Spaceport America-Investigation

A crowd gathers at Spaceport America for a 2011 dedication ceremony. The former chief financial officer of the spaceport is now being represented by two Albuquerque law firms in his whistleblower complaint.

The former chief financial officer of Spaceport America contends a number of government officials and entities, including Gov. Michelle Lujan Grisham, colluded to defraud taxpayers to the tune of about $200 million in public money.

Zach DeGregorio’s 261-page complaint, filed without legal representation Dec. 28 in First District Court, paints a complex portrait of several government agencies working together to cover up the state’s efforts to ensure the New Mexico Finance Authority maintained the ability to refinance the spaceport’s gross receipts tax bonding power.

DeGregorio contends in his complaint that allowing a private business to handle that refinancing could have saved the state tens of millions of dollars, if not more. He said his efforts to convince Spaceport authorities to go that route were stymied at every turn. He also alleged the spaceport Authority then issued $234,310 in what he calls “fraudulent” bonds to the Finance Authority without failing to disclose “material information to investors.”

While the defendant in the case is the state of New Mexico, DeGregorio alleges misconduct or criminal activity on the part of many state authorities, including Lujan Grisham, state Auditor Brian Colón, Attorney General Hector Balderas and Alicia Keyes, Cabinet secretary of the state Economic Development Department.

The complaint also contends the state committed multiple violations of the New Mexico Whistleblower Act after DeGregorio attempted to tip off state officials to repeated efforts on the part of Spaceport authorities and other government entities to bypass state procurement and expenditure codes.

As a result, DeGregorio — who resigned from his position in June 2020 — says in the court document he was forced to depart spaceport America.

DeGregorio alleges in his complaint the state made an unnecessary and illegal $79,000 payment to a forensic accounting firm based in Albuquerque to provide a 2020 report on the spaceport’s leadership. His court complaint also includes charges of sexism and a claim that at least one aerospace client on the spaceport facility was involved in using illegal drugs.

His complaint asks the court to schedule a jury trial and award him punitive damages to cover a loss in back pay and medical expenses for emotional distress. Among other requests, he also wants the court to decree the defendants violated his rights under the state Whistleblower Act and apologize to him publicly through a news release.

DeGregorio did not respond to an email requesting comment Monday.

Nora Meyers Sackett, spokeswoman for Lujan Grisham, said her office is aware of the lawsuit but does not comment on pending court cases. Alice Carruth, a spokeswoman for Spaceport America, also declined comment as the case is pending.

DeGregorio’s lawsuit comes about 13 months after Colón released the McHard Firm’s report, which said Spaceport America’s former director, Dan Hicks, mishandled funds — including gross receipts tax revenue — and possibly violated laws and ethics codes.

That report may have been initiated in some ways by DeGregorio, who filed a complaint accusing Hicks of pressuring him to ignore procedures meant to provide accountability of public spending.

The report said DeGregorio either aided Hicks in some ways or tried to cover up for him — accusations DeGregorio calls “absurd” in his Dec. 28 complaint.

The McHard report came after Spaceport Authority board members moved to place Hicks on administrative leave.

He was later fired.

The spaceport, about 25 miles from Truth or Consequences, recently made international news when Richard Branson became the first billionaire to fly to the edge of space and back, riding aboard his own Virgin Galactic spacecraft in a suborbital flight that launched from the facility.

That flight was held to draw wealthy customers to Virgin Galactic’s space tourism business.

Up to 600 people — including a number of celebrities — already have booked flights for $250,000 per ticket.

Since resigning from his job with the spaceport, DeGregorio said in his complaint he has been reduced to taking a job as an entry-level accountant because of the McHard report’s findings. He said he has felt “depression, rage and fear” as a result.

General Assignment Reporter

Robert Nott has covered education and youth issues for the Santa Fe New Mexican. He is assigned to The New Mexican's city desk where he covers a general assignment beat.

(17) comments

Richard Reinders

So who will be in charge of dealing with this when you have your top law enforcement complicit in the allegation?

John Cook

It is worth noting that an independent forensic accounting firm was hired to investigate this situation. That firm filed an extensive report that found both the director and the Spaceport CFO at serious fault. The Chief Financial Officer is the guy in this article. He has filed a 250 page complaint and is acting as his own lawyer. Maybe he has a complaint. And maybe he doesn't. These facts suggest that neither the Governor nor anyone else except this guy are going to look bad in the end.

Emily Koyama

And of course, that is what you are fervently hoping for.

John Cook

Better stick with this guy's hopes, feelings and fears:

"Since resigning from his job with the spaceport, DeGregorio said in his complaint he has been reduced to taking a job as an entry-level accountant because of the McHard report’s findings. He said he has felt “depression, rage and fear” as a result."

Diane Gonzales

His allegations will be publicity for his You Tube channel, his website, and his book.

Emily Koyama

So wouldn't a person, who was forced out of a good job, into a low paying one, feel anger and depression? Especially if it was unjust?

Just because you feel that is motive for nefarious actions, does not mean he's lying.

Chris Mechels

Another story the SF New Mexican won't touch is the fraud involving the LEDA Recovery Act, which involves $200 million in grants, run by Keyes at EDD and Russel at NMFA. Totally done in violation of the NM Rules Act, with none of the public information and involvement required by law. We can't even see the grant applications, as IPRA (Public Records Act) requests aren't allowed. This just screams fraud. Auditor Colon and AG Balderas know about it, and won't act. Corruption runs VERY deep at the Economic Development Dept (EDD) and NMFA, with the LEA Recovery Act and the Job Trainging (JTIP) operating without oversight, and just handing out money packets to, among others, Brian Egolf. Brian does VERY well as an "unpaid" Legislator.

Tim Herrera

Reason 101 why I have never and will never vote for Michelle Lujan-Grisham. Mini-Richardson is vulnerable for a loss. Waiting to see what all her fans and defenders have to say about this situation.

Mike Johnson

[thumbup]Yep, drip, drip, drip.......

Mike Johnson

Well, I lost a bet, I bet the SFNM would not report on this.

Tim Herrera

Exactly my thought Mike. The Santa Fe New Mexican is her biggest fan.

John Cook

First, I suggest this newspaper is covering a story that should be covered no matter how frivolous this plaintiff's complaints turn out to be. But if your premise is right that the paper supports MLG then they certainly would run the story. The independent accounting firm laid out devastating facts against this guy who is calling the Governor a crook. Politicians like to be able to point to false attacks. It makes the other side look bad.

Mike Johnson

So Mr. Cook, are you suggesting this was all done by GOP operatives?

John Cook

No. Please read what I wrote, again. I am suggesting this is a set-up by Democratic operatives. Or, for those not prone to see a conspiracy in every corner, I am suggesting that this fellow is acting on his own but that his actions redound to the benefit of MLG.

Michael Grimler

Mike, nooooo...

We all know it was THE RUSSIANS!!!


Mike Johnson

I see, like a double spy......And Mr. Grimler....[thumbup]

Emily Koyama

So this may be a Smollet move? Interesting theory...

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