- Associated Press - Tuesday, July 28, 2015

July 28—A man who filed a counterclaim against a company that once employed state Auditor Tim Keller claims that as a state senator, Keller received improper payments to obtain contracts for the business, Blue Stone Strategy Group.

Keller, a Democrat, said the allegation is untrue.

He says New Mexico Republicans have seized on the case in retaliation against him because the State Auditor’s Office is investigating whether one of Republican Gov. Susana Martinez’s Cabinet secretaries sought preferential treatment for a former client.

Keller is mentioned in a lawsuit filed by Nikishna Polequaptewa, who once worked for Blue Stone. In November 2014, after Polequaptewa had resigned, Blue Stone sued him in U.S. District Court in California, alleging he had obtained the firm’s trade secrets from its computer network and misappropriated that information, breaching his employment contract.

Polequaptewa filed the counterclaim March 12 for breach of contract and invasion of privacy.

The FBI has looked into whether Polequaptewa violated criminal provisions of the Computer Fraud and Abuse Act, according to court filings and Blue Stone’s lawyer.

Blue Stone’s lawsuit states that it retained Polequaptewa in April 2014 as a senior strategist. On Nov. 15, Polequaptewa and other employees traveled to Fort Lauderdale, Fla., for a retreat, where “Polequaptwea abruptly announced his resignation.” Shortly afterward, the suit says, “Blue Stone employees began to notice that data, emails and computer files were being deleted/transferred from Blue Stone’s databases, servers and email accounts.”

The lawsuit says Polequaptewa admitted to Florida law enforcement “that he was accessing Blue Stone’s IT infrastructure.”

For his part, Polequaptewa says that in November 2014, he submitted two written whistleblower complaints to Blue Stone corporate officers. Then, in his counterclaim against the company, he alleges wrongdoing.

“The complaints related to IT security concerns and financial malfeasance by Blue Stone corporate officers,” his lawsuit states. “Specifically, Polequaptewa complained about how Blue Stone corporate officers improperly paid tribal leaders — Ernest Stevens, Jr. (Chairman of the National Indian Gaming Association), Brian Patterson (President of the United South & Eastern Tribes), Tim Keller (New Mexico state senator), Brian Cladoosby (President of the National Congress of American Indians), and Henry Cagey (Elected Tribal Counsel Member, Lummi Nation), among others — to convince their constituents to get contracts for Blue Stone.”

That’s the only mention of Keller in the lawsuit, and he is not a not a party in either lawsuit.

Justine Freeman, Keller’s deputy chief of staff at the State Auditor’s Office, called the allegation “a baseless, partisan misrepresentation of Blue Stone and Auditor Keller and obvious retaliation for shining a light on abuse of power in the governor’s administration.”

Keller’s office has publicly said it investigated Demesia Padilla, Cabinet secretary of the Taxation and Revenue Department, on allegations of malfeasance. Keller has forwarded the complaint against Padilla to the state attorney general. Freeman says Republicans are trying to use Polequaptewa’s lawsuit to smear Keller.

“Our office was warned to expect attacks to distract from the abuse of power at the Taxation and Revenue Department,” Freeman said in an email. “Auditor Keller was employed by Blue Stone from 2009 until 2014 as a salaried employee. He worked on finance and business analytics. Keller has never been a shareholder or director of the firm.”

Matthew Berliner, an attorney for Blue Stone, said Polequaptewa’s list of allegations lacks particulars. “From a legal standpoint, I read that as something a lawyer drafted when he doesn’t really have a specific accusation and he’s going to go fish for something.”

Berliner said he has not seen any of the whistleblower complaints that Polequaptewa said he submitted.

Of Keller, Berliner said: “He did not take part in Blue Stone’s business development in securing clients.”

Freeman points out that Keller is not a “tribal leader,” as claimed in the lawsuit. He represented an Albuquerque district as a state senator for six years before being elected state auditor last November.

Michael Khouri, an attorney for Polequaptewa, said Keller and Blue Stone were running “the virtual equivalent of a racketeering operation where a state official — he was in the Legislature, I believe — would advocate on Blue Stone’s behalf to obtain contracts from various American Indian tribes.

“And he would get a kickback of 5 to 10 percent,” Khouri said.

Freeman responded, “Tim Keller flatly denies these allegations.”

Khouri said he couldn’t name the Blue Stone clients. He referred questions to his Polequaptewa.

Polequaptewa did not respond to requests for comment.

Justin Horwath can be reached at 986-3017 or [email protected]

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