Spaceport America Director Dan Hicks, terminated last month without public explanation, was even untruthful about his title, according to a 362-page report, released today, on the forensic audit investigation conducted by The McHard Firm of Albuquerque into a whistleblower complaint accusing Hicks of mismanagement and abuse of authority. Hicks styled himself as CEO, but his actual title was director.
One of the more outrageous untruths uncovered by the three-month-long McHard investigation was Hicks’s claim that Vice President Michael Pence had appointed him to the Space Council. Hicks traveled to, but did not attend Space Council meetings, lacking the required security clearance to do so, the McHard report points out.
Worse, the report, written by Janet McHard, founding partner, and Beth Mohr, managing partner, documents “a severe breakdown of internal controls that resulted in possible waste and abuse of taxpayer funds,” according to the Government Accountability Office of the State Auditor, which released the report.
The Spaceport Authority board, under Rick Holdridge’s chairmanship from 2011 to May 2020, exerted no check over Hicks during his four-year tenure. Hicks took advantage of the lack of board oversight to engage in questionable management practices ranging from excessive travels and padding his expense account to improper procurement procedures and pursuing his own business development vision, which was often at odds with the Spaceport’s stated mission.
Hicks hired non-registered lobbyists to attract commercial orbital spaceflight companies to the Spaceport, the report states, although booster rockets used to launch such flights can only safely be dropped over the ocean. Nevertheless, Hicks “reported in an email that he was excited to meet the Lt. Governor of Colorado, because she would be key to determining where in Colorado the Spaceport would be allowed to drop booster rockets,” the report states.
Hicks, who worked for more than three decades in various staff capacities at the White Sands Missile Range, even “wanted the Spaceport to compete with his former employer” for federal defense contracts, although the Spaceport’s competitive advantages over WSMR were obvious only to Hicks.
Furthermore, Hick’s intended pursuit of military contracts contravenes Spaceport America’s specific intended purpose: to be a commercial spaceflight facility.
Interviewed by The McHard Firm (as was Hicks and whistleblower Zach De Gregorio, the Spaceport’s former director of finance and administration), former Spaceport board chair Holdridge admitted he didn’t know board policy required board approval for purchases over $2,500, the report states. Holdridge thought Hicks’s purchase limit was $60,000. Holdridge reported to The McHard Firm that he, Hicks and De Gregorio would approve contracts and purchases over $60,000.
Holdridge also said he was unaware it was a violation of the Open Meetings Act for the board to conduct business by phone and email and not in public, shortcuts often taken “because the board only meets quarterly,” the McHard report states.
In some cases, Hicks and De Gregorio used Holdridge’s signature stamp to approve purchases, a use that should have been documented by an email from Holdridge that he approved the purchase and use of the stamp.
Holdridge said Hicks “traveled half the time” and was “trying to run the Spaceport by telephone,” the McHard report states. Hicks approved his own travel—a procurement breach—and Hicks and De Gregorio backdated and falsified records to get Hicks reimbursed for travel expenses. McHard documents show $60,000 in unauthorized travel was reimbursed to Hicks, but “hundreds of thousands” in taxpayer dollars were probably expended for Hicks’s illicit travels.
Hicks was placed on paid administrative leave June 12 after De Gregorio filed a whistleblower complaint with various officials.
De Gregorio resigned June 21, shortly after submitting his whistleblower complaint. The McHard report states that, although De Gregorio actions initiated the investigation, evidence showed that the finance director had “assisted and in some cases planned apparent violations of law and policy on behalf of Mr. Hicks.”
Governor Michelle Lujan Grisham removed Rick Holdridge, a retired U.S. Air Force officer from Deming with a background in space technology, from the board immediately following the Oct. 16 meeting at which Hicks was terminated. The McHard report demonstrated Holdridge’s lax oversight contributed to “lack of financial controls” in operating the Spaceport.
The investigation that documented the improprieties and waste began at the Spaceport’s business offices on June 25, eight days after the New Mexico Economic Development Department contacted the Albuquerque forensic auditing firm on June 17. The formal contract hiring The McHard Firm was approved by the Spaceport Authority board in August.
EDD Cabinet Secretary Alicia Keyes joined the Spaceport Authority board in early 2019, as specified by statute, which also required Lieutenant Governor Howie Morales’ membership on the board. Keyes became Spaceport Authority chairperson in May 2020, according to EDD Public Information Officer Bruce Krasnow.
The McHard report ends with the recommendation that further investigation into Hick’s and De Gregorio’s actions be conducted by the “appropriate law enforcement agency.”
The report gives no estimate of how much money was misspent beyond “hundreds of thousands” for Hick’s travel.
The evidence reveals probable “violations of criminal and administrative statutes, the State of New Mexico Governmental Compliance Act and Governor Lujan Grisham’s Code of Conduct,” the report concludes.
In an EDD press release announcing the report’s findings, Keyes stated: “The Economic Development Department, supported by the Governor, moved quickly to investigate allegations of impropriety at the Spaceport. It is now time to move forward and repair the breakdowns that allowed these abuses to happen.”