Shortly after state Taxation and Revenue Department Secretary Demesia Padilla was publicly implicated in an investigation of wrongdoing, the governor’s chief of staff received a letter.
Those who sent the letter, which Susana Martinez Chief of Staff Keith Gardner received on July 14, claimed to be employees “who have witnessed the decline of this department because of the unprofessional, unethical, and overall inept leadership of Demesia Padilla.”
“Since the governor is on the record that her staff are expected to hold to the highest ethical and professional standards, we hope that you’ll look into what we share in this letter, and that you’ll do something about it before more TRD staff, out of frustration, seek out the [Attorney General], the state auditor and the press as a means to address these serious concerns,” the letter reads.
NM Political Report obtained the letter through a public records request with the governor’s office.
In July, State Auditor Tim Keller announced a preliminary investigation contracted by his office concluded that Padilla may have interfered with the tax audit of a former client for whom she did accounting work before becoming the TRD cabinet secretary. The client, later revealed to be Bernalillo-based Harold’s Grading & Trucking, has denied knowing about or asking for any special treatment.
A spokesman for Padilla, at the time of the announcement about the investigation, said the allegations were from disgruntled former workers.
Public documents later revealed that Padilla wanted to at the very least write an affidavit for the audit supporting tax deductions that Harold’s Trucking had made in the past. The preliminary investigation, conducted by Albuquerque-based McHard Accounting Consulting, also found that Padilla’s actions may have led to retaliation against employees and loss of state revenue.
Keller’s office then referred the matter to Attorney General Hector Balderas, who is currently conducting further investigation.
The letter claims that Padilla pressured her staff “to overlook audit findings and to suppress tax investigations of her friends and clients.”
“She has denied this allegation, but the allegation is true,” the letter reads.
The letter also states that Padilla attempted to demote the department’s former director of Audit and Compliance Division after she “made it very clear to Secretary Padilla that she was pressing our staff to commit illegal acts over her expectations for special audit treatment for her friends and clients.”
That former division director, Lizzy Vedamanikam, would not comment about the matter with NM Political Report other than confirming that discussions about a tax audit of a former client of Padilla took place during her time at TRD.
Vedamanikam now works as director of the Administrative Services Division of the Department of Finance & Administration.
The letter also accuses Padilla of giving a no-bid, $21,000 contract to “one of her business partners, Juan Esquivel, to allegedly do an audit of the partner management unit at [the Motor Vehicle Division].” NM Political Report could not find any TRD contracts with Esquivel listed on the New Mexico Sunshine Portal nor could locate contact information for Esquivel.
According to the letter, Esquivel submitted a short written report that “had no value to the department.”
“The alleged audit may have been a cover for whatever real reason Secretary Padilla had for wanting to make this large payments of public funds to Mr. Esquivel,” the letter reads.
State Auditor spokeswoman Justine Freeman tells NM Political Report that her office is looking into the allegation to determine “whether procurement rules were followed.” Freeman adds that the letter to Gardner “reiterates serious allegations of abuse of power by the Secretary.”
The letter also accuses Padilla of playing favorites and abusing “even the highest-performing staff.”
“She isn’t respected by TRD staff, isn’t trusted, has damaged the morale in the department and is generally regarded as the most unqualified and incompetent TRD secretary in recent memory,” the letter reads.
The author or authors of the letter write that they “would all like to sign this letter since we feel strongly about the topic.”
“But we need our jobs, and none of us wants to complete the remainder of our careers under whistleblower protection,” the letter reads. “So we’re writing to you confidentially, but the information in this letter would be easy to investigate and verify if the executive chooses to look into the questions around Secretary Padilla’s leadership of TRD.”
Neither TRD spokesman Ben Cloutier, governor’s office spokesman Chris Sanchez or Padilla herself returned inquiries sent through various mediums Monday seeking comment. But more than a week after her office received the letter, Gov. Susana Martinez told the Santa Fe New Mexican that she had not discussed the allegations of preferential treatment with Padilla nor had launched an investigation of her own. Martinez also told the newspaper than she had no reason to lack confidence in TRD.
Earlier this month, a report by The Santa Fe New Mexican said the FBI was looking into the possibility of audits by TRD that were retaliatory in nature.
Read the letter below: