Monday, August 3, 2020 Maggie Toulouse Oliver Secretary of State State of New Mexico 325 Don Gaspar, Suite 300 Santa Fe, NM 87503 Sent via email: Maggie.TOliver@state.nm.us Dear Secretary Toulouse Oliver: This letter serves as a formal complaint against “Council for a Competitive New Mexico,” (CCNM) a New Mexico Domestic Nonprofit corporation (see Appendix 1). Allegation I believe that CCNM: ● Failed to disclose its contributors who donated $134,325.09 in the June 2, 2020 Democratic Primary, on behalf of several State Senate candidates (see Appendix 2). ● Concealed its source(s) of contributions for its independent expenditure activities. ● May have violated the New Mexico Election Code knowingly and wilfully. Relevant Statutes The New Mexico Election Code defines an Independent Expenditure (IE) in the following manner1 (emphasis mine): “Independent expenditure” means an expenditure that is: (1) made by a person other than a candidate or campaign committee; (2) not a coordinated expenditure as defined in the Campaign Reporting Act; and (3) made to pay for an advertisement that: (a) expressly advocates for the election or defeat of a clearly identified candidate or the passage or defeat of a clearly identified ballot question; (b) is susceptible to no other reasonable interpretation than as an appeal to vote for or against a clearly identified candidate or ballot question; or (c) refers to a clearly identified candidate or ballot question and is published and disseminated to the relevant electorate in New Mexico within 30 days before the primary election or 60 days before the general election in which the candidate or ballot question is on the ballot. 1 New Mexico Election Code, 1-19-26. The Election Code further describes the reporting requirements for an IE2 (emphasis ours): A. A person who makes an independent expenditure not otherwise required to be reported under the Campaign Reporting Act shall file a report with the secretary of state within: (1) three days of making the expenditure if the expenditure, by itself or aggregated with all independent expenditures made by the same person during the election cycle, exceeds one thousand dollars ($1,000) in a nonstatewide election or three thousand dollars ($3,000) in a statewide election; or (2) twenty-four hours of making the expenditure if the expenditure is in an amount of three thousand dollars ($3,000) or more and is made within seven days before a nonstatewide or statewide election. B. The report required by Subsection A of this section shall state: (1) the name and address of the person who made the independent expenditure; (2) the name and address of the person to whom the independent expenditure was made and the amount, date and purpose of the independent expenditure. If no reasonable estimate of the monetary value of a particular expenditure is practicable, it is sufficient to report instead a description of the services, property or rights furnished through the expenditure; and (3) the source of the contributions used to make the independent expenditure as provided in Subsections C and D of this section. C. A person who makes independent expenditures required to be reported under this section in an amount totaling three thousand dollars ($3,000) or less in a nonstatewide election or nine thousand dollars ($9,000) or less in a statewide election shall report the name and address of each person who has made contributions of more than a total of two hundred dollars ($200) in the election cycle that were earmarked or made in response to a solicitation to fund independent expenditures and shall report the amount of each such contribution made by that person. D. A person who makes independent expenditures required to be reported under this section in an amount totaling more than three thousand dollars ($3,000) in a nonstatewide election or nine thousand dollars ($9,000) in a statewide election, in addition to reporting the information specified in Subsection C of this section, shall either: (1) if the expenditures were made exclusively from a segregated bank account consisting only of funds contributed to the account by individuals to be used for making independent expenditures, report the name and address of, and amount of each contribution made by, each contributor who contributed more than two hundred dollars ($200) to that account in the election cycle; or (2) if the expenditures were made in whole or part from funds other than those described in Paragraph (1) of this subsection, report the name and address of, and amount of each contribution made by, each contributor who contributed more than a total of five thousand dollars ($5,000) during the election cycle to the person making the expenditures; provided, however, that a contribution is exempt from reporting 2 New Mexico Election Code, 1-19-27.3 pursuant to this paragraph if the contributor requested in writing that the contribution not be used to fund independent or coordinated expenditures or to make contributions to a candidate, campaign committee or political committee. E. If a person who has made a report required by this section is required to make subsequent reports during the election cycle, the information concerning contributions in the subsequent reports shall cover only contributions not previously reported. Finally, the Election Code prohibits concealing the source of contributions used for independent expenditures3 (emphasis mine): Contributions in one name given for another prohibited; concealing source of contributions used for independent expenditures. A. It is unlawful for a person to make a contribution in the name of another person, and no person shall knowingly accept a contribution made by one person in the name of another person. B. No person shall make contributions or expenditures with an intent to conceal the names of persons who are the true source of funds used to make independent expenditures or the true recipients of the expenditures. Basis CCNM filed as a New Mexico Independent Expenditure Committee and reported campaign expenditures to the Secretary of State, but failed to disclose its contributors, as required by law, and concealed its contributors. These illegal actions may have been done knowingly and willfully. Maggie.TOliver@state.nm.usIt is clear that CCNM conducted electioneering (see Appendix 3). For example: 1) On 5/17/20 the Council sent a pro-Richard Martinez flyer that was received in the mail. 2) On 5/18/20 robo calls against Siah Correa Hemphill (SD28) started – two versions are included. 3) On 5/19/20 live calls against Pam Cordova (SD30) started and robo calls against her. 4) On 5/31/20, mailing against Pam Cordova (SD30) arrived in mailboxes. 5) On 6/4/20, mailing against Siah Correa Hemphill (SD28) arrived in mailboxes. These paid communications expressly advocated for the election or defeat of a clearly identified candidate; was susceptible to no other reasonable interpretation than as an appeal to vote for or against a clearly identified candidate; and referred to a clearly identified candidate and was published and disseminated to the relevant electorate in New Mexico within 30 days before the primary election. Therefore, CCNM was required to report its contributors and not conceal them. The Election Code states the following penalties (emphasis ours): 3 1-19-34.3. B. With or without a referral from the secretary of state, the attorney general or district attorney may institute a civil action in district court for any violation of the Campaign Reporting Act or to prevent a violation of that act that involves an unlawful solicitation or the making or acceptance of an unlawful contribution. An action for relief may include a permanent or temporary injunction, a restraining order or any other appropriate order, including a civil penalty of up to one thousand dollars ($1,000) for each violation not to exceed a total of twenty thousand dollars ($20,000), and forfeiture.4 Penalties. A. Any person who knowingly and willfully violates any provision of the Campaign Reporting Act is guilty of a misdemeanor and shall be punished by a fine of not more than one thousand dollars ($1,000) or by imprisonment for not more than one year or both. B. The Campaign Reporting Act may be enforced by the attorney general or the district attorney in the county where the candidate resides, where a political committee has its principal place of business or where the violation occurred.5 The media consultant used by CCNM, The Lincoln Strategy Group, has decades of experience in New Mexico elections. Similarly, Vanessa Alarid, the sister-in-law of CCNM’s President, and whom I believe was involved in CCNM, also has decades of experience in New Mexico elections. It is my hope that you follow up with a full investigation to ensure that all of CCNM’s campaign contributors and amounts are properly accounted for in its campaign filings, and to assess whether these illegal actions were done knowingly and willfully. I also ask that you forward this complaint to the new State Ethics Commission, which I understand will also review election-related complaints. I hope that CCNM is asked to follow the law and be held accountable for any penalties. Sincerely, Neri Holguin Holguin Campaigns Inc., Campaign Manager for Siah Correa Hemphill and Pam Cordova 2523 Carson Rd. NW Albuquerque, NM 87104 505/217-8705 Appendix 1: Council for a Competitive New Mexico, Inc. is a New Mexico Nonprofit Corporation 4 5 1-19-34.6(B) 1-19-36 Appendix 2: Council for a Competitive New Mexico Expenditures6 Expenditure Date 5/6/20 Expenditure Amount $15,736.00 Expenditure Description direct mail & radio Submit Date 5/14/20 $24,401.00 Direct Mail & Advocacy Calls 5/20/20 5/20/20 Candidate Name/Ballot Question RICHARD C MARTINEZ-Support JOSEPH CERVANTES-Support RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support GABRIEL J RAMOS-Support JOSEPH CERVANTES-Support 5/22/20 $3,408.80 Advocacy Calls 