In the summer of 2013, torrential rains hammered San Miguel County. Flooding washed some roads away and buried others in debris. A wood trestle bridge crossing a major arroyo was so badly damaged that county officials closed it, forcing dozens of residents living east of Las Vegas, N.M., to find alternate routes, sometimes going miles out of their way. Local officials estimated the damages at more than a half-million dollars, far more than the cash-strapped county could afford.

Gov. Susana Martinez quickly issued disaster declarations for San Miguel and several other counties. The declaration should have cleared the way for the state Department of Homeland Security and Emergency Management to assess the damage and begin issuing checks to the flood-damaged counties for repairs. The whole process should have taken just weeks.

Nearly a year later, San Miguel County was still waiting for its relief funds to arrive.

“It was almost a year after the disaster had already been declared by the governor before I could even get the department to come out and assess the August damage,” Dennis English, San Miguel County’s emergency manager, said in an interview. “Then we had more damage in September.”

The county’s experience with the state Homeland Security and Emergency Management Department wasn’t an aberration. Internal reports, emails, audits and interviews with current and former employees reveal an agency rife with dysfunction and overwhelmed by even relatively modest requests for relief. The department is responsible for responding to fires, pandemics and other disasters, as well as keeping tabs on terrorist threats to the state.

Former staff members and people from other agencies who have dealt with the department say it has suffered from a chaotic culture and administrative instability since it was founded seven years ago. But the last two years have been particularly bad under former department Secretary Gregory A. Myers and Deputy Secretary Anita Tallarico Statman, these people say.

Their assertions are supported by state audits, federal reports, emails and a whistleblower lawsuit depicting personnel controversies, questionable financial accounting practices, alleged violations of state procurement regulations and an increasingly demoralized staff.

Myers, who became the fourth person to lead the department when he was appointed in October 2011, left the post in late November. Statman resigned Dec. 5. Myers did not respond to requests for an interview prior to leaving.

In an interview Friday, Statman defended her two-and-a-half-year tenure at the agency, saying she had tried to make it more professional.

“I think people are used to doing what they’ve been doing in any situation,” she said. “I think we all need a little nudge every once in a while. Some people are receptive to that and some are not.”

But some former employees say working conditions were unsustainable under Statman, whom many say largely ran the department even while Myers was the titular head, a charge Statman denies.

“It has never been stable, but it’s been hellacious in the last two years,” said Paula Flores, a former grants supervisor who left the department in August for a new job with the state.

The internal problems impacted more than just the staff, Flores said.

“All the pettiness that was going on affected every jurisdiction because the local governments weren’t getting what they needed from the state,” she said.

That sense of frustration could be seen in an April 11 letter from San Miguel County Manager Les Montoya to State Auditor Hector Balderas and Myers.

At the time, the county still had not received relief funds for the 2013 flooding. Montoya wrote in the letter that department officials had informed him they were “overwhelmed” with the amount of federal grants coming in for disasters across the state.

“It was stated they do not possess the manpower necessary to administer these funds in an accountable and timely basis,” he wrote. The delays, he added, “create an unsafe situation for many residents of San Miguel County.”

The Governor’s Office defended the agency.

“In the last four years, the Department has leveraged resources from across the state and engaged FEMA to ensure recovery projects were done quickly and correctly,” Michael Lonergan, a spokesman for the governor, said in an email Friday. “The Department will continue working with local and federal officials to help in ongoing recovery efforts.”

In late November, the governor appointed M. Jay Mitchell, former Angel Fire village manager, as homeland security secretary-designate. A retired Air Force colonel with more than 26 years of military service, Mitchell, who must still be confirmed by the state Senate, said he has been “extremely impressed” by his staff in the short time he’s been with the department but that he is taking a close look at issues impacting the agency.

“I have been actively working with senior level staff to identify areas where we can improve and understand the existing issues with the department, and that’s an on-going process,” he said in an email Friday.

Managing emergencies

Lawmakers in 2007 rolled together the Office of Homeland Security and the Emergency Management Division, which had been under the state’s Department of Public Safety.

The goal was a department that could coordinate emergency and disaster relief efforts with local, state and federal agencies; manage federal and state disaster funds; provide training to emergency managers and analyze security threats.

Most importantly for local governments, the department oversees federal and state disaster money. At any time, the department manages between $30 million and $60 million in federal grants alone, said Erica Cummings, who managed federal grants at the department for years.

It has staff on call 24 hours a day, seven days a week. It wasn’t an easy department to work for, Cummings said. “The demand is high. You have to acclimate to different situations quickly. You have to be on call,” she said.

The responsibilities were big for a small department with only 66 staff positions, many of which are unfilled. The turnover rate has been high, and 20 or more positions have been vacant in each of the last two years — a greater than 30 percent vacancy rate, which is about twice the average vacancy rate for state agencies, according to reports filed with the Legislative Finance Committee.

Overall, the department had a core of solid, capable staff, Flores, Cummings and other employees said. What it lacked was consistent leadership with good management skills, they said.

