New Mexico Attorney General Hector Balderas on Friday charged Secretary of State Dianna Duran with embezzlement, fraud and other criminal violations, including allegations that the high-ranking Republican diverted campaign contributions for her personal use.
Documents Balderas filed in state District Court in Santa Fe outline a series of financial transactions involving Duran’s personal and campaign bank accounts and subsequent large cash withdrawals at various casinos around New Mexico.
Among the charges in the 64-count criminal information are money laundering, violations of the Campaign Practices Act, tampering with public records, conspiracy and violating the Governmental Conduct Act. As secretary of state, the 59-year-old Duran is responsible for enforcing New Mexico’s campaign expense laws and overseeing campaign finance reports.
Neither Duran nor her spokesman could be reached after the charges were filed Friday afternoon.
Her attorney, Erlinda Johnson of Albuquerque, said in an email, “We can say that in reviewing the complaint, we have identified some serious potential violations of law by the New Mexico Attorney General’s Office, in conducting the investigation. We hope this is not a politically motivated case and that the attorney general is not engaging in a selective prosecution of a political adversary. We ask the public to not jump to conclusions and we look forward to addressing the allegations in court.”
James Hallinan, a spokesman for the Democratic attorney general, said Friday, “Our office will proceed transparently by way of preliminary hearing. Through that process, all facts supporting these allegations will be presented. That is all the information that we are able to provide at this time.” A preliminary hearing for Duran has not been scheduled.
Republican Gov. Susana Martinez issued a statement Friday evening that said: “I have spoken to the Attorney General about the charges brought against the Secretary of State. These allegations are deeply troubling and concerning, and all relevant state agencies have and will continue to assist the Attorney General throughout the process. It’s important that New Mexicans understand that no one is above the law and that every New Mexican is treated equally under our system.”
The charges against Duran come weeks after Democratic State Auditor Tim Keller accused Taxation and Revenue Secretary Demesia Padilla of giving preferential treatment to a former client of her private accounting firm. That allegation was turned over to Balderas for investigation. When commenting on that case, Martinez expressed full faith in her Cabinet appointee and attacked Keller as a publicity seeker.
According to the criminal complaint against Duran, the Attorney General’s Office first received a tip about the case in July 2014, a few months before the election in which Duran won a second four-year term and Balderas won election to succeed Gary King as attorney general.
The tipster told the Attorney General’s Office that there were “numerous cash deposits made into bank accounts of Dianna J. Duran,” says the complaint, written by Special Agent Jennifer Weber. “The cash deposits appeared to be incongruent when compared to known sources of income.”
Weber said investigators observed a pattern of Duran making large deposits of cash as well as checks written as campaign contributions into her personal and campaign bank accounts. This was often followed, Weber wrote, by transfers of funds between accounts, then large withdrawals made at casinos.
In 2013, Duran withdrew more than $147,000 at various casinos around the state. In 2014, the amount was more than $282,000.
Duran earns $85,000 a year as secretary of state.
In her 2014 re-election campaign, Duran reported raising more than $356,208 in contributions and spending more than $359,000. In 2010, she raised and spent more than $195,000.
In the criminal complaint, Balderas’ staff said bank records show that Duran and her husband, Leo Barraza, had financial problems.
His investigators cited a number of instances in which Duran and her husband wrote personal checks without sufficient funds to cover them. Then, Balderas said in the complaint, Duran used campaign contributions to help pay the debts.
For instance, Duran allegedly took a $500 check from lobbyist firm Shoats and Weaks Inc. for her re-election expenses and deposited it into the joint checking account she maintained with her husband in order to help cover overdrafts last December, just weeks after her re-election as secretary of state.
Weaks and Shoats Inc. listed the contribution in its lobbyist expense report in January. Duran did not list the contribution in any campaign finance report.
The attorney general documented several other checks written as campaign contributions that ended up in Duran’s personal accounts.
In August 2014, Mack Energy, which traditionally makes large contributions to Republican campaigns, gave Duran’s campaign $5,200, the maximum allowed by state law. But Duran’s campaign finance report showed a contribution from Mack Energy of only $2,900.
In April 2014, Mack Energy wrote a check to Duran’s re-election campaign for $7,500. But, Weber wrote, this check appeared as three separate contributions, two from Mack, for $2,300 and $5,200, plus one for $7,500 from an unidentified political action committee, which listed Mack’s post office box in Artesia. The company gave Duran a total of $12,700 for her campaign last year, though only $10,400 showed up in her reports.
There were other similar instances involving lesser campaign contributions listed in the criminal complaint.
The criminal complaint also says Duran reported campaign expenditures that were not actually made. She reported two expenditures of $1,827 paid to Kore Technologies in September 2014. However, there was only one actual payment in that amount.
In March 2010, she listed a $600 expenditure to a man named Sean Davis in Tularosa for “equipment and work on campaign.” But Davis told Weber he didn’t work on Duran’s campaign and was never paid.
And in November 2014, Duran’s husband was issued a check for $2,850 from the campaign, which was deposited into his joint account with Duran. Duran’s next campaign finance report listed a “travel reimbursement” to Barraza for $986. There were several other checks issued to Barraza for travel expenses and other reimbursements, totaling $2,850,which the attorney general says amounts to embezzlement on Duran’s part.
The complaint said Duran also filed several campaign finance reports, going back to 2011, that indicated there was “no activity” when there actually were cash withdrawals being made. For these instances, she was charged with several counts of falsifying campaign finance reports and falsifying public records.
Duran was a state senator from 1993 until her election as secretary of state in 2010. Before that, she served two terms as the Otero County clerk.