The probe appears focused in part on whether former APD Chief Ray Schultz, who led New Mexico’s largest law enforcement agency for eight years, helped improperly steer the Taser International, Inc., contract.
BY JEFF PROCTOR
NEW MEXICO IN DEPTH
A state grand jury has subpoenaed payroll records, documents related to legal interpretations, and correspondence between former Albuquerque Police Chief Ray Schultz and Taser International, Inc., in connection with an ongoing criminal investigation into allegations of contract rigging that Schultz has been unable to shake since they first arose in early 2014.
Schultz is the focal point of three subpoenas obtained by New Mexico In Depth. They were served this summer on the Albuquerque Police Department, the city Inspector General’s Office and Taser, the nation’s largest manufacturer of electronic stun guns and body-worn cameras for police. Each recipient was ordered to turn records over to a grand jury convened at the Bernalillo County District courthouse in Albuquerque on July 29.
The documents offer a first glimpse into state Attorney General Hector Balderas’ criminal investigation of how the Albuquerque Police Department awarded a $2 million no-bid contract to Taser for more than 500 body-worn cameras and five years worth of online video storage.
The probe appears focused in part on whether Schultz, who led New Mexico’s largest law enforcement agency for eight years, helped improperly steer the contract to Taser as he was preparing to take a thousand-dollar-a-day consulting job with the company. He began that work at the end of 2013 while he was still technically employed by APD, though no longer serving as chief.
Three government administrative reviews completed last year concluded, to varying degrees, that Schultz did tip the scales in favor of the city awarding the contract to Taser.
New Mexico In Depth learned this week, however, that a key finding in one of those reviews, by the city’s Office of Internal Audit, was softened after pushback from Rob Perry, the city’s top executive under Mayor Richard Berry.
Debra Yoshimura, director of the city’s Office of Internal Audit (OIA), said in a telephone interview that she “felt some pressure” from Perry and members of the city’s Accountability and Government Oversight Committee to blunt a finding that Schultz had violated the city’s conflict of interest rules.
Yoshimura said that ultimately it was her call to keep the finding or change it, but pointed out the committee has the authority to discipline and even fire her.
The three administrative reviews followed a series of KRQE-TV reports in the spring of 2014 that included an August 2013 e-mail exchange in which Schultz, who was days from taking “early retirement,” discussed a consulting position with a Taser official. In the same exchange, Schultz told the official that the contract’s approval path through a City Council committee had been “greased.”
Balderas’ investigation is among the second-year prosecutor’s first high-profile public corruption cases since he reached a plea deal last year with former Secretary of State Dianna Duran on charges of embezzling campaign funds.
It also coincides with a series of scandals involving officials in New Mexico that have thrust public trust in state and local government, or the lack of it, into the open.
As with the administrative reviews, agents of the Attorney General have sought records related to Schultz’s financial relationship with Taser and whether he was still making policy decisions at APD while the body camera contract was being finalized. The agents also subpoenaed records concerning how others within the city arrived at key decisions about Schultz’s arrangement with the company after the scandal spilled into public view.
No charges have been filed in connection with the Taser case. Schultz and the city have previously denied wrongdoing, citing ambiguity in city rules as a way to assert that Schultz did not break them.
Reached by telephone Tuesday, Schultz said he was “very, very busy” and refused to answer questions about the Attorney General’s investigation.
The city did not respond to a detailed list of questions by e-mail before New Mexico In Depth’s deadline.
In an e-mailed response, a Taser spokesman did not answer any questions related to the AG’s investigation or the subpoenas. The spokesman did write that the company believes it was “fully compliant with all ethics guidelines” and that it did provide some information to the Attorney General’s office. He did not respond to a follow-up question about whether the information provided was in response to the subpoena.
Schultz’s tenure at APD was a mixed bag.
A sweeping federal investigation that slammed APD’s widespread use of excessive force and department leadership’s indifference to it came on Schultz’s watch.
