January 6, 2022

Former Spaceport Authority financial officer takes on state officials in whistleblower suit

Land Rover MENA

Terminal hangar at the Spaceport America, taken during a Land Rover Discovery Sport photo shoot. Creative Commons

A former financial officer for the New Mexico Spaceport Authority filed a sweeping lawsuit this week against Gov. Michelle Lujan Grisham and 20 other state officials, alleging fraud and embezzlement, along with a variety of other accusations. 

Certified public accountant and former Chief Financial Officer for the Spaceport Authority Zach DeGregorio, filed the suit on Monday and claims that high ranking state officials, including the governor, the state attorney general and the state auditor, were all at least complicit in covering up financial crimes related to the operation and funding of the spaceport. 

In his legal complaint of more than 200 pages, DeGregorio, who is representing himself, painted a picture of a dysfunctional state organization led by state officials who allegedly defrauded taxpayers and tried to cover their tracks. According to DeGregorio’s claims, state officials not only worked together to cover up wrongdoing but also later retaliated against DeGregorio and in turn, allegedly violated the state’s Whistleblower Protection Act. 

“Contrary to the NM Whistleblower Protection Act, [DeGregorio] faced intense retaliation following his whistleblower complaints. [DeGregorio] was treated as a problem that needed to be silenced and removed,” DeGregorio wrote. “Government officials at the highest levels including the Governor, the Cabinet Secretary of Economic Development, the NM State Auditor, the NM Attorney General, and others conspired together and took actions to retaliate against [DeGregorio].”

A spokesperson for Lujan Grisham told NM Political Report that the office does not comment on pending litigation. 

DeGregorio alleged in his legal complaint that then-Spaceport Director Dan Hicks repeatedly violated both state law and internal policies. In June 2020, the state hired The McHard Firm, an independent auditing agency to investigate DeGregorio’s claims. The firm reportedly found that Hicks “was an extremely dysfunctional manager” who “at other times obviously attempting charm in what was described to us as ineffectual, inept, and also embarrassing to observers.”

But the agency also reported that it found that DeGregorio was complacent in Hicks’ actions.    

“Although we were engaged to investigate a complaint filed by Zach DeGregorio, involving allegations of wrongdoing on the part of Spaceport Director Daniel “Dan” Hicks, our investigation revealed that Mr. DeGregorio assisted, and in some cases planned, apparent violations of law and policy on behalf of Hicks,” the McHard report read.

DeGregorio, in his legal complaint, disputed not only McHard’s findings but the manner in which the firm was hired. He wrote in his complaint that New Mexico Economic Development Secretary Alicia Keyes selected the external firm instead of the state’s Risk Management Division as a way to skew the findings. 

“Alicia Keyes selected The McHard Firm who had a significant economic incentive to deliver the investigation report that Alicia Keyes wanted,” DeGrigorio wrote. 

He also alleges that The McHard Firm investigation was “fraudulently procured” by the state by splitting up contracts to avoid an official bidding process for an auditing agency. 

Further, DeGregorio wrote that the McHard report “contained false criminal allegations” against him. 

“The report also reaches the absurd conclusion that [DeGregorio] was colluding with Daniel Hicks, the same person he was blowing the whistle against,” DeGregorio wrote. 

According to DeGregorio’s account of events, he was forced to resign in June 2020 after Keyes allegedly threatened him with termination, but wrote that he continued to speak with investigators because he “wanted to do the right thing and continue to help if he could.” 

As part of the suit, DeGregorio is seeking financial compensation because he “found himself jobless during a global pandemic and economic recession.” 

He also alleges that state officials launched a “smear campaign” that forced him to “explain in job interviews that he was not a criminal, and the false negative news stories about him were based on retaliation.” One of the many exhibits DeGregorio submitted was an email from a potential employer who wrote, “Unfortunately we can’t proceed with your candidacy at this time. A quick Google search led me to the reality of the situation at the Spaceport and the report issued on the subject in November.”

DeGregorio is asking the court to award him with more than $1 million to cover both personal and punitive damages, medical expenses and attorney fees.