A report examining possible “pay-to-play” over state pension investments is drawing sharp reactions and a call for an investigation into whether donations by investment firms broke state laws.

The International Business Times and the money-in-politics watchdog nonprofit Maplight released an investigative report earlier this week on donations given directly to Susana Martinez’s campaign and to organizations that backed Martinez and later received state investment money from a public pension fund.

A spokesman for Martinez essentially called the report clickbait and said “these accusations are shameless and dishonest” in a statement to NM Political Report.

The spokesman, Joseph Cueto, continued, “It’s a shame that the dark-money liberal political group behind this is getting their way with clicks and smear headlines without a shred of evidence. The Governor remains open to further strengthening of our disclosure laws – despite Democrats’ previously killing her proposals to do just that.”

IBT is a for-profit online news organization based in New York City. The non-profit Maplight  lists foundations as well as individual funders who contributed more than $5,000 in the previous five fiscal years.

Andrew Perez of Maplight, one of the three reporters with a byline on the original story, was unfazed by the attacks from Martinez.

“I think the idea that a 3,000 word story about pensions can be considered clickbait is just remarkable and hilarious,” Perez told NM Political Report in a phone interview Thursday.

He also said the response led him to “wonder if they read the piece.”

Perez said said the governor’s office and some of the firms named were given “ample time” to respond the story, though none did before publication.

“They didn’t, and now they’re mad at us,” he said.

New Mexico’s lax laws

As for the story itself, Perez outlined the importance of the findings.

“It shows how pay-to-play rules that have been put in place following massive scandals are just failing to catch a lot of the money that’s being put into the political system on the state level,” he said.

New Mexico’s law require donors who have bid on government contracts to fill out a form with that agency acknowledging any donations to public officials over the previous two years.

Earlier this week, the Santa Fe New Mexican reported on how the state passed the reform laws after then-State Treasurer Robert Vigil was convicted of attempted extortion—and how those same reform laws were still lacking.

One loophole to avoid the forms is to donate to organizations with ties to elected officials. These could include Political Action Committees (PACs) or outside party organizations. In Martinez’s case, some donations went to the Republican State Leadership Committee, which then donated to Martinez-related PACs. Or the firms donated to the Republican Governors Association, which Martinez briefly chaired, then spent money on gubernatorial elections including New Mexico’s.

The New Mexican reported that this isn’t necessary in many cases—since some agencies don’t even require contractors to submit the documents.

Perez said the direct donations to Martinez were among the most important things they reported.

Under federal Securities and Exchange Commission rules, firms that donate to a governor must wait two years before earning money from fees from state investments.

In pensions, workers and the employer—in this case the state—contribute money to a pension fund. That money is then invested by public officials to provide enough money for the employees once they retire. State pension funds, including New Mexico’s, often total in the billions of dollars. And that can mean big money for the firms entrusted to invest the money.

One direct donation Perez mentioned was from EnerVest, a private equity firm. That group donated $5,200 to Martinez’s campaign and another $10,000 to Advance New Mexico, a PAC run by Martinez loyalists. These were just part of $61,000 steered to Martinez-linked groups by EnerVest’s top executive, John Walker.

The New Mexico Education Retirement Board later $37.5 million to the firm in March 2016.

A donation by BP Capital, the energy investment fund of billionaire and natural gas evangelist T. Boone Pickens, also caught investigators’ attention. Pickens gave $10,400 to Martinez’s 2014 campaign. Just 18 months later, the NMERB approved $30 million to go to BP Capital, before the required two-year cooling off period ended.

BP Capital told IBT/Maplight that they waited until the cooling-off period lapsed before charging any fees.

“That’s the first time that I’ve heard of something like that,” Perez said of BP Capital not charging fees before the cooling-off period ended. “If that’s what truly happened, it does offer a type of roadmap to get around the rule. It definitely does raise questions to me.”

In all, investment firms that invested $757 million in state pension funds donated more than $1.2 million to Martinez and PACs with close ties to her.

The report also raised questions about the type  of investments the NMERB was involved in—and if they paid off for New Mexico. Specifically “alternative investments,” which include hedge funds, which typically have large fees.

“I think there are questions nationwide about how investment decisions are arrived at in these state retirement systems,” Perez said. He covered problems with pension investments in New Jersey and Rhode Island as well.

“I know that some legislators there have been raising questions about the fees paid to Wall Street. And it’s a question that a lot of other states have asked over the last few years,” he said. “There’s some limited transparency in that regard.”

Call for feds, AG to investigate

Friday, IBT/Maplight followed up and reported that both U.S. Sen. Tom Udall and State Land Commissioner Aubrey Dunn wanted SEC to expand enforcement to look at third-party groups like the RGA.

“We have to make sure that the campaign finance rules that are still on the books are updated to reflect these new and dangerous circumstances — to ensure that no one is able to circumvent these laws by using super PACs, dark money groups or other campaign spending vehicles,” Udall said according to IBT/Maplight.

Dunn, who is running for Congress, agreed. Dunn has a seat on the State Investment Council alongside Martinez—and has frequently clashed with his fellow Republican. Recently, Dunn and State Treasurer Tim Eichenberg refused to sign an updated ethics code which they said would make the SIC less transparent.

The state-level questions prompted state representative Bill McCamley, D-Mesilla, to ask Attorney General Hector Balderas to investigate.

“I am concerned, especially, given that these investments represent hard working New Mexicans’ public funds,” McCamley wrote in a letter to Balderas. The full letter is embedded below.

He reiterated his concerns in a Facebook video with Democratic Party of New Mexico chairman Richard Ellenberg Thursday.

“We have these disclosure laws here in New Mexico that if you’re going to do business in the state and you do contribute to a person who controls that business, you have to disclose that,” McCamley said.

He wanted to find out if the actions described in the IBT/Maplight story violated the state Governmental Conduct, the state’s law regarding disclosure of contributions by state contractors or other state and federal laws.

A spokesman for Attorney General Hector Balderas confirmed they received the letter.

James Hallinan told NM Political Report in an email that the matter is under review.

Martinez’s office criticized McCamley for accepting donations from the solar industry, saying he did so and “voted on tax breaks and other bills to benefit the industry.”

The executive director of NMERB, meanwhile, said nothing improper was done in regards to state investments.

“Laws passed following New Mexico’s prior ‘pay-to-play’ issues focus on placement agents, not campaign contributions,” NMERB Executive Director Jan Goodwin wrote. “Not only is the NMERB in compliance with state law regarding placement agents, but the policy exceeds the law’s standards.”

The board’s chair also responded.

“The Board’s role is to ensure sustainability of our pension benefits for our members,” NMERB Chair Mary Lou Cameron said. “Our staff’s responsibility is to recommend the best investments to us, while informing us of any political contributions made by investment managers.”