Fake Financial Report Could Force New Mexico Downgrade

SANTA FE, N.M.  – New Mexico’s top security regulator says potential fraud within a state financing authority extends beyond a faked financial audit that has national credit rating agencies considering whether to downgrade the agency’s bond ratings.

The disclosure by Securities Division Director Daniel Tanaka came Wednesday as the New Mexico Finance Authority’s governing board scrapped a plan for an outside law firm to investigate how the audit was faked. The board instead wants a similar legal and accounting probe to be handled through the state auditor’s office to ensure the independence of the review.

The authority provides low-cost financing to New Mexico governments for capital projects.

After the board meeting, Tanaka declined to provide details of the other fraudulent activity, saying it was “related but not the same” as the audit.