State Attorney General Hector Balderas describes himself as an aggressive prosecutor of criminals and crooked business practices, but he finds himself playing defense these days.
Balderas’ early support of the controversial merger proposal between Public Service Company of New Mexico and utility companies based in Connecticut and Spain has raised questions from critics about how tenaciously he represents the public. And it has directed a bright beam on his relationship with an Albuquerque law firm, Robles, Rael & Anaya, which gets considerable business through the Attorney General’s Office.
Marcus Rael, a longtime friend of Balderas, was hired early this year for $400 an hour by Iberdrola of Spain, parent firm of Connecticut-based Avangrid. Those two companies seek to merge with PNM and take ownership of it in an $8.3 billion deal.
Some critics say the presence of Balderas’ friend in the merger proposal is a conflict of interest for Balderas, who announced support for the effort in the spring. On Friday, Public Regulation Commission hearing examiner Ashley Schannauer said Rael’s employment by Iberdrola while doing considerable work for Balderas is, in fact, a conflict of interest.
Schannauer said it wasn’t the commission’s place to rule on whether Balderas had a conflict. He said that could be decided by the courts.
On the other hand, a letter late last week from an attorney of the Disciplinary Board of the New Mexico Supreme Court said “we do not find a conflict of interest” involving Balderas and Rael.
Balderas said Saturday in a text message that “distortions from frivolous filings” have placed the hearing examiner “in a very difficult position and that it will take a few days for the record to be properly updated.”
Balderas, in his second term as attorney general, scoffed late last month at the conflict-of-interest accusation.
“Our office has no conflict,” Balderas said. “You can’t sue Monsanto or Texas or the U.S. government the way we have if you have a conflict.”
He and his office would be crushed in court by opponents if there truly were a conflict of interest to which they could point, he said.
Instead, Balderas said, his office has recovered record amounts of money, $85 million, through litigation and settlements with companies like Wells Fargo.
Balderas, who will turn 48 this month, accuses longtime PNM critic Mariel Nanasi, head of New Energy Economy, of making absurd allegations against him to derail the merger, which she zealously opposes.
Nanasi’s charges are “laughable,” he said, worthy of “amateur hour” and most likely the product of “cultural bias.”
Nevertheless, Balderas recently wrote an op-ed, aggressively defending himself against the attacks.
But as the merger proposal — and the controversy that surrounds it — has made Balderas a target of criticism for Nanasi, some are pointing to other aspects of his performance in office. Among them are his role in the state’s Energy Transition Act and other efforts in consumer protection.
Longtime utilities lawyer Bruce Throne of Santa Fe said the attorney general didn’t stand up for residential and small commercial customers when the Energy Transition Act was passed by the Legislature in 2019.
Throne said the law will hit PNM ratepayers with many millions of dollars in capital costs from the abandonment of coal-fueled power plants in northwest New Mexico.
PNM argues it won’t ding customers, in part because it can borrow money at lower interest rates now and the coal plants will be replaced by cheaper renewable energy such as wind. In all, the company contends, customers will save money.
Matt Baca, chief counsel for the Attorney General’s Office, said criticism of the attorney general’s performance on the Energy Transition Act was misplaced. Balderas’ office said PNM should not be allowed to recover 100 percent of capital costs left behind at the power plants, Baca said.
He added the Attorney General’s Office advised the Legislature during consideration of that legislation that oversight of those matters belonged with the Public Regulation Commission.
Another attorney, Rob Treinen of Albuquerque, said Balderas hasn’t shown much ardor for consumer protection.
“The consumer protection end of the attorney general’s work has just been de-emphasized under him,” Treinen said. “It’s just been basically a lack of interest in doing anything for consumers.”
Balderas is far from alone in his support for the PNM-Avangrid merger. It’s backed by political heavyweights both near and far: Gov. Michelle Lujan Grisham and former Gov. Bill Richardson support the move.
Even former New York Gov. George Pataki recently sent a letter to The New Mexican conveying his confidence in Avangrid. Numerous environmental and community groups applaud bringing in the Connecticut-based company to propel the state toward renewable energy.
Stephanie Dzur, attorney for Coalition for Clean Affordable Energy, said Balderas and his office have continued to be helpful since signing on to the merger proposal in April.
She said she has discussed issues surrounding the merger case with Balderas and other members of his office. “They have remained actively involved,” she said. Her organization also supports the proposal.
Public Regulation Commission hearings in the merger proposal start Monday with public comment. Eight days of evidence hearings are scheduled to start Wednesday.
Connections and controversy
Nanasi has used public records requests and the Public Regulation Commission’s discovery process to acquire documents and details she maintains sully the merger proposal and Balderas’ reputation.
Her records show Rael’s firm filed at least $4.5 million in invoices for compensation from the Attorney General’s Office for services rendered in the past five years.
