A federal judge proposed the appointment of a special master to oversee food and medical assistance programs in the state, the most clear indication of the severity of the problems in the programs’ administration by the state.

The judges’ proposal is, in federal Magistrate Judge Carmen Garza’s words, “largely adopted from” the state Human Services Department’s remedy of a special master that will act as a monitor to bring the department into compliance with federal law.

This is a breaking news story and has been update. It may be updated further.

But the ruling makes clear that the special master will answer to the court and not HSD or the plaintiffs in the lawsuit, which include the New Mexico Center on Law and Poverty. The ruling gives the special master power to “petition the Court for remedy” if either HSD or the Center makes decisions that are “not consistent with the goals of compliance.”

HSD wanted a special master who would act as a consultant for the department and answer to Secretary Brent Earnest and top department officials.

“The special master will be accountable only to the Court and will not be supervised by Plaintiffs or the HSD Secretary,” the ruling reads. “The special master will be independent from Plaintiffs and HSD and will not be an employee of the State.”

This authority isn’t as expansive as the receivership the Center and plaintiffs asked for. In that case, the receiver would have authority on his or her own to make decisions that would bring HSD into compliance with federal law.

Federal District Court Judge Kenneth Gonzales and federal magistrate judge Carmen Garza make it clear that this type receivership is still on the table if problems at HSD aren’t progressing by January 2018, which is the month the special master’s contract will expire. At that time, the special master will make a recommendation to the court whether a receivership is warranted.

Per the ruling, both HSD and plaintiffs in the lawsuit will compromise on picking the special master within the next month. If they can’t agree in the next 45 days, a judge will select from a list of names submitted by both parties.

HSD will pay for the special master.

While the ruling ultimately agrees with HSD’s assertion that measures less extreme than a receivership hasn’t been exhausted, Sovereign Hager, an attorney with the Center, welcomed Garza’s ruling.

“Her opinion is very, very strong in terms of dealing with noncompliance and the ineffectiveness of HSD,” she said. “We feel pretty hopeful of where this is going.”

NM Political Report reached out to a spokesman for HSD Monday morning and will update this story if we hear back.

State Sen. Michael Padilla, D-Albuquerque, praised the ruling.

“I think this is a solid confirmation that Gov. [Susana] Martinez and her administration are completely out of touch with what is going on at the kitchen tables in New Mexico,” Padilla said in an interview.

Padilla added that it’s up to the administration to “improve in this area immediately.”

Contempt of court

Garza also recommended the department be held in contempt of court, writing that “it is apparent that HSD and its officials have not exhibited the leadership, oversight, or coordination necessary to implement the Court Orders.” HSD has been under court order for 26 years to bring its Medicaid and food aid processing into compliance with federal law.

She writes that the court appreciates that HSD now “now acknowledges” the need for “serious and fundamental changes in order for the [food stamp] and Medicaid programs in New Mexico to come into compliance with federal law.”

But Garza still contends that she is “troubled that is took over [30] hours of status conferences, over [500] pages of joint status reports submitted to the Court, three days of evidentiary hearings” and fraud allegations from HSD employees to convince the department “to discuss making these types of changes.”

In recommending the contempt finding, Garza writes that it is “appropriate to ensure” that HSD come into compliance with federal law.

The Center initially recommended the contempt of court finding but later dropped it after arguing that such a recommendation “would not likely coerce” HSD into compliance with federal law, according to Garza’s ruling.

Alleged falsification of applications

The ruling came after hearings regarding the alleged problems, which included widespread falsification of food benefits applications by workers throughout the state.

Employees alleged the falsification came at the behest of supervisors and other higher-ups in the department and was designed to make sure some applicants no longer qualified for emergency food benefits. Federal law says emergency applications must be processed within seven days; falsely adding the assets, the employees said, would lower the amount of overdue cases.

Federal Magistrate Judge Carmen Garza announced the ruling Friday afternoon, a little more than a week after the third in a string of evidentiary hearings in Albuquerque and Santa Fe.

NM Political Report was one of just two news outlets at a hearing in Las Cruces when HSD officials refused to answer questions about the allegations; the officials asserted their Fifth Amendment rights against self-incrimination nearly 100 times during that hearing.

This came after a hearing in Albuquerque where employees first publicly made the allegations on the falsification of food benefits applications.

Since that hearing, the State Auditor and HSD itself launched investigations. The U.S. Department of Agriculture, which is in charge of food benefits, later acknowledged a pending investigation.

Update (11:25 a.m.): This story was updated with more details on the ruling from the judges throughout the piece. Other small changes were made as well.

Update (2:15 p.m.): Added reaction from state Sen. Michael Padilla, D-Albuquerque. 

Correction: An earlier version of this story said judges appointed a special master. They in fact recommended the appointment.

Read the ruling and order below:

Doc. 730 Proposed Findings 2016-07-15 by New Mexico Political Report on Scribd

Proposed Order by New Mexico Political Report on Scribd