As the administration began doing things some employees thought were wrong, their frustrations reached a breaking point.

“Every agency has personnel issues, but rarely to the extent we had in the last two years,” said Cummings, who resigned her position in March and took a different state job out of frustration.

Both women have 17 years in state government experience and were certified to handle state and federal grants. They were both promoted about the time Myers and Statman took the helm of the department. They thought they would finish out their careers at the Department of Homeland Security and Emergency Management.

Flores had worked in the department since its inception when she was placed on administrative leave in June in what she believes was retaliation for raising concerns about questionable financial practices. The State Personnel Office later told Homeland Security it either needed to prove a case against her or let her return to work, but Flores already had found another state job by then and decided not to return, she said.

She said she agreed to speak to The New Mexican because “I finally reached the sheer frustration point with gross mismanagement. I watched the administration do things where I thought, ‘On what planet is that legal or acceptable?’ ”

Costly delays

Local governments in New Mexico often don’t have the funds to pay the entire cost of fixing public works damaged by fires, floods or other natural disasters. Once the governor or the U.S. president declares a disaster, local governments can apply for grant money made available under the executive disaster orders.

After the initial floods in July and August 2013 prompted the governor’s state disaster declaration, English of San Miguel County figured it would take Homeland Security a couple of weeks to send out inspectors to assess the damage. When they didn’t come, he was worried. Then more severe floods hit in September.

“They would not let our recovery staff go out there,” said an official still in the department who asked not to be identified for fear of retaliation. The official said the department was in the midst of personnel conflicts with some key people involved in disaster recovery.

“So no one went out to assess the damage,” the official said. Officials with the Federal Emergency Management Agency inspected damage from the September 2013 floods under a presidential disaster order, but the state field inspectors who normally would have accompanied them weren’t there.

San Miguel County spent $87,280 of its own money for repairs. By March 2014, it still hadn’t been reimbursed or received funds to complete repairs, and Montoya sent Myers an angry letter. “The fact this required site visit has not occurred concerns us greatly,” he wrote. “I plead for your assistance in this matter.” He followed up with letters to Balderas and Myers in April.

The site visit finally occurred in July 2014, English said.

Other county emergency managers expressed similar frustrations with the department.

Don Cooper, the longtime emergency manager for San Juan County, said he’s always received financial help from the department when he’s needed it, but the payments have been delayed. He said the problem is that experienced people keep leaving the department.

“Some of the leadership has made that worse,” he said. “It’s been difficult for good people to stay.”

Santa Clara Pueblo also had problems getting state and federal funds released through the department after fires and floods devastated dams and spillways on pueblo land in 2012 and 2013. A department official confirmed state and federal funds for the pueblo had been delayed longer than they should have been. Sen. Tom Udall, D-N.M. supported a federal measure passed in November 2013 that allowed the pueblo to skip the state altogether and go directly to the federal government for disaster aid and speed up the funding.

Disaster funds weren’t the only payments delayed.

At least twice in 2014, the department was more than two months late paying off credit cards used by New Mexico’s Urban Search and Rescue team. The team, one of only 28 in the country certified by FEMA, responds to national disasters such as 9/11 and Hurricane Katrina, helping dig people out of collapsed buildings. The team has to be ready to deploy with 24 hours’ notice and relies on state credit cards to pay for hotel rooms, meals, gas and other expenses.

State regulations require credit cards to be paid within 30 days. FEMA put the team on probation in the last year due to the late payments as well as other issues related to training and readiness found in federal audits. Those issues have been resolved, and the team is no longer on probation.

For months after Cummings left, positions critical to processing payments and accounting for expenditures were left unfilled. “They don’t have a person who can draw. They don’t have a person who can do payables. They don’t have a person who can do finance. They don’t have a person who can do procurements or contracts because everyone has left or been fired,” Cummings said.

Some of those positions have since been filled. But as of Dec. 1, the department had 22 vacancies, including eight in administrative services, which handles the finances and grant payments, according to the department’s latest organizational report.

Questionable accounting

Flores and Cummings, backed by documents from Homeland Security that were obtained through an Inspection of Public Records Act request, say the department tried to use disaster relief money meant for counties to contract private companies to complete jobs outside the scope of the governor’s disaster declaration.

It was not the contractors’ fault, said the two former employees. Statman, who came from private industry, preferred hiring private contractors and wanted staff to make that happen, Flores said. The private contractors were used to fill some of the many vacancies in the department’s staff that dated back more than a year.

In one case, the department hired the Albuquerque firm Accounting and Consulting Group for business services to resolve problems in prior year financial audits. The company was hired Feb. 27 under a general services agreement for $138,815.

Flores questioned the payments. Her new boss, the chief information officer who was made acting director of support services, told her in an email that he was “concerned with your seeming reluctance to accept and follow the chief financial officer’s guidance in matters pertaining to the grant section operations.”