Rael’s firm has received numerous contracts and assignments from the Attorney General’s Office for work involving water law, excessive use of force by police, employment law, the Gold King Mine wastewater spill, and other consumer and environmental cases.
After Rael was hired by Iberdrola early this year, a Nanasi-requested filing with the regulation commission showed Rael had 18 meetings with the Attorney General’s Office between late February and early April.
Nanasi and her organization filed conflict-of-interest complaints against Balderas with the State Ethics Commission, the State Auditor’s Office and the Disciplinary Board of the New Mexico Supreme Court.
She said in a statement that Balderas “abdicated his responsibility as the chief law enforcement officer by failing to defend the people of the State of New Mexico. He has engaged in improper behavior, including the appearance of impropriety and has violated the public’s trust.”
“His actions and inactions with Mr. Rael have irrevocably tainted the merger process and the integrity of the judicial process.”
Schannauer, a quasi-judge in the case of the merger proposal, has found some of Nanasi’s many filings with the commission have substance.
For example, Schannauer wrote in his ruling Friday that New Energy Economy “has shown, under an objective standard, that a … conflict of interest exists for Mr. Rael in this proceeding” and that Rael’s representation of Iberdrola “is directly adverse … to the interests of the Attorney General.”
The Public Regulation Commission by law considers what is in the “public interest.”
An expert witness used by the Attorney General’s Office in the spring questioned in written testimony whether the merger proposal fit that description. Maryland utilities attorney Scott Hempling, who has written extensively about utility laws and mergers, said PNM’s proxy statement to shareholders indicated the company’s merger interest was to enrich its investors and not to benefit its customers.
Baca of the Attorney General’s Office said the document Hempling referred to was directed at shareholders, so it would naturally emphasize how it would benefit them.
Hempling said the $24.6 million in relief to ratepayers initially proposed by the merger applicants was “pennies” per month considering it covered 530,000 customers over three years.
The merger applicants have bumped up the benefits. They have offered $15 million in economic development support, up from an initial $2.5 million; guaranteed the creation of 150 jobs, up from 100; and increased customer credits to $65 million, up from $24.6 million.
Balderas said he also was pleased with concessions made by the applicants to low-income customers and Indigenous people in the Four Corners area. As an example, he said, $12.5 million would be directed to Native people affected by coal-plant closures in northwest New Mexico.
Balderas said Nanasi’s inability to see those elements as vital to the merger proposal shows her cultural bias.
“She’s trying to kill the deal and go back to the status quo,” he said. He added the Santa Fe attorney doesn’t value benefits to underserved communities as much as she values saving a bit on an electric bill.
Late last month, he also challenged her claim of conflict of interest involving Rael.
“Is it because she has a cultural bias toward Marcus?” Asked if he was referring to the fact that Rael is Hispanic, Balderas said: “I’m just sticking with my quote.”
But he added: “Why would she assume that a friend can’t comply ethically” with the rules like attorneys in other law firms?
“Mariel is completely wrong on the law,” Balderas said. “She’s made accusations without any evidence and is losing.”
Like Treinen and Throne, state Rep. Daymon Ely criticized Balderas’ handling of consumer protection issues. Specifically, Ely has said the Attorney General’s Office ineptly handled a case against Vivint Solar, garnering a roughly $1.9 million settlement that didn’t return any money to bilked customers.
Ely also said Balderas allowed Vivint to seal records in the case.
“The Attorney General’s Office never took an interest in it,” Ely said of the sealed records. Balderas’ office, the Corrales Democrat said, is “New Mexico’s public advocate, not just criminally but civilly as well.”
Ely has asked the State Auditor’s Office to look into the sealed records in the Vivint case, the fact victims weren’t compensated and Balderas’ use of outside counsel.
Among the attorneys used in the Vivint case was the Philadelphia-based firm Barrack, Rodos & Bacine, which contributed $5,000 to Balderas’ last reelection campaign. Other contributors listed on Balderas’ 2017 campaign report included Baron & Budd of Dallas, which also has received assignments from the Attorney General’s Office as outside counsel.
Balderas responded last month by filing a complaint against Ely with the State Ethics Commission.
He argued Ely had violated the Governmental Conduct Act by, among other things, “attempting to interfere with a law enforcement prosecution.” In an interview, Balderas accused Ely of “misusing his legislative authority.”
Balderas, who cannot run for a third term as attorney general, said his office will work with Vivint victims who want records unsealed. And he said he would never hire a law firm that would “cost us losses,” adding he wants to put the best teams on cases.
As a guy who grew up in the village of Wagon Mound, the playbook he draws from, he said, is “the playbook of the people.” He maintained he will serve donors, Republicans, Democrats and anyone else who deserves and needs it, regardless of affiliation.
He said: “I will treat you the same.”
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New Mexico AG's performance criticized amid conflict-of-interest allegations - Santa Fe New Mexican
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