ICYMI: State Auditor’s Ethics Called into Question Again

Posted On August 25, 2015

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State Auditor’s Ethics Called into Question Again

Albuquerque-NM – Today we read another troubling story about State Auditor Tim Keller that raises serious questions about his ethics and exposes the gap between what Keller says and what Keller does.

In the past few weeks, it has been reported that Keller abused his elected position as a state senator to direct taxpayer-dollars to pork projects for his clients, used a private email address for official business and abused his power to redesign the state seal on taxpayer-funded letterhead into a campaign logo. Now we learn that Keller hid the fact that he had a gaming tribe as a client at the same time he was using his official position in a way that benefited that client’s efforts to secure a lease to operate a racino at the state fairgrounds — all while audaciously accusing his political opponents of doing the very thing he was secretly doing.

“Tim Keller’s hypocrisy knows no bounds and he is demonstrating to the media and New Mexico voters that they cannot trust his word.,” said Pat Garrett, spokesman for the Republican Party of New Mexico.


Docs may reveal potential Keller conflict on state fair lease
By Heath Haussamen
August 24, 2015




As a state senator, Tim Keller repeatedly criticized the Martinez Administration’s awarding of a 25-year lease to The Downs at Albuquerque to operate a casino and racetrack at the state fair grounds.

Keller, a Democrat who is now the state auditor, accused Republican Gov. Susana Martinez of pay-to-play related to The Downs deal.

If documents provided to NMPolitics.net by a former colleague of Keller are to be believed, Keller may have had his own potential conflict of interest related to the state fair lease that he never disclosed to the public – and even denied existed.

N.M. state legislators aren’t paid and many have other jobs. While he was a senator, Keller worked for Blue Stone Strategy Group, a California company that advises tribal communities on issues including economic development and governance.

Keller has said more than once that Laguna Pueblo, whose Laguna Development Corp. was the losing bidder for the state fair contract, was not a client.

“They’re not a client of mine, nor do any of my clients have any even remotely vested interest in the whole thing,” Keller told journalist Rob Nikolewski in November 2011.

What Keller has said

Here’s a transcript of the question journalist Rob Nikolewski asked Keller in 2011 and Keller’s response:

Nikolewski: “The state Republican Party accused you of being, uh, having Laguna Pueblo as a client of yours. What’s the story there? Is there a story?”

Keller: “You know they did. I feel like they were really scraping. I don’t know why a political party would actually get involved in something like this anyway. But they’re not a client of mine, nor do any of my clients have any even remotely vested interest in the whole thing. Who does care about this is my constituents. You know, I represent the area of the fairgrounds and I have now gone against two governors on this issue, asking for a redesign of the state fairgrounds and some investment there. And, you know, both times the Downs seemed to have, has had a lot more sway on the Fourth Floor. And so, for me, I’ve been consistent on this issue throughout it. You know, I felt that was a real stretch, sort of a cheap shot. I’m not sure what really drove them to be so concerned, that they’d have to do that.”

Watch the full interview here.

But Laguna Pueblo and the pueblo’s organization responsible for water, sewer, garbage and IT services – Laguna Utility Authority – were both clients of Blue Stone while Keller was a principal in the company, according to documents obtained by NMPolitics.net.

If the documents are accurate, that would mean Keller’s employer was working for entities tied to Laguna Development Corp. while Keller was criticizing the process that led to the Downs at Albuquerque beating Laguna Development Corp. for the lease.

And it would mean Keller was keeping that potential conflict secret while hammering Martinez for a bidding process he said was tainted and deserving of an investigation by the attorney general.

Keller has referred questions about specific clients to Blue Stone, whose lawyer called the company’s client work “confidential and proprietary.” That attorney, Matthew A. Berliner of California, didn’t directly answer a question about whether Laguna Pueblo and Laguna Utility Authority were clients.

Berliner did say Blue Stone “never had any dealings with anyone relating to casino bids or operations in New Mexico.”

“And Blue Stone never had any conflicts or dealings with any legislative matters for any of its clients, as that is not the area of Blue Stone’s expertise or work,” Berliner said.

Laguna Pueblo owns Laguna Utility Authority and Laguna Development Corp., the organization that bid unsuccessfully for the state fair lease. While some Indian gaming operations are run directly by tribal counsels, Laguna’s operation is “extremely autonomous” – making its own decisions and only reporting to Laguna Pueblo’s tribal counsel twice a year, said Skip Sayre, chief of sales and marketing for Laguna Development Corp.