He told her she had to cooperate or she would be found insubordinate and could end up getting fired. Flores replied that she was simply trying to make sure the company could be paid properly out of grant money.

On May 20, Myers asked the state General Services Department to expand the contractor’s scope of work and double the amount to $305,000.

But Myers had only days before been told by the state Department of Finance and Administration that the purchase order under which the contractors was being paid had been closed. State Controller Ricky A. Bejarano told Myers in an email that the purchase order should not have been approved without a professional services contract in place. Bejarano told Myers and Statman again in June that the company couldn’t be paid for services without a contract in place.

In another situation, the department tried to pay a contractor incorrectly from funds made available through the governor’s disaster declarations, according to Cummings, Flores and documents obtained from Homeland Security through an information request. The funds are specifically to help communities with temporary shelter, health care, food and transportation, or other actions to protect public health, safety and welfare, and to minimize economic harm.

Once the basic emergency is over, the funds are supposed to be closed by the department, and any remaining money is supposed to be returned to the state.

URS Group, a Texas company, was hired by the department in April for disaster recovery planning, preparing grants, updating grant spreadsheets and “other duties as assigned.” Homeland Security sought to pay the company $150,000 for services out of a 2012 disaster declaration that was for the Little Bear Fire that burned thousands of acres near Ruidoso and ruined Bonito Lake.

The department also sought to pay the company more than $160,000 for technical services out of the governor’s September 2013 disaster declaration for flooding around the state. It was some of the same money San Miguel County had been asking to access for months to help repair bridges and roads.

Statman acknowledged that the department initially tried to use those grant funds to pay the contractors but said she believes that in the end, different funds were used.

Apart from how the contractors were paid, state records and current and former agency employees say the department’s insistence on using private contractors rather than filling vacancies was costing the state more money. Contractors with ACG and URS were paid between $66.30 and $222.58 per hour — more than twice what the state would have paid its own employees for the same work.

“That’s stuff we should be doing as part of our day-to-day mission,” said one department official, who asked not to be named.

Many of the accounting problems identified by Flores and Cummings also were highlighted by FEMA. In February, FEMA told the department about several problems found during a March 2012 site visit to review the grants program, such as not correctly accounting for work hours tied to specific grants.

In June, FEMA issued a letter saying all audit findings had been resolved, although Flores and Cummings said they continued to see problems as they were leaving the agency.

Personnel problems

In the last two years, the department has faced an investigation by the Department of Labor for alleged violations of the federal Uniformed Services Employment and Reemployment Rights law, a whistleblower lawsuit from a demoted employee alleging retaliation and numerous complaints filed by employees with the State Personnel Office.

Victor Marquez, a National Guardsman and former security analyst with the department, resigned after he allegedly was harassed and retaliated against by a former human resources manager, the department’s general counsel George Heidke and Statman over how he accounted for his military leave time for National Guard training, among other issues.

In a District Court hearing in 2013, Marquez, who had resigned from the department, unsuccessfully sought a restraining order against Heidke. During the hearing, other security analysts testified they also had been harassed or intimidated by Heidke. Some of those employees also filed complaints with the New Mexico Attorney General’s Office and the State Personnel Office. The status of those complaints as of Friday was not known.

Marquez’s former boss, Richard Clark, a retired National Guardsman, said he was wrongfully demoted as head of the Intelligence and Security Bureau after he refused Statman’s order to reprimand Marquez. His whistleblower lawsuit, pending before the First District Court in Santa Fe, asks that he be reinstated with back wages after he was allegedly retaliated against by Statman for “providing support and testimony in favor of a National Guard service member.”

In his lawsuit, Clark alleges Statman and Myers created such a hostile work environment that Marquez had no choice but to resign. When Clark testified about what happened to a Homeland Security investigator and a federal investigator, he says he was then targeted as well. Clark alleges Statman went so far as to try and persuade federal authorities to pull his security clearance.

The department has denied the allegations and says in court documents that Clark’s demotion was due to his “misconduct, poor job performance and other legitimate business purposes.” Statman declined to comment on the case because it is in litigation.

In another case, Donald Scott, the department’s Response and Recovery Bureau chief, was suspended in 2012 for reasons that remain unclear. The State Personnel Board overturned his suspension in 2013, and the department was ordered to provide him with back pay. Scott, the state and the department would not comment on why he was suspended.

The high turnover rate at the department and the number of vacancies, some now filled by private contractors, point to ongoing problems with finding and retaining staff.

Myers seemed to recognize the problems, or at least the potential for political fallout, in a January request to the State Personnel Office, asking that his human resources manager be given a higher classification with more pay to avoid putting the state “at risk for more disgruntled employees, lawsuits, letters to The New Mexican and the Attorney General’s Office.”

“Or worse,” Myers added, “a dysfunctional emergency response to a disaster facing New Mexicans that will put the state’s executive leadership front and center in an election year.”

Contact Staci Matlock and 986-3055 or smatlock@sfnewmexican.com.