Frank Foy, the former state teacher pension fund investment officer, claims Finance Secretary Katherine Miller and other members of Gov. Bill Richardson administration tried to "coerce and threaten" State Investment Council members to keep Gary Bland as state investment officer.

Miller, through a spokeswoman Tuesday, called the allegation "grossly untrue and defamatory."

And State Land Commissioner Pat Lyons, who last October led the effort for a no-confidence vote against Bland shortly before he resigned, said Tuesday he wasn't pressured by Miller or anyone else to lay off Bland.

"They know better than to pressure me, 'cause I don't budge," said Lyons, a Republican who often is at loggerheads with Democrat Richardson's administration on various issues.

Foy's allegation against Miller is in an amended complaint filed this week in state district court as part of a whistleblower lawsuit originally filed in 2008. Foy claims the state Educational Retirement Board succumbed to political pressure from the Richardson administration to make a bad $90 million investment with a Chicago-based company called Vanderbilt Financial based on political considerations.

At a news conference Tuesday, Foy's lawyer, Victor Marshall of Albuquerque, said the charge that Miller threatened SIC members over Bland came from "sources" whom he declined to name. He also declined to describe the nature of the threats.

Marshall also does legal work for The New Mexican.

Attempts Tuesday to reach others who were SIC members at the time of Bland's resignation weren't successful.

The suit claims Bland and others pushed for the Vanderbilt investment so Marc Correra, a Santa Fe investor, would receive third-party marketing fees — which the suit claims are "kickbacks." Correra, son of Richardson contributor Anthony Correra, shared in as much as $22 million in fees for helping money management firms win state business in handling investments for the ERB and SIC.

Among the changes in the Foy lawsuit as a result of the new filing is that the wives of several defendants — including Bland, former Richardson chief of staff Dave Contarino, ERB chairman Bruce Malott and the Correras — are now named as defendants. Marshall said there's no evidence the spouses were part of any scheme. They are named, Marshall said, because they shouldn't be allowed to benefit financially from their husbands' alleged misdeeds.

The suit says Marc Correra and his wife, Claudia — who once worked as Richardson's "protocol officer" — now live in France.

Richardson appointed Bland to his job at the SIC — which paid more than $300,000 a year — at the outset of his first term in 2003. Anthony Correra, a close friend of Bland, served on a committee that recommended Bland for the job.

Lyons in October told The Associated Press that a private law firm hired by the SIC had gathered information that Bland pressured investment firms doing business with the state to hire certain third-party marketing or placement agents. He declined to identify the marketers, saying he didn't want to jeopardize investigations by the U.S. Attorney's Office and the U.S. Securities and Exchange Commission.

This move came shortly after Saul Meyer, co-founder of Dallas-based Aldus Equity Partners, which was the state's investment consultant, pleaded guilty to a fraud case in New York and told authorities there that "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."

Bland resigned a day before the SIC was to consider a resolution signed by four of its nine members expressing "no confidence" in Bland and restricting him from making investment decisions.

Contact Steve Terrell at 986-3037 or sterrell@sfnewmexican.com. Read his political blog at roundhouseroundup.com.