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.