J. Miles Hanisee, a judge on the New Mexico Court of Appeals, entered his first election campaign accustomed to courtroom combat, not political warfare. So, Hanisee said, he followed the lead of his media strategist, Jay McCleskey, who created a front company that would receive payments from the judge’s publicly financed campaign and then spend the money in the homestretch of the race, mostly on television advertising.
This tactic had two objectives, Hanisee said. One was to take his opponent by surprise. She certainly would recognize the name of McCleskey’s own media company but not M3 Placement. That meant she wouldn’t see Hanisee’s television ad blitz coming or have any chance of responding to it. The other goal for Hanisee, he said, was to separate himself from the famous — some say infamous — McCleskey name that could harm a candidate who wanted to spend the rest of his life in the sober black robe of a judge.
And so it was that Hanisee and his campaign team listed M3 Placement as the company that received a total of $164,494 to handle 2012 campaign duties. Anybody trying to find details about the business would be chasing a ghost. There is no record of the company listed with the corporations bureau of the Secretary of State’s Office. There are no records of it at the Bernalillo County Clerk’s Office or at the city of Albuquerque’s treasurer’s office. It isn’t listed in the phone book, and it doesn’t have a website.
In fact, the only public trace of the company is in campaign filings, which list an Albuquerque post office box for it and show it collecting more than $210,000, most of that in the 2012 election cycle. All of the money came from Hanisee and a political action committee, Reform New Mexico Now, controlled by McCleskey, an investigation by The New Mexican shows.
M3 wasn’t alone. Another phantom company that at one point shared a post office box with M3 and an address with McCleskey’s Albuquerque office also pulled in more than $200,000. Like M3 Placement, which also went by the name M3 Productions, the other company was known by various names in campaign filings, including CD Productions and C.D. Productions and PR. And like M3, all of CD’s money came from a political action committee, Susana PAC, controlled by McCleskey and two candidates that hired McCleskey — Hanisee and Gov. Susana Martinez, who also hired him as her chief political consultant.
The use of the front companies raises questions about the sizable influence McCleskey had over huge piles of money in various campaigns and political action committees for which he worked, all with little or no scrutiny. The FBI is now investigating different fundraising vehicles used by McCleskey and the Martinez political campaign, though it is unknown whether M3 and CD are subjects of the probe.
The FBI won’t confirm or deny the existence of an investigation, although Martinez confirmed the investigation last week after The New Mexican revealed that the FBI has spent several months talking to Republican officials in the state about Martinez’s campaign fundraising activities.
McCleskey on Friday did not answer requests for a response. He hasn’t responded to any of several phone calls or emails from The New Mexican since last week concerning the federal criminal investigation.
A spokesman for Martinez also didn’t respond to phone calls or email.
An analysis of campaign records by New Mexico In Depth last week found that New Mexico candidates and political action committees have paid more than $7 million in consulting fees and media buys to Jay McCleskey and his company, McCleskey Media Strategies, since early 2011. But that analysis did not include money that went to CD and M3 because campaign filings do not show any obvious connection between the companies and McCleskey, apart from two instances when CD used the same address as McCleskey’s office.
Hanisee said he knew McCleskey controlled M3 Placement, and that the company’s operator and operations were being disguised to throw off the opposition and the public, tactics he approved of. But Hanisee said he didn’t know that the front company was never incorporated — and never thought to ask.
Hanisee, 47, initially was appointed to the Court of Appeals in 2011 by Martinez. Knowing little about campaigns except that he would have to run one to hold onto his judgeship, Hanisee said he looked for a media strategist. He hit it off with McCleskey and liked his suggested strategy of pouring money into network television ads.
Hanisee lost his election bid in 2012 but quickly was appointed again by Martinez to another vacancy on the Court of Appeals. In seeking election again in 2014, Hanisee again turned to McCleskey. He paid McCleskey’s M3 Productions $12,542 in his successful 2014 race.
The judge admitted that a reason for giving the money to a shell company instead of to McCleskey’s own company was keeping the controversial operative’s name out of press reports. He said he wanted a positive campaign about himself without McCleskey, known for his slash-and-burn campaign tactics, being mentioned in any news coverage.
