Powerful ties

by Lindsay Fendt, Searchlight New Mexico | July 20, 2021
7 min read
San Juan Generation Station
Smoke billows from the San Juan Generating Station in Waterflow. Photograph by Don J. Usner for Searchlight New Mexico

EDITOR’S NOTE: This article has been made available to the Sun by our content-sharing partner, Searchlight New Mexico, a nonpartisan, nonprofit news organization dedicated to investigative reporting in New Mexico.

Attorney General Hector Balderas’s cozy relationship with a local law firm is under scrutiny amid allegations that Albuquerque-based attorney Marcus Rael Jr. used his influence with the attorney general to convince Balderas to sign off on a multibillion-dollar utility merger. The merger between a global energy giant and New Mexico’s largest utility could drastically change electricity distribution in the state, with hundreds of millions of dollars for New Mexico utility customers hanging in the balance.

For eight months, the state has been involved in negotiations over a proposed merger between Connecticut-based Avangrid and Public Service Company of New Mexico (PNM), the state’s largest utility. Rael, who frequently represents the state, was hired to represent Avangrid’s parent company in the negotiations.

Five civic and environmental justice groups have filed a complaint with the State Ethics Commission, the State Auditor and the disciplinary board of the New Mexico Supreme Court, alleging that Rael used his influence to push the attorney general into signing on early to the merger deal. The move saved the companies money that would otherwise have gone into New Mexicans’ pockets via credits on their electricity bills and economic development funding. Balderas, who has participated in negotiations on behalf of consumers, initially critiqued the deal before changing course, after meetings with Rael.

“Balderas agrees that the [merger deal] is magically in the public interest, despite his own experts’ testimony detailing why the merger is bad for New Mexicans because it doesn’t adequately protect their rights,” said Mariel Nanasi, the executive director of New Energy Economy, one of the complainants. The groups are calling for an investigation.

The story behind the complaint is a complicated one involving a sprawling merger and questions about whether it would serve New Mexicans or was instead commandeered to profit utility companies. 

CLOSE TIES

While the name Marcus Rael Jr. is likely unknown to most New Mexicans, the attorney and lawyers at his law firm—Robles, Rael & Anaya—have likely been involved in a legal case that affects their daily lives. 

Since taking office in 2015, Balderas has hired Rael or others at his firm to help represent the state in at least 19 cases, which is at least triple the number of cases farmed out to any other private law firm, a review by Searchlight New Mexico showed. Balderas and Rael both graduated from the University of New Mexico law school in 2001 and briefly worked together before Balderas ran for public office. 

Rael’s legal appointments have involved him in cases with broad implications for the state, including Texas vs. New Mexico, a Supreme Court case concerning groundwater rights that could cost New Mexico $1 billion in damages and reduce the state’s future water supply. Lawyers at Rael’s firm are also involved in the landmark Yazzie-Martinez case, which is focused on widespread inequities in education funding.

In 2018, then State Auditor Wayne Johnson opened an investigation into the relationship between Balderas and Rael and the bidding process for outside firms, following an anonymous tip about the overwhelming amount of work that the attorney general’s office was sending to Robles, Rael & Anaya. The results of the investigation were never made public.

Now, the five groups—New Energy Economy, Democracy Rising, Indivisible Nob Hill, Renewable Taos and Retake Our Democracy—argue that Balderas awarded Rael’s law firm lucrative contracts without considering the lawyers’ experience or expertise for the case—a violation of state ethics law. They say that Balderas’s close relationship with Rael presented a conflict of interest in the merger case.

Balderas declined repeated requests for an interview with Searchlight regarding the merger. In a written statement to Searchlight, Matt Baca, a spokesman for the attorney general’s office, said the claims about favoritism or a conflict of interest are entirely false. “New Energy Economy has reached a new low in attacking another party in this case with such a baseless complaint,” the statement said. 

“With respect to his relationship to Mr. Rael, the Attorney General has friendships with many of the attorneys in the case and at the PRC,” Baca said in a separate statement. 

