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New Mexico Attorney General Faces Fraud, Corruption Allegations Amid Power Company Merger

New Mexico Attorney General Hector Balderas may have violated department of state fraud and anti-corruption laws by hiring the fast of an old law school ally to work on several lucrative cases for the state of matter, according to a charge filed with the state hearer in mid-july .
The five environmental and civic groups behind the ailment are asking State Auditor Brian Colón to investigate the potential violations angstrom well as alleged “ overbilling and duplicative charge ” by a tauten where Balderas ’ longtime supporter Marcus Rael is a collaborator. The lawyer general is required to sign off on hires and charge .

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The organizations — New Energy Economy, Democracy Rising, Indivisible Nob Hill, Renewable Taos and Retake Our Democracy — filed like complaints with the New Mexico Ethics Commission and the Disciplinary Board of the New Mexico Supreme Court.

The allegations come as Robles, Rael & Anaya is representing the Spain-based international energy company Iberdrola as its subsidiary company, Avangrid, attempts to merge with New Mexico ’ sulfur largest electric utility, ​​Public Service Company of New Mexico, known as PNM .
The organizations allege in the complaint that the firm ’ s work in the contest multibillion-dollar fusion case influenced the lawyer general to approve the conduct despite Balderas ’ office ’ s own technical witnesses ’ testimony arguing that it wasn ’ thymine in the public sake. The lawyer general has rejected the allegations against him .
Some critics have besides fought the amalgamation on environmental grounds because it will allow the aging Four Corners Power Plant, built in the northwestern part of the state in the 1960s, to continue operating — and producing electricity from coal, which is one of the most pollute sources .
While the complaint was filed with the country auditor ’ second office, its authors note that Colón himself might have conflicts of interest if he were to investigate : He previously worked as an lawyer at Rael ’ s firm for 12 years. Colón besides attended the University of New Mexico Law School with Rael and Balderas from 1998 to 2001.
 

The attorney general denied the allegations in a statement through his office in mid-July, calling the complaint “baseless,” and said it contains “half truths and purposeful omissions,” without detailing them.

 
The groups that filed the complaints note that the trio ’ s professional relationships “ may require the rent of an independent auditor. ”
The lawyer general denied the allegations in a statement through his office in mid-july, calling the ailment “ baseless, ” and said it contains “ half truths and purposeful omissions, ” without detailing them .
The country hearer ’ randomness spokesperson recently said the office “ has opened an examen ” but that the office can not comment far due to the ongoing review .
The spokesperson said the function “ constantly contemplates any and all likely conflicts of concern and proceeds accordingly and systematically with professional standards ” but refused to say whether Colón or an outside auditor would investigate the complaint.
 
Old Friends and Taxpayer Money
Balderas does not seem to have been wholly frank about his participation with Rael ’ second tauten. In 2018, he told the Santa Fe Reporter that the first time he ever hired the firm was to represent the country in the landmark Texas v. New Mexico, a water jurisprudence case argued before the Supreme Court .
“ In over 10 years of populace service, ” Balderas told the Reporter, “ I ’ five hundred never retained them [ before then ]. ”
But Rael ’ s firm had indeed worked on a boastfully number of cases for Balderas ’ office going back to 2015 when he was first base elected, according to public records included in the complaint. The law fast has signed at least 14 contracts with the lawyer general ’ second function since then — more than any other secret lawyer or firm, the ailment alleges .
It ’ s common for attorneys general to hire outside guidance to work on cases in which the state either has insufficient expertness or resources. But environmental and civil rights lawyer Mariel Nanasi describes Rael ’ s rent in the Texas v. New Mexico case as a situation where the lawyer general ran afoul of his own protocols for hiring a private tauten. Those protocols require that the outside rede have proven expertness in relevant subject matter .
“ Marcus Rael doesn ’ metric ton have water police feel that we know of [ and ] had never appeared before the Supreme Court, which is besides kind of unusual, ” said Nanasi, who co-authored the ailment to the state hearer on behalf of the climate advocacy group New Energy Economy .
Rael suggested that Nanasi is mistaken, and that he has extensive experience handling a wide range of cases on behalf of the state .
The complaint besides alleges multiple instances of questionable charge by Rael ’ south tauten. For model, Balderas hired the firm to represent the country in its lawsuit against Volkswagen during the company ’ second emissions scandal .
Rael ’ s firm wrote in a court file that it accepted the case with the reason that “ doing so would likely preclude them from accepting other matters. ”
 

Criticism of the attorney general’s hiring of Rael dates back at least three years, when one of Balderas’ challengers told the Santa Fe New Mexican that Rael had no water-law experience and that “Hector wanted to do a favor for that law firm.”

