- Associated Press - Thursday, July 9, 2015

SANTA FE, N.M. (AP) - State Auditor Tim Keller on Thursday forwarded allegations of wrongdoing by top officials in the New Mexico Taxation and Revenue Department to state prosecutors, saying the case warrants further investigation.

Officials at the agency fired back, accusing Keller of playing politics and trying to grab headlines with false claims.

“We believe these are nothing more than unsubstantiated claims that are being driven by disgruntled former employees, who either work for the state auditor or were fired for sexual harassment, and now they have an ax to grind,” Taxation and Revenue Department spokesman Ben Cloutier said in a statement.

His comments followed an announcement by Keller, a Democrat, that a preliminary investigation by an independent forensic accounting firm raised questions about potential criminal and ethical violations.

Keller didn’t release many details, but he said his office looked into whether officials used their positions to pressure employees to obtain differential treatment for a certain taxpayer.

Other questions included whether these actions were taken to protect a high-level official from individual liability stemming from previous work for the taxpayer and whether the state lost revenue as a result.

“There is no place for preferential treatment when it comes to taxpayers,” Keller said in a statement. “Any abuse of power that costs our state revenue or leads to retaliation against employees who speak up is deeply troubling.”

Aside from forwarding the allegations to the attorney general’s office, Keller also notified Republican Gov. Susana Martinez’s office of the investigation.

Martinez spokesman Mike Lonergan also questioned the political intent of the investigation, but said Martinez “takes any allegations of misconduct seriously and will evaluate this situation thoroughly to ensure New Mexico taxpayers are being well-served and treated fairly.”

James Hallinan, a spokesman for the attorney general’s office, confirmed Thursday that a referral had been made and the matter was under review.

The case was triggered in February by an anonymous tip to the auditor’s fraud hotline that senior level officials in the Taxation and Revenue Department improperly intervened in tax matters. Included with that tip were audio recordings.

“There’s nothing partisan about the audiotapes and testimony documented by the independent investigative firm,” said auditor spokeswoman Justine Freeman.

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