Rael said in an email that he had not seen the complaint, but that his firm specializes in representing local and state governments. “All the firm’s public contracts, including those with the Office of the Attorney General, were awarded in accordance with the stringent requirements of the State Procurement Code and the Governmental Conduct Act. It also goes without saying that the attorneys of my firm strictly adhere to the New Mexico Rules of Professional Conduct,” the statement said.

Avangrid is the U.S. subsidiary of the Spanish energy giant Iberdrola, and if the merger goes forward—which could happen as early as this fall—the state’s electricity infrastructure would become a part of Iberdrola’s massive global energy portfolio. The company would likely export large amounts of New Mexico-generated electricity to other states. 

For PNM and Avangrid, billions of dollars are at stake. 

AN UNEVEN DEAL

Iberdrola hired Rael in February, prior to a hearing with the Public Regulation Commission. Over the past eight months parties involved in the hearing have filed thousands of pages of documents for review in the case and presented arguments before the hearing examiner. This administrative process with the PRC is expected to end in a series of public hearings in August, after which the five elected PRC board members will ultimately decide whether or not to allow the merger to go forward. The attorney general participates in this process by providing testimony to determine whether or not the merger is in the public interest.

Hearing documents show that Rael held 18 meetings at the Attorney General’s office between his hiring and April 5. For his services, Iberdrola paid him $400 an hour, almost double his regular rate with the Attorney General’s Office. 

At the time Rael was hired, the attorney general’s office was pushing for changes to the merger deal that would better serve the public, such as money for infrastructure projects and credits on utility bills. 

On April 2, Balderas told the Albuquerque Journal that he had concerns about the merger’s lack of benefits for utility customers and worried about utility profits leaving the state. Experts for the state recommended massive changes, including doubling customers’ credits, making a 30-fold increase to the economic development funds paid to New Mexican communities, and placing the cost for dumping the Four Corners Coal Plant on shareholders, rather than customers.  

Days after those recommendations were filed with the PRC, Rael paid one last visit to Balderas’ office. Hearing documents do not reveal what they discussed, but a few weeks later, Balderas signed onto a tentative merger deal that fell dramatically short of what expert witnesses had suggested—a pivot from his earlier critiques.

The complaint alleges that this about-face is evidence that Rael pushed Balderas into the deal on behalf of his client, Iberdrola.

“We were satisfied that the [new agreement] improved significantly from the opening application, including increased economic development, rate credits, a full commitment to transition to clean energy, and investing in tribal communities and frontline workers,” Balderas wrote in an emailed statement to Searchlight. 

The revised agreement includes some additional benefits for the state, customers, tribal communities and union workers—but it saves PNM and Avangrid-Iberdrola $395 million that would have gone to customers and communities if the experts’ suggestions had been adopted in full. 

A LONG RELATIONSHIP

Documents obtained by Searchlight show that Rael and Balderas’ ties to each other have continued, at least financially, since they left law school.

Lawyers and other employees at Robles, Rael & Anaya have donated more than $36,000 to Balderas since his first run for public office in 2005—more contributions than from almost any other entity. Balderas, in turn, has retained the law firm to represent the state in lucrative cases and paid out millions in fees and expenses to the firm.

Invoices and contracts from the attorney general’s office obtained by New Energy Economy and shared with Searchlight show more than $3 million in direct payments of fees and expenses to Robles, Rael & Anaya. Searchlight’s investigation found many other cases with Rael listed as co-counsel, which include everything from consumer fraud cases to a major lawsuit against opioid manufacturers. 

Of those cases, 11 were class-action suits where Robles, Rael & Anaya would be awarded a fee based on the percentage of the case settlement—likely amounting to millions of dollars based on the settlement amounts.

Annabella Farmer contributed reporting to this story.

