New Mexico Lawmaker Bringing Home the Bacon … But for Whom?
With Help from the Governor and Economic Development Secretary, Patty Lundstrom Funded Her Non-profit with Millions in State and Federal Grants, and Targeted Legislation … Delivered a $30 Million Road, Paid for with State Funds, Benefiting a Company Owned by a Major Campaign Contributing Developer … All While She Was Drawing a Six-Figure Salary – Also Paid for with Public Dollars.
“If I sponsor and/or support legislation of benefit to my community, I’m doing what every other legislator does: advocate on behalf of the populations they represent and “bring home the bacon” to the highest and best benefit possible within the system.”
– Representative Patty Lundstrom, Gallup, New Mexico
Background –
New Mexico is considered a poor state in need of good paying jobs.
Rural, northwest New Mexico, including the greater Gallup area, is particularly in need of economic help – jobs, housing, better roads and bridges, and water infrastructure.
The Candle has reviewed millions of public dollars spent by state agencies on businesses and organizations promising job creation and so-called economic development. This is the first in a series of articles exploring how those public resources are being spent.
After years it is fair to ask: How long do New Mexicans need to wait before they see real results?
Further reporting will zero in on the $30 million spent on building the five mile long, four-lane road known as Carbon Coal Road; Rhino Health, LLC.; and Tri-State Generation and Transmission Association, Inc.
Legislator Derives Substantial Personal Income from Economic Development Nonprofit She Helped Create With Federal, State and Local Funds.
New Mexico State Representative Patricia “Patty” Lundstrom is “the founding Executive Director of the Greater Gallup Economic Development Corporation.”
The Greater Gallup Economic Development Corporation (GGEDC) is located in Gallup, New Mexico and is a so-called private nonprofit corporation, created in February of 2012.
In its own words, it was created to “increase development in the economically and socially depressed areas of Gallup and McKinley County New Mexico.”
According to its website, “It is the mission of the GGEDC to drive economic growth through building on local assets and strategic partnering to target attraction, retention & expansion of industrial employers that provide economic-base jobs in the Gallup-McKinley County area, and to support & promote a business-friendly environment.“
The GGEDC website also highlights its founding Director’s career, “As a New Mexico State Legislator since 2001, Ms. Lundstrom has an intimate understanding of state government with expert level knowledge in public budget and finance, as well as the full range of public and private sector issues affecting economic development in New Mexico.”
It is evident from press releases and other promotional documents and accounts, along with comments from Gallup area residents, that Lundstrom is in control of the GGEDC.
Since its founding by Lundstrom, and a handful of Gallup area businessmen, according to annual reports filed with the federal government, “the person who possesses the organization’s books and records” is identified as Patricia Lundstrom.
From reviewing public records, it appears Lundstrom’s salary is basically underwritten by public dollars.
In the annual financial reports known generally as “Form 990’s,” filed with the federal government by so-called nonprofit organizations, the GGEDC records reveal Representative Lundstrom’s salary as follows:
$92,070 – in its reporting year of July 2018 through June 2019
$106,716 – in its reporting year of July 2019 through June 2020
$112,973 – in its reporting year of July 2020 through June 2021
$117,216 – in its reporting year of July 2021 through June 2022
$139,156 – in its reporting year of July 2022 through June 2023
(Prior to 2018/19, her GGEDC salary was not individually reported on the Form 990’s.)
Lundstrom has spent decades serving in government, initially as the executive director of the federally funded Northwest New Mexico Council of Governments (1985-2009) and as a member of the House of Representatives since 2001.
The Financial Disclosure Reports on the NM Secretary of State’s website – which only date from 2013 to the current year – indicate that Lundstrom is also a “retiree of PERA” – the Public Employees Retirement Association – from which she collects a retirement likely based upon her years working for the Northwest New Mexico Council of Governments.
Also of note, as a State Representative, Lundstrom is entitled to participate in another retirement plan – the lucrative New Mexico Legislative Retirement Plan – when she leaves the legislature.
Nonprofit Receives More than $4.5 Million In Government Grants.
The same Form 990’s referred to above, reveal that since 2012, of the $6,141,512 the GGEDC lists as revenue received, more than $5,750,000 is from “government grants,” (including a large “donation” derived via legislation sponsored by Lundstrom).
In other words, more than 93% of Lundstrom’s non-profit’s income over the past decade is money from state and federal programs – some of it given directly to the GGEDC; some of it coming through grants provided to local governments, and subcontracted to the GGEDC.
For example, according to at least one document reviewed by The Candle, the City of Gallup acting as what is known as a “fiscal agent” for a federal, US EDA Grant of $600,000 (with a local match of $150,000), contracted with Lundstrom’s GGEDC for an original $250,000 plus an additional $67,000 for planning work.
The nonprofit also grew its net assets from $438 in 2012, to $1,864,743 in 2023.
The Candle interviewed Lundstrom on two occasions and also submitted a series of questions to her regarding a number of issues reported in this article and in the upcoming articles regarding the GGEDC and its relationship with the state representative.
Lundstrom claims there is no conflict to her holding her two positions and receiving pay from the GGEDC despite the money coming from state and local funds in addition to the federal funds the nonprofit received.
Related to her income from the GGEDC, Lundstrom wrote: “If my professional company is in a position to assist in advising on or delivering results on legislative projects, by all means, my professional team and I need to be ready to do that.
“None of the resources that we might compete and contract for accrue directly to my personal benefit beyond enabling our organization to do the work within its existing salary and budget structure.”
In another series regarding governance issues, The Candle will explore the arguments of Lundstrom and some legislators that circumstances producing even the perception of conflicts of interest are acceptable given they consider themselves to be unpaid “citizen legislators.”
(A copy of the emailed questions The Candle presented to Lundstrom, along with her noted responses, is appended to the end of this story.)
The GGEDC also received more than $263,000 from the New Mexico Economic Development Department (NMEDD) for various tasks related to “recruitment/expansion, workforce development and creation of economic based jobs to qualified communities.”
Until July of 2023, NMEDD was run by Secretary Alicia Keyes, a close ally of Governor Michelle Lujan Grisham’s Secretary of the Environment Department, James Kenny.
The two were Lundstrom’s collaborators in efforts to create a hydrogen hub nearby Gallup at the old Escalante power plant – closed in 2020 and a subject of use of public dollars in another soon to be published story.
GGEDC Receives $1.25 Million Donation Resulting from Legislation.
Additionally, during the Lujan Grisham administration, a substantial amount of GGEDC’s revenue came as a derivative of a broadly negotiated “memorandum of understanding” (MOU) with McKinley County, Tri-State Generation & Transmission Association, Inc., and GGEDC signed by the three parties on January 24 and 27, 2020.
Tri-State is the company which owns the decommissioned Escalante coal burning power plant.
That was days after Lundstrom, in her role as state representative, agreed to file what became House Bill 8 of the Regular 2020 Legislative Session, entitled “ELECTRIC GENERATING FACILITY ECON DISTRICTS.”
Because it was a so-called “30-day budget session” Lundstrom needed a special message from the Governor in order for the legislature to deliberate and ultimately pass HB 8 into law. Lujan Grisham issued House Executive Message No. 3, to authorize the legislature to consider the GGEDC’s executive director/state representative’s bill.
After its passage, in early 2021, in addition to the $586,596 received in other government grants, the GGEDC was provided a $1.25 million donation from Tri-State Generation & Transmission Association, Inc.
In the next article, The Candle will be reporting on the Tri-State transaction, along with the building of Carbon Coal Road.
Here is a copy of the emailed questions presented to Representative Lundstrom, along with her noted responses (in red):