State early childhood dept. CFO files suit, claiming $83M shortfall from universal childcare — Natalie Robbins, Albuquerque Journal
The former chief financial officer of the New Mexico Early Childhood Education and Care Department is alleging in a new lawsuit that she was placed on leave from her job after exposing an $83 million budget shortfall created by the universal childcare program.
New Mexico became the first state in the nation to offer free childcare to all residents last year. The program was unveiled on Sept. 8, and the complaint alleges that the announcement was made without consulting the Administrative Services Division at the ECECD or the former CFO Carmel Pacheco-Aragon, who is the plaintiff in the suit filed Wednesday in 1st Judicial District Court.
Jacob Candelaria, an attorney representing Pacheco-Aragon and a former New Mexico state senator, told the Journal his client found out about the universal childcare rollout on the same day it was announced to the public.
“There was no internal budget planning. There was no internal discussion. There was no plan in place in September when this was announced, and what that created was chaos,” Candelaria said.
Pacheco-Aragon alleges in her suit that by December, payments from the state to childcare providers had grown from around $29 million per month to $45 million per month, and were projected to stabilize at $53 million monthly, “creating a massive and unlawful budgetary shortfall,” the complaint alleges.
The program will cost New Mexico $606 million in fiscal year 2027, according to a state news release.
“The degree to which this agency is playing fast and loose with people's money is something I have never seen an agency come close to during my time in the Legislature,” Candelaria said. “But it’s being allowed to happen by a politically compliant Legislature, and at this point, a dysfunctional Department of Finance and Administration that is no longer doing its job.”
The lawsuit alleges that after ECECD was denied a $60 million appropriation from the state Legislature, Pacheco-Aragon and her team presented a report to Gov. Michelle Lujan Grisham’s office stating the deficit had snowballed to about $83 million for fiscal year 2026.
Pacheco-Aragon alleges that after months of attempting to warn state officials, including ECECD Secretary Elizabeth Groginsky and New Mexico State Controller Mark Melhoff, the department illegally transferred money from one program to another without written authorization and legislative approval to cover childcare payments for June of this year, a violation of state law.
On July 8, Pacheco-Aragon was “abruptly placed on administrative leave,” the complaint says. She remained on paid leave as of Wednesday.
Candelaria said the agency has another week to decide if it will terminate Pacheco-Aragon.
“It's been radio silence since they walked her out of her office on July the 8th,” he said.
The complaint alleges that the department told Pacheco-Aragon she was being placed on leave for blind-copying (or BCCing) an outside party on a work-related email, which court documents claim was a “bad-faith effort to silence a high-level fiscal whistleblower.”
Pacheco-Aragon is seeking reinstatement, double back pay plus interest, damages and attorney’s fees.
The ECECD did not immediately respond to a request for comment Thursday.
Natalie Robbins covers education for the Journal. You can reach her at nrobbins@abqjournal.com.
Two charged in alleged false immigration document scheme — Algernon D’Ammassa, Albuquerque Journal
A Hatch Valley woman is free on bond after being charged in an alleged false immigration document scheme along with a man from Fort Worth, Texas.
Homeland Security Investigations’ Las Cruces office, working with U.S. Border Patrol, launched a probe after fraudulent Social Security and Lawful Permanent Resident cards were intercepted at the Columbus Port of Entry in November, according to a federal criminal complaint.
The unnamed individual allegedly pointed law enforcement to a cash-for-work-papers scheme based at a residence in Hatch. In April, border authorities searched the phone of suspect Teodora “Lola” Moreno Reyes, 46, at the Paso del Norte Port of Entry in El Paso, Texas. On her device, prosecutors say agents found images of official documents and text messages including biographical information and pictures of faces the complaint states were used to manufacture records.
Prosecutors said the communications included images of finished documents and postal tracking information. In all, the complaint alleges the operation produced 14 fraudulent Texas identification cards, 76 fraudulent Social Security cards and 66 fraudulent Lawful Permanent Resident cards from 2024 to 2026.
The text messages led investigators to Fernando Galvan, 39, whom prosecutors allege was Moreno Reyes’ supplier in an enterprise where documents sold for $350.
The two were charged on three counts of conspiracy and document fraud. In a news release, the New Mexico U.S. Attorney’s Office said the defendants face up to 10 years in prison if convicted.
Moreno Reyes was released on a $5,000 unsecured bond and is required to wear a GPS monitor as she awaits trial. In Texas, court records indicate Galvan waived a detention hearing and was ordered to remain in custody.
Algernon D’Ammassa is the Journal’s southern New Mexico correspondent. He can be reached at adammassa@abqjournal.com.