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Lindsay Fendt got her start covering the environment as a reporter for The Tico Times in San José, Costa Rica. She covered human rights, immigration and the environment throughout Latin America before moving to Colorado in 2017 for the Scripps Fellowship in Environmental Journalism at the University of Colorado. Before joining Searchlight New Mexico, Lindsay worked as a freelancer and is finishing a book about the global rise of murders of environmentalists.

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Understanding New Mexico's proposed new social studies standards for K-12 students

“The primary purpose of social studies is to help young people develop the ability to make informed and reasoned decisions for the public good as citizens of a culturally diverse, democratic society in an interdependent world.”
—National Council for the Social Studies 

Reader Michael L. Hayes of Las Cruces commented: What impresses me is that both the proposed standards and some of the criticisms of them are equally grotesque. I make this bold statement on the basis of my experience as a peripatetic high school and college English teacher for 45 years in many states with many students differing in race, religion, gender and socioeconomic background, and as a civic activist (PTA) in public education (My career, however, was as an independent consultant mainly in defense, energy and the environment.)

The proposed social studies standards are conceptually and instructionally flawed. For starters, a “performance standard” is not a standard at all; it is a task. Asking someone to explain something is not unlike asking someone to water the lawn. Nothing measures the performance, but without a measure, there is no standard. The teacher’s subjective judgment will be all that matters, and almost anything will count as satisfying a “performance standard,” even just trying. Students will be left to wonder “what is on the teacher’s mind?” or “have I sucked up enough.”

Four other quick criticisms of the performance standards. One, they are nearly unintelligible because they are written in jargon. PED’s use of jargon in a document intended for the public is worrisome. Bureaucrats often use jargon to confuse or conceal something uninformed, wrong or unworthy. As a result, most parents, some school board members and more than a few teachers do not understand them.

Two, the performance standards are so vague that they fail to define the education which teachers are supposed to teach, students are supposed to learn, and parents are supposed to understand. PED does not define words like “explain” or “describe” so that teachers can apply “standards” consistently and fairly. The standards do not indicate what teachers are supposed to know in order to teach or specify what students are supposed to learn. Supervisors cannot know whether teachers are teaching social studies well or poorly. The standards are so vague that the public, especially parents or guardians, cannot know the content of public education.

Three, many performance standards are simply unrealistic, especially at grade level. Under “Ethnic, Cultural and Identity Performance Standards”; then under “Diversity and Identity”; then under “Kindergarten,” one such standard is: “Identify how their family does things both the same as and different from how other people do things.” Do six-year-olds know how other people do things? Do they know whether these things are relevant to diversity and identity? Or another standard: “Describe their family history, culture, and past to current contributions of people in their main identity groups.” (A proficient writer would have hyphenated the compound adjective to avoid confusing the reader.) Do six-year-olds know so much about these things in relation to their “identity group”? Since teachers obviously do not teach them about these other people and have not taught them about these groups, why are these and similar items in the curriculum; or do teachers assign them to go home and collect this information?

Point four follows from “three”; some information relevant to some performance measures requires a disclosure of personal or family matters. The younger the students, the easier it is for teachers to invade their privacy and not only their privacy, but also the privacy of their parents or guardians, or neighbors, who may never be aware of these disclosures or not become aware of them until afterward. PED has no right to design a curriculum which requires teachers to ask students for information about themselves, parents or guardians, or neighbors, or puts teachers on the spot if the disclosures reveal criminal conduct. (Bill says Jeff’s father plays games in bed with his daughter. Lila says Angelo’s mother gives herself shots in the arm.) Since teacher-student communications have no legal protection to ensure privacy, those disclosures may become public accidentally or deliberately. The effect of these proposal standards is to turn New Mexico schools and teachers into investigative agents of the state and students into little informants or spies.

This PED proposal for social studies standards is a travesty of education despite its appeals to purportedly enlightened principles. It constitutes a clear and present danger to individual liberty and civil liberties. It should be repudiated; its development, investigated; its PED perpetrators, dismissed. No state curriculum should encourage or require the disclosure of private personal information.