Hanisee told a reporter that questions about the ethics of using a phantom company like M3 Productions are legitimate. But as a candidate in unfamiliar territory, Hanisee said, he was trying to win a seat, so he couldn’t pay attention to every aspect of McCleskey’s operation.
“You follow the rules as you understand them,” the judge said. He said he was protecting “a confidential strategy to win an election in a difficult environment.”
He told a reporter, “You make a good point” about McCleskey’s shell companies creating obstructions to the public following campaign money. “I don’t know how you go back and fix that.”
Hanisee said neither the FBI nor any law enforcement agency has interviewed him about McCleskey. “I haven’t been called by anyone, despite my having worked in the U.S. Attorney’s Office for a decade,” Hanisee said.
But Hanisee said his loyalty to McCleskey has not diminished with reports of an FBI investigation. “I don’t want to distance myself from the media strategist who got me elected,” Hanisee said.
Gina M. Maestas, treasurer of Hanisee’s campaign in 2012, said her records show that she wrote a check to the company M3 Placement in October 2012. She said its listed address was P.O. Box 36023 in Albuquerque.
Maestas, a Democrat, said she realized about the time she wrote the check that McCleskey was running M3 Placement. Like Hanisee, she said it was a smart move to shield the level of McCleskey’s involvement with the campaign from people poring over expense reports. McCleskey is a controversial figure and an unpopular one among many Democrats, Maestas said. Hanisee wanted to keep voters focused on his record as an attorney and a judge, not on his association with McCleskey, she said.
In fact, McCleskey never appeared in Hanisee’s 2012 campaign filings and only appeared late in his 2014 race.
Hanisee wasn’t alone in giving money to M3 Placement. Reform New Mexico Now paid M3 Placement — or M3 Productions, as it once was listed — nearly $34,000.
Reform New Mexico also paid CD Productions $17,655 in 2012. CD and M3 shared a post office box at times, and when they didn’t, their boxes were only a few feet apart in the same Albuquerque post office. Like M3, there is no record of CD with the corporations bureau of the Secretary of State’s Office, nor with the Bernalillo County Clerk’s Office or the city of Albuquerque’s treasurer’s office. A search of national corporation databases also found no trace of the companies. (There is a Corrales-based video service called C/D Productions. But co-owner Cindy Barchus said Friday that the company hasn’t done any work for any political campaigns.)
Ben Cloutier, a spokesman with the state’s Taxation and Revenue Department, did not return an email Friday asking if either CD or M3 had a taxpayer identification number.
Alexa Schirtzinger, a former editor of the Santa Fe Reporter, first questioned the existence of CD Productions in a June 20, 2012, Reporter article. The story mentioned McCleskey but did not show a clear connection between him and the company and did not name M3. But after the article appeared, money stopped flowing through CD. It kept going to M3.
CD Productions initially appeared in Martinez’s first campaign finance report after she was sworn in as governor, filed in April 2011. There is a $5,250 expense for equipment rental on Feb. 4, 2011, and a $1,500 expense for a “media ad.”
The address of the company was listed in that filing as 6100 Uptown Blvd. NE, Suite 590, the same address as McCleskey Media Strategies. (On that report, the company is listed as “C.D. Productions and Pr.”)
Soon after that, the political action committee called Susana PAC, which formed in February 2011 with McCleskey listed as director, became CD Productions’ best customer.
Between May 2011 and May 2012, the governor’s political action committee paid $154,000 to the company. On campaign finance reports, Susana PAC officials eventually listed a new address for CD Productions, P.O. Box 30081 in Albuquerque, just two boxes down in the same postal center from one of the two used by M3 Productions. In a payment by Hanisee to CD, the company is listed at P.O. Box 30083, the same as M3’s in various filings.
Susana PAC reported paying CD for a variety of services, including office supplies, printing and mailing, advertising and demographic research.
Susana PAC’s stated purpose was to “promote the elections of reform-minded candidates in New Mexico and their agendas.” But backing Martinez-friendly candidates has not been Susana PAC’s only activity. It also paid for such things as travel for the governor and her political team, fundraising and direct mailings touting Martinez’s performance.