New Mexico Land Commissioner Garcia Richard wins Democratic lieutenant governor nomination
—Patrick Lohmann, Source New Mexico
New Mexico Commissioner of Public Lands Stephanie Garcia Richard is the new Democratic nominee for lieutenant governor following a vote of roughly 500 state party members that concluded late Wednesday.
The Democratic Party of New Mexico announced the results of the party’s State Central Committee vote Thursday morning. The party stepped in to name a new lieutenant governor candidate after Secretary of State Maggie Toulouse Oliver dropped out of the race in June shortly after winning the primary election.
Garcia Richard, who is serving her second and final term overseeing the State Land Office, received 255 votes equaling 53% of the 477 cast.
State Sen. Harold Pope (D-Albuquerque), who lost to Toulouse Oliver in the June 2 primary, received 218 votes totaling 46% of the vote. Two other candidates received four votes that combined amount to less than 1% of the total ballots cast.
The results mean Garcia Richard will join former U.S. Interior Secretary Deb Haaland on the Democrats’ ticket for the Nov. 3 general election. They will run against Republican gubernatorial nominee Gregg Hull, the former longtime Rio Rancho mayor, and lieutenant governor candidate Sen. David Gallegos (R-Eunice).
In a statement Thursday, Garcia Richard said she is eager to begin campaigning alongside Haaland, who endorsed Garcia Richard ahead of the SCC vote, to defeat Hull and Gallegos in November.
“From my time in the classroom to the State House and the State Land Office, I have never stopped fighting for our communities,” Garcia Richard said. “Deb and I share a vision for a New Mexico where we lower costs, increase access to healthcare, build safer communities, and provide a world-class public education for every child.”
Garcia Richard told Source NM in a phone interview Thursday that Pope called her to congratulate her on her victory and to discuss ways he can support the Haaland-Garcia Richard ticket over the coming months.
“I’ve been doing this a long time, and there are two types of people that do this work,” she said. “Some of them get hurt and angry and can’t live with the results and can’t move past it. And other people are so gracious, and he is one of the latter.”
Garcia Richard said she was speaking with undecided SCC members through the four-day voting period that ended Wednesday, though she said she and her staff were confident that a majority of members would vote in her favor.
“I tried to hit my electability really hard,” she said regarding her conversations with SCC members. “November will be tough. Our slate — not only the governor’s ticket but all of our legislative races, our local races — we need everyone giving their all, and I felt like that’s where I could be of the most good.”
Haaland, in a statement Thursday morning, touted Garcia Richard’s experience overseeing the State Land Office, as well as serving as a state legislator and a teacher. If elected lieutenant governor, Garcia Richard would preside over the state Senate.
“As Lieutenant Governor, Stephanie will be a partner in the Roundhouse as we work to lower costs, create safer communities, ensure kids can read sooner, and provide access to quality healthcare,” Haaland said. “Stephanie will use her legislative expertise to move key pieces of legislation across the finish line.”
The vote concludes a roughly six-week-long, quasi-campaign in which Pope and Garcia Richard courted SCC members with the help of high-profile endorsements, as well as public appeals and fundraising.
In the week leading up to the election, which took place over a four-day period beginning Saturday, actress Jane Fonda endorsed Garcia Richard, and two state chapters of the Democratic Socialists of America endorsed Pope.
Pope also accused Sen. Antonio “Moe” Maestas (D-Albuquerque) a fellow Democratic state senator from Albuquerque’s West Side, of “mudslinging” after Maestas filmed a video accusing Pope of underfunding schools in his district and touting Garcia Richard.
In a statement Thursday afternoon, Pope congratulated Garcia Richard.
“Running for public office is never easy, and I wish her success as she moves forward in this campaign and in serving the people of New Mexico,” he said.
Pope also thanked the SCC for its work and supporters who lobbied the committee on his behalf. He urged Democrats who support him to “stay engaged” through November.
“This election may be over, but my commitment to serving our communities has not changed,” he said. “I will continue fighting for affordability, quality public education, accessible healthcare, workers’ rights, environmental justice, public safety, and a government that answers to the people—not corporations or special interests.”
The New Mexico Republican Party also decried the process as undemocratic and, in a statement Wednesday, called it a “backroom deal” that disenfranchised candidates and voters.
But Democratic state party officials said they were following the process to replace candidates who withdraw from races as required under party rules.
In a statement Thursday, DPNM Chair Sara Attleson said the committee of “Democrats from across New Mexico spoke, and they chose Stephanie.” Now it’s time to focus on the general election, she said.