I am equally outraged by the comments of some of T or C’s school board members: Christine LaFont and Julianne Stroup, two white Christian women, who belong to one of the larger minorities in America and assume white and Christian privileges. In different terms but for essentially the same reason, both oppose an education which includes lessons about historical events and trends, and social movements and developments, of other minorities. They object to the proposal for the new social studies standards because of its emphasis on individual and group identities not white or Christian. I am not going to reply with specific objections; they are too numerous and too pointed.

Ms. LaFont urges: “It’s better to address what’s similar with all Americans. It’s not good to differentiate.” Ms. Stroup adds: “Our country is not a racist country. We have to teach to respect each other. We have civil rights laws that protect everyone from discrimination. We need to teach civics, love and respect. We need to teach how to be color blind.”

Their desires for unity and homogeneity, and for mutual respect, are a contradiction and an impossibility. Aside from a shared citizenship, which implies acceptance of the Constitution, the rule of law and equality under the law, little else defines Americans. We are additionally defined by our race, religion, national origin, etc. So mutual respect requires individuals to respect others different from themselves. Disrespect desires blacks, Jews or Palestinians to assimilate or to suppress or conceal racial, religious or national origin aspects of their identity. The only people who want erasure of nonwhite, non-Christian, non-American origin aspects of identity are bigots. Ms. LaFont and Ms. Stroud want standards which, by stressing similarities and eliding differences, desire the erasure of such aspects. What they want will result in a social studies curriculum that enables white, Christian, native-born children to grow up to be bigots and all others to be their victims. This would be the academic equivalent of ethnic cleansing.

H.E.L.P.

This postmortem of a case involving a 75-year-old women who went missing from her home in Hillsboro last September sheds light on the bounds of law enforcement’s capacity to respond, especially in large rural jurisdictions such as Sierra County, and underscores the critical role the public, as well as concerned family and friends, can play in assisting a missing person’s search.

Reader Jane Debrott of Hillsboro commented: Thank you for your article on the tragic loss of Betsey. I am a resident of Hillsboro, a friend of Rick and Betsey, and a member of H.E.L.P. The thing that most distresses me now, is the emphasis on Rick’s mis-naming of the color of their car. I fear that this fact will cause Rick to feel that if he had only gotten the facts right, Betsey may have been rescued before it was too late. The incident was a series of unavoidable events, out of everyone’s control, and we will never know what place the correct color of her car may have had in the outcome. It breaks my heart to think that Rick has had one more thing added to his “what ifs” concerning this incident.

Diana Tittle responded: Dear Jane, the Sun undertook this investigation at the request of a Hillsboro resident concerned about the town’s inability to mount a prompt, coordinated response to the disappearance of a neighbor. From the beginning, I shared your concern about how our findings might affect Betsy’s family and friends. After I completed my research and began writing, I weighed each detail I eventually chose to include against my desire to cause no pain and the public’s right to know about the strengths and limitations of law enforcement’s response and the public’s need to know about how to be of meaningful assistance.

There was information I withheld about the state police investigation and the recovery. But I decided to include the issue of the car’s color because the individuals who spotted Betsy’s car emphasized how its color had been key to their identification of it as the vehicle described in Betsy’s Silver Alert. Because the misinformation was corrected within a couple of hours, I also included in this story the following editorial comment meant to put the error in perspective: “The fact that law enforcement throughout the state was on the lookout in the crucial early hours after Betsy’s disappearance for an elderly woman driving a “light blue” instead of a “silver” Accord would, in retrospect, likely not have changed the outcome of the search” [emphasis added].

I would also point to the story’s overarching conclusion about the inadvisability of assigning blame for what happened: “In this case, a perfect storm of unfortunate circumstances, many of them beyond human control, hindered the search that it would fall to Hamilton’s department to lead.”

It is my hope that any pain caused by my reporting will eventually be outweighed by its contribution to a better community understanding of what it will take in the future to mount a successful missing person’s search in rural Sierra County.

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