New Mexico Attorney General Raúl Torrez is taking outgoing Western New Mexico University President Joseph Shepard and all five members of the Board of Regents to court over a $1.9 million buyout payment they awarded to Shepard, who state investigators say has routinely engaged in “wasteful” and “improper” spending of taxpayer dollars.
Previously, Assistant Attorney General Rose Bryan had filed an emergency motion asking a judge to temporarily block the severance payment, which he said violated the state’s Anti-Donation Clause, the New Mexico Constitution and the state Open Meetings Act, until it could be argued in court. On Wednesday, Jan. 8, however, Torrez’s office learned that Shepard already received the money on Jan. 2. He then directed his deputies to file a civil suit and ask a judge to prohibit Shepard from spending the $1.9 million.
“The level of greed, self-dealing and arrogance that has been exhibited throughout this process over the last year and a half has only been amplified by the actions and mismanagement of the regents of Western New Mexico and by the actions of Dr. Shepard.”New Mexico Attorney General Raúl TorrezAt this point, Torrez said, it’s not clear who at the university initiated the transfer of funds to Shepard. But the new lawsuit seeks to recover the money, void Shepard’s severance agreement and nullify his new employment contract as a tenured business professor with an annual salary of $200,000.
A judge in Silver City is set to hear Torrez’s arguments Monday afternoon and will decide whether to prohibit Shepard from spending the severance money, and whether to order Shepard to put the money in a trust until an ongoing audit of WNMU’s finances concludes.
“The level of greed, self-dealing and arrogance that has been exhibited throughout this process over the last year and a half has only been amplified by the actions and mismanagement of the regents of Western New Mexico and by the actions of Dr. Shepard,” Torrez said at a press conference held in his downtown Albuquerque office. “Our attorneys were meeting with Dr. Shepard’s counsel, and in communication with the board’s counsel, on the day that the payment was made and no one indicated that it was already processed.”
Shepard’s Santa Fe-based attorney, John Anderson, who previously served as U.S. Attorney for the District of New Mexico, denied any wrongdoing in a statement Thursday.
“His personal frustrations aside, the Attorney General is too talented and too experienced of a lawyer to believe he has any legitimate claim against Dr. Shepard. Western New Mexico University’s Board of Regents has the responsibility and legal authority to negotiate and approve executive compensation and severance agreements,” he wrote. “The board appointed a subcommittee to negotiate Dr. Shepard’s separation agreement and then unanimously voted to approve it. This entire process was handled appropriately, legally, and transparently. Dr. Shepard did not expedite his payment. Any allegations to the contrary have no legal or factual basis. The state’s time would be better spent helping the university focus on its important work of educating and supporting its students during this transition.”
Torrez said the $1.9 million is “unconscionable as a violation of public policy and the public interest” and is far in excess of anything Shepard was due. He was under contract as university president until 2027 and earned an annual salary of $365,000 with a $50,000 retention bonus. Under those terms, Torrez said, Shepard would have been eligible to receive nearly $600,000 — less than one-third of the severance package he received — upon leaving. When asked, Torrez did not rule out the possibility of pursuing a criminal case in the future.
The New Mexico Department of Justice is the latest state agency — and arguably the most powerful — to get involved with the spending situation at WNMU.
Searchlight New Mexico first revealed Shepard’s lavish spending in late 2023. In an investigation, Searchlight found that Shepard had spent tens of thousands of dollars traveling to exotic overseas destinations in the name of courting international students, though only a handful of students on campus came from other countries, and many of those were from neighboring Mexico. The investigation also found that Shepard’s wife, former CIA agent and author Valerie Plame, used a university purchasing card despite not being a university employee. It also found that Shepard spent nearly $28,000 on furnishing his on-campus house with pieces from Santa Fe retailer Seret & Sons. (Shepard insisted that the furniture belonged to the president’s residence, and not to him as an individual.)
Within days of Searchlight’s initial story, both the New Mexico Higher Education Department and the Office of the State Auditor announced their own investigations into WNMU. The latter released its findings in a November letter of concern and blasted the regents — Shepard’s supposed oversight board — for allowing more than $360,000 of taxpayer money to be spent in violation of university policy. The State Ethics Commission subsequently opened an investigation into the regents.
On New Year’s Eve, a month after the auditor published his office’s findings, Gov. Michelle Lujan Grisham sent a letter to the board of regents demanding their immediate resignations. Since then, all but one have stepped down. Lujan Grisham is in the process of reviewing candidates to replace the board. In her announcement, she called on state lawmakers to come up with a legislative fix that will prevent spending like this from happening again at any of New Mexico’s public universities.
New Mexico Speaker of the House Javier Martínez joined Torrez at the Thursday press conference to outline his plans for a bipartisan overhaul of how public universities and their boards of regents operate. He hopes to pass legislation and amendments to the New Mexico Constitution that change how regents are vetted and selected, to reform how regents award contracts and severance payments and to streamline the process for removing regents from their posts.
It’s not clear how Shepard, who isn’t set to officially depart as university president until Jan. 15, is spending the final week of his nearly 14 years at the helm of the university. Property records show that he and Plame recently bought a house in Embudo, between Santa Fe and Taos, and he attended the two most recent Board of Regents meetings virtually. His new five-year contract as a tenured business professor gives him eight months of sabbatical leave at full faculty pay starting Jan. 15. His contract also carries an indemnity clause, which says that the university will use taxpayer dollars to pay for an attorney of Shepard’s choosing if he lands in court. Torrez said he hopes that the pending court case will do away with the entire contract, including the indemnity clause.
It’s also unclear at this point whether Torrez’s actions end with the civil suit filed Thursday. When asked whether he is gathering evidence for a criminal case down the road, he said he wants other ongoing probes, including those from the State Ethics Commission and the Office of the State Auditor, to properly conclude. But he made it clear that a criminal case is still a potential outcome.
“We haven’t ruled that out as a possibility,” Torrez said. “We are going to wait for the auditor’s work to be completed … that will be the roadmap for how that happens.”
This article first appeared on Searchlight New Mexico and is republished here under a Creative Commons license.
