that reads, “Thank you for your support with this difficult and uncomfortable issue.”

The email that was selectively released by Taxation and Revenue appears to confirm a pattern of staff being placed in difficult and uncomfortable situations by the alleged attempts to pressure employees to give preferential treatment,” Freeman wrote. “The independent investigation of Taxation and Revenue, which includes audio recordings, concerns events that occurred before and after the date of the email.”

New Mexico Political Report reached out to the Taxation Department multiple times but hasn’t received a comment about the revelation. We’ll update this post if we do.

NMPolitics.net published a copy of the email in full earlier today.

Read brightened and zoomed copies of the email below:

TRD email 1 by New Mexico Political Report

TRD email 3 by New Mexico Political Report