The Santa Fe County Sheriff's Office is assembling a task force to continue a months-long investigation into allegations of theft and fraud in the county's Public Works Department.

"This is something that is going to take some time," said Sheriff Greg Solano on Thursday. "The investigation has expanded since day one and continues to expand on a daily basis."

While the investigation originally focused on allegations of fraud and theft related to county paving contracts, Solano said the case has grown to include "numerous other possible procurement and billing violations that are criminal in nature."

The investigation has already resulted in one criminal charge for a zoning violation, and the string of events has resulted in one firing and contributed to a resignation in county government. The case has also led to more scrutiny of road projects and pending procurement reforms, and spotlighted conflict-of interest issues on the City Council. Evidence of possible violations of the state anti-donation clause have also arisen, implicating government employees and officials from county rank-and-file to the state speaker of the House.

Solano said three full-time sheriff's employees are being pulled from other cases to work on the case, and the task force will include staff from the offices of the district attorney and the state attorney general.

Solano may solicit help from Department of Transportation technicians to see if roads were built to specifications. He has also considered hiring an engineer to help with that analysis, but the cost of that has been estimated at $20,000, an amount that would trigger a procurement process that could take time to complete.

Solano said he couldn't estimate what the investigation might ultimately cost — but said the amount of money the public was defrauded in the case appears to be between $100,000 and $500,000.

Sparked by a whistle-blower

The investigation began April 22 after a county employee tipped off someone in management to suspected wrongdoing related to contracts for paving and other construction services. Officials referred the allegations to the sheriff, which led to the investigation.

It originally focused on whether one or more county contractors had defrauded taxpayers by not performing jobs to bid specifications and charging the county for use of its own materials and equipment.

Solano said investigators now have suspicions that contractors billed the county for work that was never performed. He said the process for deciding the amount of compensation on the contracts has also been called into question.

Paving detour

Allegations of a different nature were uncovered early in the investigation when e-mails surfaced linking New Mexico House Speaker Ben Luján to the paving of a church parking lot in Nambé.

The e-mails came to light after someone wrote County Commissioner Harry Montoya asking for an explanation about why county crews and equipment were working at Sacred Heart Catholic Church near the speaker's home.

When Montoya queried then-Public Works Director James Lujan, Lujan replied that he had arranged to have the lot paved with asphalt millings donated by the state because the speaker had "asked" that it be done and Montoya had been "in agreement" with the request.

Both the speaker and Montoya denied directing anyone to place the millings on the lot, saying they only suggested the possibility, but relied on staff to vet the request for feasibility and legality.

James Lujan has since been fired.

The millings (which were placed at an expense to taxpayers of about $5,500) were recently removed at a taxpayer expense of about $3,000. Then-County Manager Roman Abeyta said the paving had to be taken up because the job had been done without any engineering and could potentially result in runoff and other unwanted impacts on neighboring properties.

After news about the church became public, county residents began tipping off the Sheriff's Office to other questionable paving projects. Solano recently confirmed at least six other private roads in Montoya's district had been paved with millings at the direction of James Lujan.

Solano said his office has not yet been able to determine who requested the paving.

James Lujan could not be reached for comment.

Two of the roads that were paved belong to the Solacito Mutual Domestic Water User's Association. Association vice president Lorenzo Sanchez said the organization is "bewildered" about the chain of events that led to the paving.

Sanchez said he and others in the area lobbied local and state officials to improve the roads for years.

He said Montoya promised that if residents could obtain the funds to bring the roads up to code, the county would take them over. But the association was never able to raise the money to do that.

Sanchez said when he and other area residents saw the roads being bladed and paved this spring, they figured the work was "on the up and up."

"I never got a call from any person," Sanchez said. "It just seemed to come about. And what were we to do? I wasn't going to call them up and tell them 'stop.' "

Sanchez said the roads in question — Camino Seco North and Boneyard Road — are private roads but are used daily by hundreds of county residents. He said the condition of the roads makes it difficult for school buses and emergency vehicles to access the area.

"This is an extension of something else that went wrong in the county," Sanchez said. "It has nothing to do with us. It's hurtful that we went to all these great lengths and now all of a sudden it's a bad thing."

Unfair Advantage?

As the investigation has unfolded, it's become clear that one contractor in particular — Advantage Asphalt and Seal Coat — has received the bulk of Santa Fe County's paving and roadwork contracts.

Former County Manager Roman Abeyta, who resigned last week, has said the company is one target of the investigation.

The firm did $7 million of county work over the past two years, most of which was "piggybacked" on existing city contracts and never put out to bid.

The firm — which is headed by former city employee and AFSCME union president Joe Anthony Montoya — has also been contracted to do some $4.2 million of work for the city of Santa Fe in the past few years.

Montoya has made significant campaign contributions to candidates running for city and county posts. In 2004, he donated $2,500 to City Councilor Matthew Ortiz, who became Advantage Asphalt's attorney in 2007.