Laguna Development Corp. was not a Blue Stone client, Sayre said. None of the documents NMPolitics.net obtained indicate otherwise.

A spokeswoman in the State Auditor’s Office, Justine Freeman, said Keller “always drew a bright line between his work with tribes and his duties as a legislator.”

The documents

Nikishna Polequaptewa, a Hopi activist and former senior strategist for Blue Stone, provided NMPolitics.net with the documents that raise questions about Keller’s statements that Laguna Pueblo was not a client.

When asked if Keller was involved in Blue Stone’s work for Laguna Pueblo and Laguna Utility Authority, Polequaptewa said, “That would make sense, because, to my knowledge, he handled all the projects in New Mexico” during the time in question.

Polequaptewa, who managed Blue Stone’s IT needs and marketing from April to November of 2014, has his own legal troubles. Blue Stone is suing Polequaptewa, accusing him in federal court of improperly taking company trade secrets, customer information and other data when he left the company. The FBI has investigated, according to the lawsuit.

Polequaptewa denies the allegations. In a counterclaim, he accuses Keller and some tribal officials of being “improperly paid” by Blue Stone to use their public positions to win contracts for the company. Keller, who is not a party to the lawsuit, has called the allegations “baseless.”

Polequaptewa told NMPolitics.net he has “never seen any quid pro quo” involving Keller, such as appropriating state capital outlay dollars to a Blue Stone client. But he shared an internal company PowerPoint presentation on Blue Stone’s work that lists “lawyer/lobbyists” as contacts for a number of New Mexico tribes, including Laguna Pueblo.

“The lobbyist’s job is to influence votes in the Legislature,” Polequaptewa said. “… The only contact we, Blue Stone, had in New Mexico was a politician – and that was Tim Keller.”

Keller was a state senator from 2009 until he became state auditor on Jan. 1 of this year. He stopped working for Blue Stone in September 2014, according to his Facebook page.

Polequaptewa said Keller created the PowerPoint for a Blue Stone conference held in San Diego last year. Keller was responsible for developing the materials for the training, he said.

As evidence, Polequaptewa provided NMPolitics.net with an April 25, 2014 email sent from the address tkeller@bluestonestrategy.com to Polequaptewa’s personal email address. The email’s attachments include the PowerPoint and a “tentative agenda” for the San Diego meeting. The email is signed “Tim Keller / Blue Stone Strategy Group.”

Blue Stone’s full statement

Here’s the full Blue Stone Strategy Group response to NMPolitics.net’s questions about the documents Polequaptewa provided. The statement came from Blue Stone’s attorney, Matthew A. Berliner of California:

“It appears that the document referred to in your email was one of Blue Stone’s firm wide annual internal training programs that had real and hypothetical examples. These were internal confidential documents of Blue Stone, provided illegally to you (and likely others) by our former employee who was only at the firm for 9 months. In late 2014, Blue Stone filed suit against Mr. Polequaptewa in Federal Court in the Central District of California for, among other things, violations of the Computer Fraud and Abuse Act, Misappropriation of Trade Secrets and Breach of Contract. We aware that state and Federal authorities are investigating the former employee for violations of law related to his illegal conduct as well. I suggest that your review the pleadings and papers filed in the Federal lawsuit, which are publically available.

“Mr. Keller was a Principal at Blue Stone which was a title only, he was not an owner and was paid a flat annual salary with zero incentive and no variable comp. Mr. Keller was hired for his strong financial related expertise – Harvard MBA, and finance degree etc. Mr. Keller provided internal training from time to time and project support as assigned. He typically had two to three people above him that he reported to including the CEO, President, a VP and a few junior staff below that he managed.

“All of Blue Stone’s client work is confidential and proprietary to Blue Stone and its clients. However, Blue Stone never had any dealings with anyone relating to casino bids or operations in New Mexico. And Blue Stone never had any conflicts or dealings with any legislative matters for any of its clients, as that is not the area of Blue Stone’s expertise or work. Blue Stone also complies with all Federal and state laws regarding the operation of its business.”

The tentative agenda states that “Tim K” would be presenting on “how Blue Stone solves client challenges.” Among the bullet points to be discussed under that item was “Laguna – Utility Strategy.”

Berliner, Blue Stone’s attorney, said that document “had real and hypothetical examples.” He didn’t say whether “Laguna – Utility Strategy” was real or hypothetical.