In addition to paying CD, Susana PAC paid McCleskey’s firm, McCleskey Media Strategies, more than $481,000 and another $4,300 to McCleskey himself for travel expenses and reimbursements. The committee also paid more than $210,000 to Public Opinion Strategies, a polling and research firm where McCleskey’s wife, Nicole, is a partner. It also paid Nicole McCleskey more than $6,000 for travel expenses and reimbursements.
McCleskey Media and Public Opinion Strategies also raked in $380,716 from Reform New Mexico Now, which emerged shortly before the 2012 primary.
Even more than Susana PAC, Reform New Mexico focused on helping other candidates by raising unlimited cash to finance a surprise advertising blitz in the 2012 primary elections.
Jay McCleskey’s office is listed on some of the committee’s paperwork, but there’s little else connecting the group to him. In Reform New Mexico Now’s 14 public campaign finance reports filed with the Secretary of State’s Office, the telephone number for the committee is listed as “505” with no additional digits. The committee also uses “505” as the telephone number for its treasurer, Anne Perez. The only officer listed on the report, she provided an email, the address of a Las Cruces home and a signature. Multiple attempts to reach her were unsuccessful.
Jay McCleskey has never publicly disputed that he controlled the PAC. In a rare television interview with McCleskey on Nov. 9, 2012, KNME reporter Matt Grubs talked to McCleskey about Reform New Mexico Now. “You’re running this PAC,” Grubs said. McCleskey did not dispute it and went on to answer questions about it.
In all, Reform New Mexico Now had raised more than $2.4 million as of its last campaign filing date in April 2013. Susana PAC had raised $2.29 million as of its latest filing in October.
While Hanisee said he used CD and M3 to shield McCleskey’s involvement in his campaign for the judge’s seat, it’s unclear why Reform New Mexico, Susana PAC and then-candidate Martinez would have used the phantom firms because their associations with McCleskey were already well known.
An accountant hired to handle the books for Susana PAC for two years said in an interview last week that committee officials never provided him copies of checks or invoices to help him enter data into campaign finance software called Aristotle or reconcile bank statements with the committee’s ledgers once per month “to make sure everything matched up.”
Philip Pearce — brother of New Mexico Republican Congressman Steve Pearce — said he began accounting work for Susana PAC through his company, File Right, in 2011 but left at the end of 2013 after being told the committee would use a firm from Albuquerque instead.
Philip Pearce said FBI agents have interviewed him about the committee, but he declined to say when or what questions they asked.
Pearce said the practices of Susana PAC differed from his current accounting work for GOAL WestPAC — a Republican-leaning independent expenditure group — whose officials allow him to review copies of original records like checks, as well as information to verify addresses of donors or vendors.
But officials from McCleskey’s office did not give Pearce any authority to enter the campaign finance reports into the Secretary of State’s Office software, he said.
Pearce said that on one occasion, he contacted McCleskey Media Strategies officials about a discrepancy between expenditures made by Susana PAC on a campaign finance report filed with the Secretary of State’s Office and his own records of the committee’s spending. Missing from the report, he said, was a $53.27 charge by Susana PAC for a toilet rotor.
He said a young woman at McCleskey’s firm said, “Well, Jay doesn’t want that in there.”
“And I said, ‘Well, too bad. You spent the money,’ ” Pearce said.
Susana PAC officials from McCleskey Media Strategies “gave me pretty basic information,” Pearce said. But he had no way of verifying addresses of the committee’s donors or vendors, he said.
“A lot of times I would have to go back to them and say, ‘Give me an address for these people,’ ” Pearce said.
Pearce said he attempted unsuccessfully to verify the existence of some companies paid by Susana PAC. One did not cash a Susana PAC check for months, raising a red flag for Pearce. So he called an official at McCleskey Media Strategies to inquire about the company.
“And the response was, ‘Oh, that’s us.’ And I said, ‘What do you mean, ‘That’s us’?” Pearce said.
Pearce said he couldn’t recall now the name of the company he was inquiring about. But he recalled the reply: “Well, that’s one of Jay’s companies.”
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Correction: A previous version of this story incorrectly spelled Matt Grubs last name. The error has been corrected