5/28/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/23/20 $3,491.60 Advocacy Calls 5/28/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/26/20 $3,465.60 Advocacy Calls 5/28/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/27/20 $7,766.00 Advocacy Calls 5/28/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/27/20 $27,412.22 Direct Mail 5/28/20 SIAH CORREA HEMPHILL-Oppose PAMELA M CORDOVA-Oppose NEOMI O MARTINEZ-PARRA-Oppose LEO JARAMILLO-Oppose 5/28/20 $18,391.45 Direct Mail 5/28/20 NEOMI O MARTINEZ-PARRA-Oppose PAMELA M CORDOVA-Oppose LEO JARAMILLO-Oppose 5/7/20 $254.60 Advocacy Calls 5/29/20 JOSEPH CERVANTES-Support RICHARD C MARTINEZ-Support 6 https://portal.sos.state.nm.us/IESearch/. The payee for all expenditures is Lincoln Strategy Group, LLC. 5/8/20 $254.60 Advocacy Calls 5/29/20 5/9/20 $254.60 Advocacy Calls 5/29/20 5/11/20 $254.60 Advocacy Calls 5/29/20 5/12/20 $254.60 Advocacy Calls 5/29/20 5/13/20 $158.48 Advocacy Calls 5/29/20 5/14/20 $158.48 Advocacy Calls 5/29/20 5/15/20 $158.48 Advocacy Calls 5/29/20 5/16/20 $158.48 Advocacy Calls 5/29/20 5/18/20 $158.48 Advocacy Calls 5/29/20 JOSEPH CERVANTES-Support RICHARD C MARTINEZ-Support JOSEPH CERVANTES-Support RICHARD C MARTINEZ-Support JOSEPH CERVANTES-Support RICHARD C MARTINEZ-Support JOSEPH CERVANTES-Support RICHARD C MARTINEZ-Support RICHARD C MARTINEZ-Support RICHARD C MARTINEZ-Support RICHARD C MARTINEZ-Support RICHARD C MARTINEZ-Support RICHARD C MARTINEZ-Support 5/19/20 $158.48 Advocacy Calls 5/29/20 5/21/20 $756.13 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/22/20 $757.13 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/23/20 $756.13 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/25/20 $432.82 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/26/20 $432.62 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/27/20 $432.62 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/28/20 $4,412.02 Advocacy Calls 5/29/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 5/30/20 $5,685.22 Advocacy Calls 6/1/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 6/1/20 $5,143.27 Advocacy calls 6/3/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support 6/2/20 $9,220.58 Advocacy calls 6/3/20 RICHARD C MARTINEZ-Support GABRIEL J RAMOS-Support CLEMENTE SANCHEZ-Support JOHN ARTHUR SMITH-Support $134,325.09 Appendix 3: Copies of Paid Media Conducted by CCNM On 5/17/20 the Council sent a pro-Richard Martinez was received in the mail: On 5/18/20 robo calls against Siah Correa Hemphill (SD28) started (also attached) – two versions are included. Robo call 1: Hi, my name is Matt and I'm calling on behalf of the Council for a Competitive New Mexico with a message about one of the candidates in the upcoming Democratic Primary for Senate. Honestly, the reason I’m making these calls is because Siah Hemphill is bought and paid for by powerful Washington DC special interests groups who specialize in attacking other Democrats. Now more than ever, we need a strong united Democratic Party to fight for our values and to take on Donald Trump and the Republicans in the fall. I don't think I can vote for someone who takes money from outside groups dedicated to tearing down other Democrats. These dark money and corporate donors want their very own puppet in Santa Fe and that’s why they’re spending hundreds of thousands of dollars to elect her.. So please consider voting against Siah Hemphill in this year's Primary. This call was paid for by the Council for a Competitive New Mexico, 847-580-5045. Thank you very much. Robo call 2: Reviewing state public records, Siah Hemphill was a registered Republican. She also did not vote for President Obama in 2012 when he was in a tough election and the same for Senator Heinrich in his close election. So please, help protect our Democratic Party and vote against Siah Hemphill for State Senate. Oh, anda I’m required to tell you this call was paid for by the Council for a Competitive New Mexico. Thank you. On 5/19/20 live calls against Pam Cordova (SD30) started and robo calls (attached) against her. Robo call 1: Hi, my name is Angela and I normally don’t make calls like this but I’m calling Democrats to warn them about a candidate for State Senate. Honestly, I’m a very loyal Democrat and when I researched the candidates I found out that Pamela Cordova is being supported by powerful DC special interests groups who specialize in attacking other Democrats. Now more than ever, we need a strong united Democratic Party and a Senator that will work with Governor Lujan Grisham to ensure our Democratic majority and get our state back to work safely . So please help protect our Democratic Party and vote against Pam Cordova for State Senate. Oh, anda I’m required to tell you this call was paid for by the Council for a Competitive New Mexico. Thank you. On 5/31/20, mailing against Pam Cordova (SD30) arrived in mailboxes. On 6/4/20, mailing against Siah Correa Hemphill (SD28) arrived in mailboxes.