Ortiz has not recused himself from participating in discussions or votes related to his client's contracts. Before news about Advantage became public, Ortiz never disclosed this potential conflict to fellow councilors. He has defended his actions. "I'm entitled to make a living as a lawyer, and I'm entitled to represent clients," Ortiz said. "I haven't done anything in my official role as a city councilor to implicate or to in any way cross that line that the city code of ethics defines."

Business as usual?

Santa Fe County has cited Montoya or his business for several code violations.

In October (and again in April), he was cited for storing commercial quantities of construction material and equipment on his property in a residential area off Estrellas Road North in La Cienega.

That violation was given as a reason for denying Montoya a permit to build a 10,000-square-foot home on the property in October. But less than a week later, the permit was granted with the note, "approved per Roman."

Abeyta said he couldn't remember the case specifically.

As of earlier this month, Montoya continued to store construction equipment and materials on the property.

Last week, after media calls brought attention to the issue, Santa Fe County filed a criminal complaint in Magistrate Court against Montoya regarding the zoning violation.

Montoya was also served with a Notice of Violation from the county in February when a passing code enforcement officer noticed that his company crew was installing an unpermitted culvert crossing in a floodplain area on Estrellas Road North directly in front of his property.

The code-enforcement officer documented the violation in photographs that clearly show Advantage Asphalt employees working on the project.

But when The New Mexican inquired about the crossing in June, county officials said they had no idea who was constructing a crossing in the area and would send a code-enforcement officer to check on the matter.

That visit resulted in the county issuing notices of violation to two of Montoya's neighbors, who own the property where the crossing was constructed. One of those neighbors said he had nothing to do with building the bridge and no one had ever asked his permission to build there.

County Attorney Stephen Ross told a reporter he didn't know why the county hadn't revealed its prior knowledge of the crossing when questioned about the matter.

Crime and punishment?

As more details emerge about the case, many residents have called the Sheriff's Department to offer tips about suspected wrongdoing. Solano said a lot of those calls are about driveways or roads that some suspect were paved with millings donated from the state.

But Solano said his investigators are focusing on gathering evidence on cases for which there is a criminal penalty.

"We want to remain focused on charges we believe we can take to a grand jury," Solano said.

"To the best we can determine so far, paving the roads and the church is not a criminal offense," Solano said. "That's one of the things the Attorney General's Office is assisting us with. But from what I've been told so far, you're not supposed to do it, but if you get caught doing it, there's not really a penalty."

The state Attorney General's Office issued the following written statement regarding the penalty for violating the anti-donation clause:

"The anti-donation clause is a constitutional provision which, if violated, gives rise to a civil law suit to restore the situation. It may also include attorney's fees against the violating government entity as well as costs of court."

Solano said his investigation is focusing on felony-level theft and fraud.

Ripple effect

No charges have been filed in the Sheriff's Office investigation yet — though a criminal complaint for code violations was filed by the county against Advantage Asphalt last week — but the investigation has had fallout.

Public Works Director James Lujan was fired after e-mails linking state House Speaker Ben Luján to the church lot paving were released.

County employee Denice Sanchez, who was responsible for processing and obtaining authorizing signatures on every contract Advantage Asphalt had with the county, recently requested a transfer out of the Public Works Department, saying she has "trust issues" with her supervisor, Division Director Robert Martinez.

Sanchez was told she would need to take a 40 percent pay cut to receive the transfer. In a letter she sent to county commissioners, Sanchez said she felt she was being retaliated against for her role in the investigation.

Solano recently classified Sanchez as an uncooperative witness. He said she has since agreed to meet with investigators again, but said questions remain about her work.

The buck stops where?

In May, shortly after the news about the church paving was released, County Commissioner Liz Stefanics challenged Abeyta to "step up to the plate" and make changes to address public concern that the county wasn't running correctly.

After that meeting, Ross proposed an ordinance aimed at tightening Santa Fe County's procurement code — it would require that all contracts over $100,000 be put out to bid and that all jobs over $250,000 be overseen by a professional construction management firm among other things. The ordinance — which will be considered Tuesday — also contains a clause aimed at protecting whistle-blowers. If passed, it will take effect immediately.

With a few exceptions, county officials have been largely silent on the goings on.

Commissioner Harry Montoya — who represents the northern district where the roads and church parking lot were paved with public resources — has failed to return numerous calls seeking comment.

Commissioner Virginia Vigil issued the following written response to a request for comment last week: "The investigation is still ongoing and any comments would be premature."

Commissioner Michael Anaya said last week that he had no indication that anything was wrong in the Public Works Department.

"If we would have known, we would have put a stop to it. Hopefully we can get someone in there, another manager and a Public Works director, who isn't going to play that game."

City officials have said they haven't had any unusual problems with Advantage Asphalt, and Solano has said he's only investigating one contract at the city, which he was asked specifically to examine.

But Councilor Patti Bushee recently asked State Auditor Hector Balderas to help review the city's contracts in light of recent allegations.

Balderas has said he'll make scheduled fall audits for both the city and county more stringent particularly in the areas of procurement.

Contact Phaedra Haywood at 986-3068 or phaywood@sfnewmexican.com.