Bill McCamley

New Mexico State Representative District 33

Chair, House Labor and Economic Development Committee
Chair, New Mexico Finance Authority Oversight Committee
Bill.McCamley@nmlegis.gov (575) 496-5731

Mr. Hector Balderas

Attorney General, State of New Mexico
408 Galisteo Street
Villagra Building
Santa Fe, NM 87501
cc: Office of the United States Attorney, District of New Mexico Office
Auditor Tim Keller

Dear Attorney General Balderas:

I write to you regarding the article printed in the International Business Times on September
20, 2017 regarding alleged pay-to-play activities in New Mexico involving state investment
activities. I am concerned, especially given that these investments represent hard working New
Mexicans' public funds. Specifically, I request an investigation for the following subject matters:

1. Do the activities described in the article constitute violations of the Governmental Conduct
Act? I have cited some relevant sections of state law below for illustration.

NMSA 1978 10-16-13.3. Prohibited contributions; financial service contractors.

A A business that contracts with a state agency or local government agency to provide
financial services involving the investment of public money or issuance of bonds for
public projects shall not knowingly contribute anything of value to a public officer or
employee of that state agency or local government agency who has authority over the
investment of public money or issuance of bonds, the revenue of which is used for public
projects in the state.

B. A public officer or employee of a state agency or local government agency that has
authority over the investment of public money or issuance of bonds, the revenue of
which is used for public projects in the state, shall not knowingly accept a contribution of
 anything of value from a business that contracts with that state agency or local
government agency to provide financial services involving the investment of public
money or issuance of bonds for public projects.

C. For the purposes of this section:

(1) "anything of value" means any money, property, service, loan or promise, but does
not include food and refreshments with a value of less than one hundred dollars ($ 100)
consumed in a day; and

(2) "contribution" means a donation or transfer to a recipient for the personal use of the
recipient, without commensurate consideration.

2. Do the activities described in the article,violate state disclosure laws regarding contributions
to Executive Branch Officers or affiliated groups (such as the Republican Governor's
Association) and subsequent award of state contracts. I have cited some potentially
relevant sections of the New Mexico Procurement Code, including NMSA Section 13-1-191.1
Sections B and E.

NMSA 13-1-191.1

B. A prospective contractor subject to this section shall disclose all campaign

contributions given by the prospective contractor or a family member or representative
of the prospective contractor to an applicable public official of the state or a local public
body during the two years prior to the date on which a proposal is submitted or, in the
case of a sole source or small purchase contract, the two years prior to the date on which
the contractor signs the contract, if the aggregate total of contributions given by the
prospective contractor or a family member or representative of the prospective
contractor to the public official exceeds two hundred fifty dollars ($250) over the
two-year period.

E. No campaign contribution or other thing of value shall be given by a prospective

contractor or a family member or representative of the prospective contractor to an
applicable public official or the applicable public official's employees during the
pendency of the procurement process or during the pendency of negotiations for a sole
source or small purchase contract.

3. Are there any implications to the state regarding any possible violation of Securities and
Exchange Commission rule 17 CFR Part 275 (noted in SEC Press Release Release No.
IA-3043; File No. S7-18-09)?

"The Securities and Exchange Commission is adopting a new rule under the Investment
Advisers Act of 1940 that prohibits an investment adviser from providing advisory
services for compensation to a government client for two years after the adviser or
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certain of its executives or employees make a contribution to certain elected officials or

candidates. The new rule also prohibits an adviser from providing or agreeing to provide,
directly or indirectly, payment to any third party for a solicitation of advisory business
from any government entity on behalf of such adviser, unless such third parties are
registered broker-dealers or registered investment advisers, in each case themselves
subject to pay to play restrictions."

4. Do the activities described in the article violate the state's Campaign Reporting Act or
campaign finance laws?

5. Recently, the State Investment Council has come under scrutiny for barring four of its
members from attending or voting in executive sessions, citing that those four members
have not signed an updated Code of Coi;iduct. Those four members include two members
who have a constitutional duty of membership in the State Investment Council. The
updated Code of Conduct states in part, "Council members shall not, directly or
indirectly... Reveal to third parties privileged communications made during closed Council
sessions." Discussion and decisions that take place in executive session may relate to the
allegations in the International Business Times article, and may directly relate to State
Investment Council business with some of the named companies and elected officials.

Due to the State Investment Council's updated Code of Conduct, the public has limited
access to information to determine whether the decisions made in executive session might
unfairly benefit companies that have also made political contributions to entities related to,
controlled by, or operating for the benefit of, any SIC member. I respectfully request that
your office investigate whether any discussion or decisions occurring during executive
sessions of the State Investment Council have violated relevant state law or the SIC Code of
Conduct.

The above list of concerns is intended to be illustrative, not exhaustive. I urge your office to
conduct an investigation into all matters related to any pay-to-play activities of the State
Investment Council.

ftd/1/c&Jy
Bill McCamley
New Mexico State Representative
Chair, New Mexico Finance Authority Oversight Committee