New Mexico Insurance Chief’s Leave Extended to Continue Investigation

The New Mexico Public Regulation Commission extended for another 30 days the administrative leave of state Insurance Superintendent Eric Serna, who said he is “absolutely certain” he has done nothing wrong.

The paid leave, which began last week, will continue while Attorney General Patricia Madrid investigates his office at the request of the PRC.

Agents of the attorney general were wheeling cartons of papers out of PRC offices even as the commission met behind closed doors to discuss Serna’s future.

Commissioner David King said later that the possibility of firing Serna was discussed during the commissioners’ closed session but was rejected as premature.

“Right now we’re in the allegation stage,” King said. There would have to be specific reasons for dismissal, he added, “and I think that’s not been shown at this point in time.”

After its closed session, the five-member commission resumed its public meeting and voted unanimously without discussion to extend the leave.

The leave was first recommended last week by Madrid, who said there had been an “inadequate controls environment” for some time within the insurance division.”

The PRC had asked her to step in after it was disclosed that Serna’s division had made an agreement with Century Bank — a depository for about $400 million paid to the division — that included fees for the bank higher than allowed by law. Serna says that was an oversight.

Commissioners also were troubled that the bank had contributed to Con Alma Health Foundation, a nonprofit organization founded by Serna to give grants to health providers.

“They are not going to find any illegality or any official impropriety. I can guarantee you of that,” Serna said in an interview.

He attended the proceedings — hoping, he said, for a chance to speak — but was not asked to address the commission in its public or private session.

“I know it’s a political season and I know that there are a lot of innuendo and gossip items out there,” Serna also said.

He declined to elaborate, but it was an apparent reference to the Democratic attorney general’s running for Congress against U.S. Rep. Heather Wilson, R-N.M.

“I’ve been in public life a long time and I think it’s been a distinguished career and I’m not going to leave public service with this cloud over me,” Serna said. “I will do whatever it takes to clear my good name.”

Asked if he had done anything illegal or improper, he replied “I’m absolutely certain” he had not.

A group of Republican lawmakers alleged that Madrid has “multiple conflicts of interest” — including the fact she helped set up Con Alma — and the investigation of Serna should be handled independently.

King, a Republican, said he also favored an independent investigator. He said he was concerned that Madrid would feel pressured by campaign criticism that she didn’t do enough about problems in the state treasurer’s office, and not be as fair with Serna as an independent investigator would be.

Former state Treasurer Robert Vigil and his predecessor, Michael Montoya, were indicted in federal court in a kickback scheme. Montoya has pleaded guilty to one count of extortion and Vigil is scheduled for trial next week.

Public Regulation Commission Chairman Ben Ray Lujan said he had “every faith” that Madrid would conduct the investigation swiftly and ethically.

Serna also said that the allegations in a federal lawsuit filed against him were “ludicrous.”

The lawsuit accuses him of using his position to stop an investigation into allegations that an Espanola insurance agent pocketed premiums and didn’t secure policies for customers.

The lawsuit alleges Serna pressured staff not to investigate complaints against agent Dennis O’Brien, according to a copyrighted story in the Albuquerque Journal.

“That case was not lying dormant,” Serna said. He said an investigation had been under way for weeks, and a final report is being written.

He said he was not a friend of O’Brien — who is also a defendant in the case — and O’Brien said he was not an ally of Serna’s.

In fact, O’Brien said, he asked the Public Regulation Commission to look into the Insurance Division “because I was not happy with some of the things that went on at the department.”