“DPNM implores all Democrats in the state to do whatever you can, whether it’s knocking on doors or talking to your neighbors, to help us win over votes and get our Democrats elected in November!” she said.
Santa Fe City Council votes to close Plaza area to car traffic in summer
—Santa Fe New Mexican
In Santa Fe, the City Council has voted to close the streets surrounding the downtown plaza to vehicle traffic from Memorial Day through Día de los Muertos on Nov. 1.
The Santa Fe New Mexican reports the measure passed on a 6-2 vote at the Wednesday evening regular meeting of the council.
Supporters of the change called it a measure to improve pedestrian safety and accessibility, while detractors said it was yet another move to make downtown more oriented toward tourists than local residents.
Councilors Lee Garcia and Pilar Faulkner voted against the proposal.
Mayor Michael Garcia only votes in a tiebreaker capacity, but the New Mexican reports he said he also would not have supported the resolution.
The change will be implemented next year and will only be a one-year pilot, meaning that the council would have to pass new legislation to sustain the policy beyond 2027.
New Mexico utility regulators approve NM Gas Co sale to private equity firm
—Joshua Bowling, Source New Mexico
The New Mexico Public Regulation Commission approved the sale of New Mexico Gas Company to an affiliate of a Louisiana-based private equity firm in a 2-1 vote Thursday.
The controversial, nearly $1.3 billion sale carries several requirements, including a freeze on base rates through early 2028, $22.4 million in bill credits in the year following the sale’s close and a $10 million economic development investment in New Mexico Gas Company’s service territory.
Environmental advocates and several elected officials had vocally opposed the sale, citing reports that Bernhard Capital Partners’ founder previously operated a firm that Louisiana accused of overbilling the state for work done related to the infamous BP oil spill.
New Mexico Attorney General Raúl Torrez similarly opposed the deal, arguing that Bernhard’s reliance on short-term investments and private debt could lead to rate hikes and that its “complex web” of holding companies could thwart regulators’ oversight.
Public Regulation Commissioner Gabriel Aguilera seemed to agree with the critics’ objections when casting Thursday’s lone “no” vote.
“I’ve concluded that the proposed transaction is inconsistent with the public interest,” he said during Thursday’s meeting. “There is risk associated with BCP’s ownership of this currently well-managed company.”
PRC staff in May recommended that the commission approve the sale. Although its new owner is based in Louisiana, a PRC announcement noted that New Mexico Gas Company will maintain its New Mexico headquarters, leadership team and workforce.
In a statement, company President Ryan Shell said the new ownership guarantees that New Mexico Gas Company has access to the money needed to invest in its infrastructure.
“Our team at New Mexico Gas Company remains committed to providing safe, reliable, affordable service to our fellow New Mexicans,” Shell wrote.
Bernhard Senior Managing Director Jeff Baudier in a statement wrote that Thursday’s vote “reflects a shared confidence in New Mexico Gas Company’s future” and referred to the sale as an “investment in exceptional people, a strong utility and the communities it serves.”
State Rep. Matthew McQueen (D-Galisteo), who unsuccessfully ran to be the Democratic nominee for the Commissioner of Public Lands in June’s primary election, had previously criticized the deal at PRC meetings.
In a phone call with Source NM Thursday, he said he had not yet closely reviewed the terms of the sale, but echoed Aguilera’s concerns.
“I question selling a public utility to an inexperienced operator,” he said, adding that he thought the requirements of a $10 million economic development investment and base rate freezes were too small. “Given the size and the importance of the transaction, those don’t seem very meaningful.”
Amid turmoil, Highlands starts search for new president
—Las Vegas Optic
The search for a new president for New Mexico Highlands University has officially begun. The Las Vegas Optic reports that on Tuesday, the board of regents voted 3-2 to hire an outside firm to search for the school’s next president — who will be the third person to hold the position since 2023.
The search comes amid months of upheaval at Highlands. Regents placed former President Neil Woolf on paid leave in May before firing him a month later. His departure was the first in a wave of high-level firings, which included dismissals of the university’s provost, several vice presidents and the men’s basketball coach.
In a letter sent May 27 to the New Mexico Office of the State Auditor, Highlands’ regents accused Woolf of improper hiring and procurement practices, financial mismanagement and retaliation against university employees, among other misconduct — claims an attorney for Woolf has disputed.
Woolf, meanwhile, has filed a lawsuit against the university, accusing the institution of violating his contract and retaliating against him after he refused to follow an order to redirect a construction contract to a local firm with ties to a regent and a local politician.
Highlands also faces a whistleblower retaliation lawsuit from the university’s former vice president for advancement and a discrimination suit from a former athletics director.
