SANTA FE - The governor would no longer serve on the State Investment Council under legislation to overhaul the board that manages endowment funds valued at $15 billion.

The legislation comes amid a federal investigation into state investment deals during former Gov. Bill Richardson's administration.

"Overall what this bill does is it reduces the influence of politics on investments," Sen. Tim Keller, D-Albuquerque, told a Senate panel on Wednesday. "We know from everything that's happened in our state that there is an absolute critical need for that."

A law enacted last year expanded the council's membership, giving the Legislature for the first time the ability to appoint some members. The law also lessened the governor's influence over the council by reducing the number of his appointees and administration officials serving on the group.

Keller said the proposed legislation "is about finishing the job."

"It is an inherent conflict of interest ... that our governor should be responsible for the choices of stocks and bonds in our state," said Keller.

The legislation also would change how the Legislature makes its appointments to the council. Currently those are done by the Legislative Council, a group of House and Senate leaders and rank-and-file members.

Under the bill, House and Senate Democratic and GOP leaders each would appoint a member to the council.

Sen. Steven Neville, R-Aztec, said that approach would ensure bipartisan appointments.

"This is the

Advertisement
final step in trying to get things where I think we can have a very professional SIC," said Neville.

The Rules Committee reviewed the investment council measure on Wednesday but postponed a final vote while Keller and Neville fine-tune the legislation.

The council oversees management of permanent funds, which make annual payouts that help finance public schools and other government operations.

Senate President Pro Tem Tim Jennings, a Roswell Democrat and committee member, said it was critical to revise the investment council.

"That's the whole thing where we got into this mess was because it was a good old boys club," said Jennings.

The co-founder of a firm that advised the Investment Council and a state educational pension fund has pleaded guilty in a corruption case in New York and acknowledged that some New Mexico investment deals were done because of pressure from politically connected individuals. The names of those individuals have not been disclosed. No charges have been announced by the U.S. Attorney's Office as part of its investigation in New Mexico.