 
New Mexico won a settlement in 2019 for more than $ 13 million and Rael ’ second firm received over $ 4 million for its function in litigating the sheath .
however, the tauten — and Rael, individually — were working on other cases at the same time, including Texas v. New Mexico on behalf of the express. During the Volkswagen event, the ailment shows, Rael regularly billed over 100 hours per three month-period in the Texas v. New Mexico lawsuit, and four times more during one quarter of the year .
As detailed in the complaint, Nanasi suggests that this may be inaccurate or deceitful. “ When you look at the actual invoices, ” she said, it doesn ’ triiodothyronine seem plausible that a lawyer would spend that a lot prison term on one case while besides working on other active cases. While barely unprecedented, she added that it is celebrated that Rael continued to bill on the case even after stepping down as its lead rede .
criticism of the lawyer general ’ south lease of Rael dates back at least three years, when one of Balderas ’ challengers in the lawyer general raceway told the Santa Fe New Mexican that Rael had no water-law experience and that “ Hector wanted to do a favor for that law firm. ”
In an e-mail argument to Capital & Main , Rael defended his function in Texas v. New Mexico , adding that Nanasi ’ s arguments were based on guess and not fact.

“ For example, Ms. Nanasi alleges in the ailment that I billed 409 hours in the fourth quarter of 2017, ” he said. “ What she doesn ’ triiodothyronine tell you is that I was preparing for one of the most significant arguments in the state ’ s history before the United States Supreme Court on January 8, 2018. My hours were reasonable considering the importance of the font and the Supreme Court argument, and I stand by them. ”
Rael besides denied exercising any excessive determine with the lawyer general.
 
‘No Public Interest Purpose’
If approved by the country Public Regulation Commission in a vote expected adjacent calendar month, the state ’ randomness largest electric utility, PNM, would be acquired by Avangrid, the U.S. subordinate of spanish energy giant star Iberdrola .
PNM and Avangrid announced their purpose to merge final October. In summation to touting benefits for PNM shareholders, the companies promised that the amalgamation would bolster green power in the state .
“ Our compound companies provide greater opportunities to invest in the infrastructure and modern technologies that will help us navigate our transition to clean department of energy while maintaining our commitments to our local teams and communities, ” PNM president and CEO Pat Vincent-Collawn said in a statement at the time.
 

While Iberdrola has garnered praise for its environmental efforts and has undertaken robust climate action for an energy company of its size, it continues to build new gas-fired power plants, which account for over 15% of its production.

 
But there were about immediate questions about how the fusion would benefit the environment given uncertainty about how the modern merged ship’s company would transition off from dodo fuels and how it would clean up two coal plants in New Mexico .
Plus, Iberdrola has a history of greenwashing — giving the appearance of being environmentally creditworthy without being so, according to critics. While Iberdrola has garnered praise for its environmental efforts and has undertaken robust climate action for an energy company of its size, it continues to build new gas-fired office plants, which account for over 15 % of its production. Iberdrola has besides been accused of ten thousand abuses in Latin America, including violating autochthonal rights .
And while an Avangrid-PNM amalgamation would require the company to abandon its impale in the coal-fired Four Corners Power Plant, it wouldn ’ metric ton stop the fossil-fuel burn. rather, PNM ’ s impale in the establish would be transferred to the Navajo Transitional Energy Company, all but guaranteeing that this dirty power plant would, under NTEC ’ south command, keep running for years .
As the fusion moved through the regulative work this bounce, consumer and environmental advocates demanded more public benefits than were in the original proposal, including a larger rate credit rating for customers. In mergers like this, regulators are legally obligated to consider whether the cope is in the best interest of the populace .
But, Scott Hempling, a recently appointed union estimate who served as an technical witness for New Mexico ’ s lawyer general, testified that “ this transaction has no public concern aim. ”
In late April, Balderas, acting on behalf of the state, came to a condition agreement with PNM, Avangrid and several other parties in the amalgamation. The agreement appears to run counter to the testimony of the lawyer general ’ randomness own technical witnesses, including Hempling, and left consumers with fewer fiscal benefits than advocates had sought, not to mention the threat of higher rates than ahead .
During the fusion proceedings, Avangrid ’ s parent company, Iberdrola, hired a lawyer to oversee the negotiations. Who was their newfangled advocate ? Marcus Rael .
It was only after Rael came on display panel — at $ 400 an hour — that Balderas approved the fusion condition .
Nanasi argues that Iberdrola hired Rael in the settlement negotiations for his “ extralegal ability ” — his special connection to the lawyer general .
She and her co-authors on July 21 filed an update to their initial ailment, alleging conflicts of matter to by Rael. They say Rael may besides have violated state cake association rules for representing New Mexico in multiple cases while he simultaneously worked for Iberdrola as the company tried to convince Balderas to approve their fusion .
“ Rael was intervening with the Attorney General on behalf of his customer, Iberdrola, to cause the Attorney General to take a stead regarding the fusion that conflicted with the position the Attorney General had already taken in the PRC ’ s review of the proposed amalgamation, ” the ailment update reads .
Nanasi argues that by hiring Rael, the energy company got what they wanted from the lawyer general. “ They got him to sign on to the amalgamation. ”
Rael denies any excessive influence .
The express hearer hasn ’ t however publicly commented on the complaint. The fusion proceedings are scheduled to conclude next calendar month when, after a series of hearings, the New Mexico Public Regulation Commissioners are expected to vote on the deal .
 
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