Practices at NM land office concern state auditor
ALBUQUERQUE, N.M. (AP)--State Auditor Hector Balderas said Dec. 20 he's concerned the state land office's lack of internal controls for land sales, exchanges and other transactions has cost New Mexico millions of dollars worth of state trust land.
Balderas outlined his concerns in a special report that stemmed from a two-year review of a sample of more than 100 trust land transactions between January 2002 and this past March. The review was prompted after some legislators complained of questionable practices within the agency.
Balderas, a Democrat, said the review revealed numerous financial, operational and contractual practices that should be reformed to ensure decisions made by the land office benefit the state trust that provides funds for public schools, higher education and other institutions.
The review claims that certain trust land transactions were not beneficial, some appraisals were outdated or altered, and the agency did not have adequate documentation to substantiate some of its major financial transactions.
Republican Land Commissioner Patrick Lyons and the state land office's general counsel immediately fired back, dismissing Balderas' claims and defending the agency's record.
"The more efficient you are, the more things you try to do, the more people go after you,'' Lyons told The Associated Press. "We ran it lean and mean like we should have run it. If we ran it like Hector wanted us running it, like Democrats have run state government, we'd have a billion-dollar deficit, not a half-billion dollar deficit.''
The land commissioner controls more than 13 million acres of mineral estate and nearly 9 million acres of surface estate with the potential to bring in millions of dollars to New Mexico's coffers each year.
Leases, rents and royalties from oil and natural gas, renewable energy projects, farms and ranches as well as land sales and exchanges make up a large chuck of the annual revenue. The land office collected $420 million during the fiscal year that ended in June and a total of more than $3 billion during Lyons' tenure, which ends this month.
"We had record revenues and ran the office on a flat budget. The numbers speak for themselves,'' Lyons said.
Balderas' office reviewed the processing of trust land sales, exchanges and planning and development leases to see whether transactions may have occurred that didn't benefit the trust, whether the land office had adequate policies and procedures and whether the agency followed those policies and procedures.
According to the review, the land office has no policy for splitting improvement value credits that are paid to developers when trust land is sold, leased or exchanged. Agency records show payments to developers from the credits totaled more than $15 million from November 2006 through July, resulting in a 62 percent split in favor of developers.
The review found that the land office failed to notify beneficiaries of sales and exchanges in a timely manner and that employee recommendations against certain land transactions were ignored.
Lyons also received campaign contributions from some parties that applied to purchase or exchange trust land, the review revealed.
State law does not require contribution disclosures related to trust land transactions, and contributions are not prohibited during the negotiation process. The Legislature should consider requiring disclosures for the land commissioner, Balderas said.
Land office general counsel Bob Stranahan said a higher level of scrutiny regarding contributions would be fine with the agency.
"You would have to shut down business if you were to remove from consideration people who give money to political campaigns,'' he said, adding that contributions have nothing to do with the agency's decision-making process.
Balderas' office made several recommendations in its 70-page report based on 15 findings regarding land office procedures.
The report has been referred to the New Mexico Legislative Finance Committee, the state attorney general's office and the U.S. attorney's office.