New 'pay-to-play' scheme emerges in N.M.

SANTA FE, N.M., Jan. 15 (UPI) -- Another "play-to-play" allegation that contributions to New Mexico Gov. Bill Richardson's presidential campaign influenced investment decisions has emerged.

The former chief investment officer for the Educational Retirement Board claimed the state invested and lost $90 million in the alleged "pay-to-play" scheme, the Albuquerque Journal reported Thursday.

In a lawsuit unsealed Wednesday, Frank Foy claimed he was pressured by retirement board Chairman Bruce Malott and a person identified as "John Doe No. 2" to do business with Vanderbilt Capital of Chicago and related firms because of political considerations.

The lawsuit also alleged Gary Bland and other State Investment Council members fulfilled similar instructions to invest money in Vanderbilt "in exchange for political contributions," the Journal reported.

The lawsuit alleged the investments were bad investments and Foy warned the state against making those investments. During a news conference Wednesday, Foy's attorney said the contributions went to Richardson's presidential campaign.

Richardson, Malott and Bland issued statements saying Foy's allegations are false, and called him a disgruntled employee.

Richardson spokesman Gilbert Gallegos said the governor "is confident that the state agencies named in this lawsuit acted properly and in the best interest of New Mexicans. "This lawsuit, filed by a disgruntled former employee who was accused of serious misconduct during his time as a state employee, makes absurd claims against state agencies. The state will vigorously defend those agencies."