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The shoe finally drops: New Mexico files lawsuits in federal and state courts in “pay to play” scandal

By   /   May 6, 2011  /   No Comments

It’s been a Black Friday for Gary Bland, Marc and Anthony Correra and perhaps more former officials and friends of Bill Richardson’s administration.

After more than a year of speculation, New Mexico’s State Investment Council (SIC) filed lawsuits in both federal and state district courts, charging 15 people as well as an equity firm with taking part in kickbacks and “pay to play” schemes between 2003 and 2009.

The suits filed Friday (May 6) are looking for monetary damages and recovery of what SIC officials labeled as “ill-gotten gains” acquired “at the expense” of the SIC’s permanent funds, which currently exceed $15 billion in assets.

The SIC’s current investment officer, Steve Moise, said in a statement the council is looking to get back “millions of dollars improperly taken from the citizens of New Mexico … Quite simply, this is the right thing to do.”

Gov. Susana Martinez also issued a statement, demanding all investment managers who entered into deals with the SIC using what’s called “third-party placement agents” should contact the state Attorney General’s Office and reveal the details of their arrangements “before the Attorney General knocks on their doors.”

Third-party placement agents act as go-betweens, introducing one financial party to another and often receive handsome fees for the service. Third-party placement fees were reportedly used frequently under Bland’s tenure as the SIC chief investment officer. Furthermore, there are allegations that many of the transactions were finalized through Marc Correra, the son of one of Richardson’s closest political friends, Anthony Correra.

The charges in the official complaint filed Friday include breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of contract and unjust enrichment.

Bland denied any wrongdoing, saying the charges were “absurd.”

According to Associated Press, Bland said, “I certainly was not complicit in anything. I did an exceptional job for those people while I was there.”

Bland served on the SIC from 2003 to 2009, when he was forced to resign amid a federal investigation and allegations of using third-party placement agents. Anthony Correra served on a committee during the Richardson administration that recommended Bland for the SIC’s chief investment officer post.

AP reports that according to the lawsuits, the elder Correra “often purporting to speak on behalf of Governor Richardson … instructed, requested and/or suggested that Bland cause NMSIC to make alternative investments that would benefit politically-connected individuals, many of whom made and solicited contributions, directly or indirectly, to or for the benefit of Governor Richardson’s election campaigns.”

Marc Correra reportedly earned more than $22 million in third-party fees. He is now living in Paris, according to legal papers filed through a divorce proceeding the younger Correra is going through.

Richardson himself was not named in any of the suits filed Friday. The former governor has said he was unaware of any illegal activity or political favors done in exchange for investing in SIC funds.

But another of the defendants listed in Friday’s lawsuits — Saul Meyer, founder of Aldus Equity — has already pled guilty in New York state to taking part in a financial scheme involving pension funds. During the New York proceedings, Meyer admitted that:

“On numerous occasions, however, contrary to my fiduciary duty, I ensured that Aldus recommended certain proposed investments that were pushed on me by politically-connected individuals in New Mexico. I did this knowing that these politically-connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico.”

Among the other cast of characters listed in Friday’s lawsuits, as per AP:

Other defendants include Guy Riordan, a former Albuquerque securities broker and Richardson contributor; and several people who pled guilty in the New York pension scandal, including Henry “Hank” Morris, a political adviser to former state comptroller Alan Hevesi, who oversaw one of the nation’s largest retirement funds. One of Hevesi’s sons, Daniel, was named as a defendant. He served as a placement agent on a New Mexico investment deal.

To read the entire AP story by Barry Massey, click here.

There are already a number of whistleblower lawsuits wending their way through the court system, filed by former state investment officer Frank Foy, making similar “pay for play” allegations. You can click here for more information on Foy’s suits.

For some background on the SIC controversy, click here,


here and


Update 5/7: Guy Riordan, a former State Game Commission member and Richardson friend who was banned from the securities industry in 2009, was quoted in the Albuquerque Journal in regards to the lawsuits, “Everything we did was fully disclosed. I have no idea what these allegations are about, except that somebody is running for office.”

Richardson has not commented yet but his former press secretary, Gilbert Gallegos, told the Journal in a statement, “After a thorough investigation of state investments, a federal grand jury has not found any wrongdoing by the Governor’s Office. When. Gov. Richardson learned of the practice of investment institutions paying large fees to third party marketers, he convinced the SIC to end the practice. Gov. Richardson remains confident that all investments by SIC were first properly vetted by the competent staff of financial analysts the SIC, and made with the best interests of the state in mind.”

Some other bits of information:

  • Bland and Riordan are the only names in the state lawsuit
  • Bland earned about $2 million in his tenure at the SIC, making him one of the state’s highest-paid employees
  • One of the allegations in the suit claims that as part of the pay-to-play scheme, Bland helped Meyer become an adviser to the Educational Retirement Board and its millions of dollars in assets
  • The suit describes Anthony Correra as the “de facto gatekeeper” of at least part of the SIC investment portfolio, who purported to speak on behalf of Richardson and “instructed, requested and/or suggested” that Bland make investments with individuals who donated to Richardson’s political campaigns


Rob formerly served as staff reporter for Watchdog.org.

  • Simon

    Bruce Malott needs to be joined as a defendant and Malott’s lawyer buddies too. they’re all Richardson minions.