Although a state judge ruled that the Attorney General's Office can't prosecute former Secretary of State Rebecca Vigil-Giron and three co-defendants in a high-profile fraud case, Attorney General Gary King said Monday the case is very much alive and he likely will hand the prosecution over to a district attorney.

King, in an interview, said that while he hasn't made a final decision on how to proceed with the case, he's had discussions with the district attorneys in Santa Fe and Albuquerque about prosecuting it.

Vigil-Giron, political consultant Armando Gutierrez and lobbyists Joseph and Daisy Kupfer were indicted in 2009 on 50 counts each. They are accused of misusing federal money earmarked for a voter-education campaign. Charges include fraud, embezzlement and money-laundering. All have pleaded not guilty.

"We're looking for one of the bigger DA's offices," King said. "The First and 2nd districts both have anti-corruption units." The First Judicial District includes Santa Fe, Rio Arriba and Los Alamos counties. The 2nd District consists of Bernalillo County.

State District Judge Pat Murdoch on March 17 gave King's office until the end of April to find a new prosecutor or file an appeal to the state Court of Appeals.

Defense attorneys argued that the Attorney General's Office had a conflict of interest because the office also represents the Secretary of State's Office. They also noted that Kupfer once worked for the Attorney General's Office, which they said was a conflict.

King's office argued there are safeguards in place to make sure the case was prosecuted impartially. "The judge simply said that, in his opinion, there were issues that cast shadows on the process and that in an important case of government corruption such as this, those shadows had to be removed in order for justice to best be served and for the community to have complete confidence in the judicial process," King said in a news release Monday.

King said while he still believes he could have prosecuted the case, he respects the judge's view on the possible appearance of conflict of interest.

The Vigil-Giron case is one of three cases involving alleged corruption that have been stalled by legal technicalities and appeals even before they have gone to trial.

While the attorney general was taken off the Vigil-Giron case, the office last month got the go-ahead to proceed with another case against another state official — former Region III Housing Authority Director Vincent "Smiley" Gallegos.

The Region III Housing Authority failed to repay $5 million in bonds sold to the State Investment Council in 2003 and 2004. Gallegos was charged with fraud, money laundering and conspiracy. Gallegos and three co-defendants have pleaded not guilty.

In that case, the state Supreme Court last month denied the appeals of Gallegos and his co-defendants to reverse lower court rulings that found no reasons why King's office should be barred from prosecuting them. "Now that this procedural roadblock has been eliminated we are already taking steps to bring this case to trial expeditiously," King said in the news release. "It is unlikely that the Vigil-Giron case ruling will affect the Region III prosecution."

King said he hopes the Gallegos trial will begin by the end of the year.

The third long-pending corruption case the attorney general is prosecuting involves Public Regulation Commissioner Jerome Block Jr. This case, which involves the alleged misuse of public campaign funds, has been in limbo since February 2010. Then state District Judge Michael Vigil threw out about half the charges against the Block, ruling that the state couldn't levy civil fines against him — as the Secretary of State did in 2008 — and also charge him criminally.

King appealed the decision to the state Court of Appeals, which more than a year later hasn't ruled on the case.

Asked Monday, King acknowledged he was frustrated with the slow pace but was careful not to criticize the appeals court. "I know their docket is very busy," he said.

But King said the months that the Block case has taken is one of the reasons that he's hesitant to appeal Murdoch's decision in the Vigil-Giron case.

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