An official with the New Mexico Public Regulation Commission ordered state Attorney General Hector Balderas and others to respond to accusations of conflicts of interest related to a merger proposal by two electric utilities.
Commission hearing examiner Ashley Schannauer said Tuesday that Balderas, Public Service Company of New Mexico, Avangrid and Bernalillo County must respond to those claims.
The accusations came from Mariel Nanasi of New Energy Economy, a Santa Fe-based critic of the merger proposal between PNM and Avangrid. Connecticut-based Avangrid is owned by a Spanish company, Iberdrola.
Nanasi’s allegation stems in large part from Iberdrola’s hiring early this year of Marcus Rael, a New Mexico acquaintance of Balderas who gets considerable legal work outsourced to him by the Attorney General’s Office, Nanasi said. Balderas gave his formal approval to the merger proposal in the spring.
Nanasi said Rael also does legal work for Bernalillo County, which has been one of the primary “intervenors,” or critics, of the merger proposal.
Balderas said in a written statement to The New Mexican on Tuesday afternoon that “there is no conflict of interest” and “the suggestion there is one is a reckless attempt by New Energy Economy to inappropriately influence” the outcome of the merger proposal.
He also said New Energy Economy aims to create a “circus act sideshow” to distract from the fact that many environmental, Native American, labor and other groups support the proposal.
Nanasi said Tuesday that Bernalillo County recently has “reached an agreement on a lot of stuff” in the merger proposal, but not everything.
Schannauer, who is a quasi-judge in complex Public Regulation Commission cases, wrote in the Tuesday order that Balderas, Bernalillo County, Avangrid and PNM should state by Friday “whether the alleged conflicts of interest exist and whether the conflicts are resolved.”
Avangrid and PNM said in a joint written statement that they have “no issues or concerns with any potential conflict resulting from Marcus Rael representing” the Attorney General’s Office, Iberdrola or Bernalillo County “on different unrelated matters.”
The statement also said the sole issue is “New Energy Economy trying to distract New Mexicans from evaluating the merger’s benefits on its merits” to further New Energy Economy’s interests.
Rael also responded, writing in an email he represents the merger applicants, Attorney General’s Office and Bernalillo County in “unrelated matters and the allegations are not factually accurate or logically relevant to the issues in this merger.”
Rael said he has acted legally and ethically and is “proud of the work I have done for my clients across New Mexico for the past two decades.”
Nanasi, on the other hand, wrote that Rael “has been a recipient of enormous largesse” from the attorney general through contracts to do legal work for the state. She said it isn’t “happenstance” that Iberdrola hired a lawyer with connections to the attorney general to negotiate Balderas’ approval for the merger proposal.
She also referred to the fact that two current Iberdrola executives are being investigated by Spanish authorities for alleged wrongdoing in that country.
“Iberdrola is not content to let regulators come to merits-based decisions,” she wrote. Nanasi’s statement Tuesday said the appearance of impropriety, conflict of interest, “and what may be fraud, waste and abuse in government contracting [are] at the heart of the Balderas/Rael relationship.”
Nanasi additionally has filed complaints with three state entities concerning the contracts Rael has received from the Attorney General’s Office since 2016. The agencies are the Office of the State Auditor, the State Ethics Commission and the Disciplinary Board of the New Mexico Supreme Court.