Another document Polequaptewa provided lists Laguna entities as Blue Stone clients. The company worked with Laguna Pueblo in 2010 on “strategic planning facilitation,” according to the list of Blue Stone projects from 2008 to April 2014.

It was a year later, in late 2011, that Keller told journalist Nikolewski that Laguna Pueblo was “not a client of mine.”

Later, in 2013, Blue Stone worked with Laguna Utility Authority on “5-year strategic roadmap development,” according to the document.

Keller’s criticism of The Downs deal continued even after the document indicates that Blue Stone and the Laguna Utility Authority worked together. In 2014, Keller called for the state attorney general to investigate The Downs deal.

The document includes no additional information about the work Blue Stone did or how much Blue Stone was paid. It doesn’t indicate whether Keller was directly involved in either Laguna project.

NMPolitics.net has been unable to verify Blue Stone’s work for Laguna Pueblo and Laguna Utility Authority with a source other than Polequaptewa and the documents he provided. In addition to Berliner not confirming or denying that they were clients – or the validity of the client list provided by Polequaptewa – officials with Laguna Pueblo and the pueblo’s utility organization have not responded to requests for interviews.

Keller reiterated to NMPolitics.net in late July what he’s said in the past – that Laguna Pueblo was not a client of his.

“It’s a fair question. I don’t mind people asking it, because it’s also easy to answer,” he said.

That was before NMPolitics.net asked about the documents Polequaptewa provided. The auditor’s spokeswoman, Freeman, said Monday that Keller couldn’t comment on what she called “questionable documents” because he wasn’t authorized by Blue Stone to discuss confidential client information.

NMPolitics.net is withholding publication of the documents, which appear to reveal the identities of other Blue Stone clients, instead publishing only the information necessary to detail the alleged link between Laguna Pueblo and Blue Stone.

Polequaptewa made his comments and provided the documents during interviews that began in late July. He did so on the condition that NMPolitics.net make clear that this reporter contacted him, and he only spoke with NMPolitics.net and shared documents because he has to “prove that I was telling the truth through documentation” in response to Keller’s comments about the lawsuit in other news organizations’ articles.

Other Laguna connections

When Keller first won a state Senate seat in 2008, he promised to “bring new and ethical leadership to Santa Fe” and defeated Shannon Robinson, a scandal-plagued incumbent.

Keller has championed a more ethical and transparent government ever since. As a state senator he persistently proposed reforms in response to scandals that dogged two governors. Since becoming state auditor on Jan. 1 his job has been to root out fraud and waste in government.

He’s directed his most pointed criticism at Martinez.

“She says she’s tough on corruption, and then she trades a hunting trip and a lot of campaign donations for a casino license,” he told Democrats at their state convention in 2013.

In the Senate, Keller represented the district where the state fair grounds are located. He had been criticizing The Downs’ proposal to build a new casino there since at least 2010, before Martinez became governor.

Meanwhile, NMPolitics.net discovered a couple of other connections between Keller and Laguna.

Keller received campaign contributions from Laguna Development Corp.; one of its lobbyists; and the chair of its board, Debra Haaland, totaling around $2,500 between 2008 and 2014, according to the money-in-politics website FollowTheMoney.org. That’s a relatively small amount of money, and the company also gave to many other politicians.

Keller endorsed Haaland, a Laguna Pueblo member who currently chairs the Laguna Development Corp. Board of Directors, when she successfully ran for chair of the Democratic Party of New Mexico in 2014.

“I’m proud to stand with Deb Haaland today as she begins this journey,” Keller said in a December 2014 news release. “Deb is as fantastic a leader as she is a person, and I know she will fight for Democratic values across our state.”

Weeks before that, Keller and Haaland were among a handful of Democrats running for statewide offices in the November 2014 election. While Keller was elected auditor, Haaland lost her bid to become lieutenant governor.

Haaland told NMPolitics.net she has never, in her position with Laguna Development Corp. or any other entity, worked with Keller in his position with Blue Stone or any other business entity to which he was tied.

Haaland was not Laguna Development Corp.’s board chair when the company bid on the state fair lease in 2011. She said she joined the board in 2010 and became chair in 2013.

When asked if any of the various Laguna Pueblo entities had been Blue Stone clients, Haaland referred NMPolitics.net to those entities for comment. “I don’t know who the pueblo does business with,” she said about Laguna Pueblo.


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