Two Albuquerque law firms will represent Spaceport America’s former chief financial officer in his whistleblower complaint that accuses state officials of defrauding taxpayers of $200 million and retaliating against him for bringing mismanagement to light.
Zach DeGregorio, who filed his initial complaint two weeks ago in District Court with no attorney, is now represented by Western Agriculture, Resource and Business Advocates LLP and the Law Offices of Marshall J. Ray.
“This is probably one of the most well-documented and one of the more egregious retaliations against a whistleblower,” said attorney Blair Dunn. “He did everything he was supposed to do as a whistleblower. In response to that, they turned around and opened an investigation and made him a subject of that investigation.”
Upper managers forced DeGregorio to resign, Dunn said.
Representatives for the spaceport and the Governor’s Office have said they won’t comment on a pending court case.
DeGregorio’s lawsuit was revised so it better adheres to standards for presenting whistleblower complaints, such as limiting the legal action to the direct employer rather than suing all the entities and leaders linked to that employer, Dunn said.
DeGregorio had previously sued the state of New Mexico and sought to make Gov. Michelle Lujan Grisham, state Economic Development Secretary Alicia J. Keyes and other state officials defendants, Dunn said.
Suing everyone who might’ve taken part in retaliation is not proper for whistleblower cases, Dunn said.
Although not an employer, State Auditor Brian Colón is named as a defendant in the lawsuit, which alleges he conspired to commit procurement and securities fraud and violated whistleblower laws.
Lujan Grisham, Keyes, state Attorney General Hector Balderas and some spaceport managers and contractors remain in the lawsuit’s narrative describing their alleged improprieties, Dunn said.
DeGregorio, who left the spaceport in June 2020, had sought about $11 million in damages, but listing dollar amounts is not typically done in whistleblower cases, Dunn said.
The lawsuit paints a complex picture 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 bonding power.
The spaceport, near Truth or Consequences, cost roughly $200 million to build. The state paid for two-thirds of it, and the rest was covered by a gross receipts tax approved by Sierra and Doña Ana counties.
DeGregorio contends in his complaint allowing a private business to handle the refinancing could have saved the state tens of millions of dollars, if not more.
DeGregorio’s lawsuit comes about 13 months after Colón released a scathing report that said the spaceport’s former director, Dan Hicks, mishandled funds — including gross receipts tax revenue — and possibly violated laws and ethics codes.
Hicks was later fired.
That report was initiated at least in part by DeGregorio, who filed a complaint accusing Hicks of pressuring him to ignore procedures meant to account for public spending.
Yet state officials treated DeGregorio as if he colluded with Hicks — despite his insistence he was at odds with the former director — and they produced an erroneous audit to back their accusations, Dunn said.
Even if DeGregorio doesn’t receive damages, he still brought the mismanagement to light to increase government accountability, the ultimate aim of a whistleblower complaint, Dunn said.
“It’s not every day that someone will take on this type of a huge political fight,” Dunn said.