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Former New Mexico Cabinet secretary appears in court

July 14, 2018

Demesia Padilla, formerly New Mexico’s Cabinet secretary of taxation and revenue, made her first appearance in a public setting Friday since being charged with eight counts of public corruption.

Padilla, 58, was arraigned before state District Judge Mary Marlowe Sommer. The judge scheduled Padilla’s preliminary hearing to begin Oct. 29, just days before the general election.

Prosecutors from the state Attorney General’s Office said they expect the preliminary hearing to last 10 days. They hope to establish in the proceeding that sufficient evidence exists for Padilla to go on trial.

She was accompanied to court by her lawyer, Paul Kennedy, and her husband, Jesse Medina Jr. Padilla only spoke in response to a series of routine yes-or-no questions from the judge. She did not enter a plea.

Marlowe Sommer released Padilla without bond. Her conditions of release include not contacting witnesses, not using illegal drugs or drinking to excess, and not visiting the tax department before the preliminary hearing.

Padilla, who lives in Albuquerque, is accused among other crimes of illegally transferring about $25,000 from the bank account of Bernalillo-based Harold’s Grading and Trucking, which was a client of her accounting business. Investigators say the company did not authorize the 40 discreet electronic transfers.

The attorney general alleges she transferred all of that money between 2011 and 2013. Padilla became secretary of the Taxation and Revenue Department in January 2011, following Martinez’s election as governor.

The criminal charges against Padilla, three felonies and five misdemeanors, raise questions about whether she was continuing to manage a company’s taxes while also serving as the state’s top tax official.

Padilla has maintained that she stopped working for her accounting firm about the time she took office.

Padilla’s staff at the Taxation and Revenue Department began auditing Harold’s Grading and Trucking about 2014. Some staff members told investigators that Padilla questioned them about that audit. Others said it was unusual for a Cabinet secretary to go to an audit supervisor and ask for the file on a particular case.

Some department staff said Padilla pressured them to to overlook audit findings and suppress investigations of her friends and clients.

Padilla is charged with engaging in an official act for personal financial gain, embezzlement over $20,000, computer access with intent to defraud or embezzle, and five counts of violating ethical principles of public service.

Kennedy, a former state Supreme Court justice, in recent years has become known not only as Martinez’s attorney, but as the go-to lawyer for allies of the Republican governor.

He represented Martinez’s political adviser, Jay McCleskey, when he was investigated regarding expenditures from Martinez’s campaign, as well as money from her 2011 inauguration committee. Prosecutors never charged McCleskey with a crime.

Kennedy also is representing state Rep. Monica Youngblood, R-Albuquerque, who is scheduled to stand trial next month on a charge of aggravated drunken driving.

Padilla was the Republican candidate for state treasurer in 2006. She lost that election but returned to politics after Martinez was first elected governor in 2010. Padilla remained a Cabinet secretary until her resignation in December 2016.

She became one of Martinez’s most outspoken allies on what they described as a public safety measure — their yearslong effort to repeal a law allowing undocumented immigrants living in the state to obtain driver’s licenses.

Padilla said the licensing law drew human traffickers to New Mexico, a claim that legislators such as Rep. Brian Egolf, D-Santa Fe, contested as untrue.

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