Ben Cloutier

Our coverage of Demesia Padilla’s alleged abuse of power

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Part of the search warrant that resulted in the resignation of Taxation and Revenue Department Secretary Demesia Padilla mentioned her alleged abuse of power in a case referred by the State Auditor. Here are the stories NM Political Report wrote about this from last year. Auditor finds possible abuse of power in Tax and Rev: Allegations revealed by the state Auditor found that (at the time) unnamed top officials in TRD could have given improper preferential treatment to a taxpayer in New Mexico. State Auditor Tim Keller referred the investigation to Attorney General Hector Balderas. A spokesman for TRD said the letter from Keller was political and, “We believe these are nothing more than unsubstantiated claims that are being driven by disgruntled former employees, who either work for the State Auditor or were fired for sexual harassment, and now they have an ax to grind.”
TRD secretary named in investigation: A letter to Gov. Susana Martinez from State Auditor Tim Keller revealed the allegations of abuse of power surrounded Taxation and Revenue Department Secretary Demesia Padilla.

Demesia Padilla

Documents: Search warrant on Demesia Padilla

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Read the search warrant that led to Tax and Revenue Department Secretary Demesia Padilla’s Thursday resignation:
Demesia Padilla Search Warrant by New Mexico Political Report on Scribd

News

Top Stories of 2015: Number 4; Tax and Rev Scandal

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I was walking out of the office late in July when I got a phone call from Justin Horwath, a reporter from The Santa Fe New Mexican with whom I’m a friend from his days at the Santa Fe Reporter. We hired his former roommate and co-worker Joey Peters to work at the same time as Justin joined The New Mexican. It was about one of Joey’s stories that he was calling about. I knew which one. Earlier that afternoon, we published a story where we reported “a leaked email from the state Taxation and Revenue Department last week was perhaps more transparent than the department intended.”
We are counting down the top ten stories through the end of the year with expanded recaps or personal recollections from the three members of the team.

Demesia Padilla

CPA: Padilla should have referred former client to other accountants

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Was it appropriate for the Secretary of the New Mexico Taxation and Revenue Department to get involved with the audit of a former client for whom she once did accounting work? Last week, NM Political Report wrote about how Demesia Padilla, the TRD secretary, wrote a letter asking her own department for lower tax penalties for Harold’s Trucking, a Bernalillo-based business. Before becoming a cabinet secretary in 2011, Padilla handled the business’s financials as a certified public accountant. Padilla’s agency was handling an audit of Harold’s Trucking and Padilla herself stepped in to help out the business. Padilla’s old CPA business had lost tax documents belonging to Harold’s Trucking, she wrote in the letter, and therefore the business shouldn’t be penalized for her mistake.

Demesia Padilla

Sec. Padilla tried to help former client with tax audit

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On Oct. 15, 2014, Kevin Sourisseau sent a message to his boss with the subject line “Harold’s Trucking Audit.”

As second and first in command of the state Taxation and Revenue Department’s audits, Sourisseau and his then-director Lizzy Vedamanikam were in charge of making sure individuals and businesses paid their share of taxes in New Mexico. Their boss, TRD Secretary Demesia Padilla, wanted to help Harold’s Grading & Trucking save money after the Bernalillo-based company faced an audit from their department. Before Gov. Susana Martinez named her head of the state agency in 2011, Padilla had done accounting work for the trucking company. In his email to Vedamanikam, Sourisseau wrote that the situation was a “difficult and uncomfortable issue.” Still, it didn’t seem like he had a reason for concern.

Ben Cloutier

Letter asked Guv to address concerns about TRD Secretary

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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.

New Mexico Taxation and Revenue Department

Complaint against Tax. Dept. lawyer adds details to scandal

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Newly released documents appear to show a top state Taxation and Revenue Department staffer was involved in alleged abuse of power that is subject to an ongoing probe. © New Mexico Political Report, 2015. Contact editor@nmpoliticalreport.com for info on republishing.  

In July, State Auditor General Counsel Sarita Nair filed an ethics complaint against Tax Department lead attorney Brad Odell with the Disciplinary Board of the Supreme Court of New Mexico, NM Political Report has learned. The Disciplinary Board opted not to take action against Odell, citing that it lacked sufficient evidence.

New Mexico Taxation and Revenue Department

‘IDIOTS’: TRD attorney criticized agency for botched redaction

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When New Mexico Political Report discovered and reported on a botched redaction from the state Taxation and Revenue Department this summer, the state responded with a threat. “You purposely manipulated the document in order to reveal taxpayer return information and thwart the purpose of the redaction,” tax department spokesman Ben Cloutier wrote to us in July. “You have published taxpayer return information despite the clear intent that it remain confidential. It is unlawful for any person other than the taxpayer to intentionally reveal to any other person the taxpayer’s return information.”

Yet internal emails show at least one current tax department attorney faulted his employer, and not New Mexico Political Report, for the mishap. “I have been telling the Department for years that we are not redacting documents properly,” tax department attorney Lewis Terr wrote in an email the same day we published the story.

Demesia Padilla

Tax dept. head wanted to aid former client during audit

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When the State Taxation and Revenue Department was in the process of auditing Bernalillo-based Harold’s Grading & Trucking, Secretary Demesia Padilla wanted to write an affidavit supporting tax deductions the company made in the past. This is according to an email recently released to New Mexico Political Report by the department as part of a public records request. Padilla is under investigation by the New Mexico Attorney General’s office for allegedly using her position to attempt to provide special treatment to a taxpayer for whom she previously did accounting work. State Auditor Tim Keller, whose office conducted a preliminary investigation into the matter, wouldn’t publicly identity the name of the taxpayer in question. However, a botched redaction from the tax department this summer revealed that it was Harold’s Trucking.

Albuquerque Journal

TRD plays blame game after releasing taxpayer name

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Before New Mexico Political Report recently reported on a botched redaction from the state Taxation and Revenue Department, we reached out to its spokesman multiple times. It took Taxation Department spokesman Ben Cloutier more than four hours to respond. And when he did, he responded with a legal threat. “Mr. Peters,” he begins in an email sent Thursday late afternoon:
Although taxpayer return information was redacted by the department to provide confidentiality, you purposely manipulated the document (i.e., you were able to get around the redaction and enhance the imagery) in order to reveal taxpayer return information and thwart the purpose of the redaction. Furthermore, you have published taxpayer return information despite the clear intent that it remain confidential.