Co-op managers borrowed from pension plans
The investigation into allegations of financial irregularities at Socorro Electric Cooperative is ongoing and a few new details have emerged in recent days.
Co-op President Paul Bustamante told El Defensor Chieftain on Friday, Aug. 20, that the irregularities in question involve money being borrowed from employee pension plans.
While the investigation is being conducted, two co-op managers — general manager Polo Pineda Jr. and office manager-accountant Kathy Torres — have been placed on administrative leave without pay.
Bustamante said the co-op allows employees to borrow money from their 401K plans.
“It’s a practice that has been done in the past; it’s not anything new,” he said. “Other co-ops do it. In this case they borrowed, but may not have had the money (to pay it back) so it wasn’t paid in a reasonable amount of time.”
Bustamante said employees are required to pay back the fund within 30-35 days. The total amount that was borrowed between the two of them was in the neighborhood of $35,000, he said.
The co-op president said the money was borrowed in April or May 2009 — soon after the end of the co-op’s fiscal year, which ends March 31 each year. The money may not have been paid back until July of this year.
Whether it had or not is one of the things being investigated.
“We’ve seen the reconciliation sheet that says that it was paid. But, of course, there needs to be a receipt,” he said.
Bustamante said receipts may exist, but he hasn’t seen them and many of the financial documents related to the case have been secured.
“We may have to have another forensic audit done. That’s something I’ll bring up at Wednesday’s meeting,” he said.
The co-op’s board of trustees’ regular meeting is scheduled for Wednesday, Aug. 25, at 5:30 p.m. A special meeting to hear the auditor’s report for fiscal year ending 2010 is set for the same time the following day.
Excerpts from Socorro Electric’s audits for fiscal years ending in 2008 and 2009, conducted by the accounting firm of Bolinger, Segars, Gilbert and Moss of Lubbock, Texas, are posted on the co-op’s website.
Bustamante said no discrepancies were revealed in the audit for fiscal year ending 2009, but the money borrowed by Pineda and Torres would not have turned up on that audit.
Bustamante appointed a committee made up of five members of the board of trustees to investigate the allegations after an anonymous letter was mailed to members of the board last month. Committee members have been investigating the allegations since then, and have met several times to discuss their findings and how to proceed during the process.
Bustamante said co-op attorney Dennis Francish has been directed to contact law enforcement agencies.
Francish said in an Aug. 20 phone interview that he had written a letter to District Attorney Clint Welborn, contacted New Mexico State Police and delivered documents to the FBI.
“Whether they want to do anything with it or not, I don’t know,” Francish said.
Bustamante said that on Thursday, Aug. 19, a field representative with the Rural Utility Service — a division of the United States Department of Agriculture from which electric utilities obtain loans — was in Socorro and met with the investigative team. The representative left a 15-page checklist of items to be looked into, he said.
Bustamante said the committee was still going through records and he wasn’t sure where the investigation would lead next.
“This is all new to us,” he said. “We have to gather the information and at that point decide the next step.”
Contact T.S. Last