He also oversaw a massive expansion in the department’s manpower and a move into the digital age that included the use of body cameras. His was one of the first large departments in the country to use the cameras on a broad scale. Since then, they have become a central — if controversial — component in the national discussion about police reform.
Questions about the Taser deal have dogged Schultz, 55, even after he left New Mexico to take a job as assistant police chief in Memorial Villages, Texas. But none of the three government watchdogs that investigated whether he violated city rules had the power to do any more than suggest policy revisions.
Meanwhile, the AG’s criminal investigation has quietly loomed.
A spokesman for Balderas confirmed in an email to NMID last week that the investigation is ongoing, as it has been since a public referral in March 2014 when Gary King was still attorney general.
James Hallinan, the AG’s spokesman, would not say whether individuals have been subpoenaed to appear before the grand jury, or whether additional subpoenas have been issued for records. Nor would he say how much longer the investigation might take.
In all three subpoenas, Schultz is mentioned prominently.
One ordered Taser International to produce Schultz’s company pay stubs from 2013, as well as “sent and received” e-mail correspondence between the former chief and Taser employees on all Schultz’s e-mail accounts.
The grand jury also ordered Taser to turn over all contracts signed with Schultz in 2013, plus copies of all records related to conference presentations he gave for the company that year.
The subpoena issued to APD sought Schultz’s city pay stubs from Sept. 1, 2013 through Dec. 31, 2013 and all “sent and received” e-mail correspondence between him and Taser employees during that period. The police department also was ordered to provide “copies of any memorandums or reports from or to (Schultz) during this period concerning any (APD) matters or operations.”
Acting city Inspector General Peter Pacheco, who conducted one of the administrative investigations, received the third subpoena.
Reached by telephone last week, Pacheco said he complied with the subpoena, although he could not recall the specific records he provided to the grand jury.
His office was ordered to turn over all records, including emails, it used to prepare its report. Further, the subpoena sought the identities of all city legal staff assigned to the IG’s office and all correspondence “pertaining to the finding, that a salaried employee on early retirement leave is still an employee, is a reasonable interpretation given the facts developed” by the IG.
That interpretation is a fulcrum point in the case — and one contested by Mayor Berry’s administration. The internal tug-of-war at the city over whether Schultz was an employee upon taking “early retirement” is significant because determining whether he violated city rules appears to hinge, in part, on his designation as an “employee.”
Schultz went on “early retirement” Sept. 7, 2013, weeks before he began making presentations and hawking Taser’s wares. His last day of employment with APD was Dec. 31. On “early retirement,” Schultz was still drawing a city paycheck from his unused sick and vacation time, as opposed to a salary. He also continued to earn credit toward his retirement.
Perry, Berry’s chief administrative officer and the man who oversees the police department, contended in a response to the IG report that Schultz no longer had any authority at APD after Sept. 7. According to Perry, the former chief did not violate city rules that forbid employees from representing vendors with whom they have committed an official act during employment.
Pacheco’s investigation, however, found that Schultz was still receiving email about city business through his city email account months after his “early retirement” began. Moreover, the city’s Human Resources department told the IG that employees on “early retirement” are considered “active” until their official last day of employment.
The subpoena served on Pacheco’s office suggests agents are seeking to untangle the contradictory assertions as part of the criminal investigation.
Pacheco, whose office is independent from the mayor’s administration, found that Schultz’s “support for Taser was pivotal in the procurement process and may have benefited Taser’s relationship with the city of Albuquerque.”
State Auditor Tim Keller’s investigation last year went even further. In addition to running afoul of city rules, Keller found, Schultz’s handling of the Taser deal amounted to “probable” violations of the Governmental Conduct Act. That’s a criminal statute.
Albuquerque’s Office of Internal Audit, also an independent entity, raised concerns about the Taser contract in a 2015 report as well. A draft copy of the Internal Audit report recently obtained by NMID shows the office’s findings were definitive: that Schultz had violated the city’s conflict of interest rules.
Those findings were softened.
For example, the draft Office of Internal Audit report dated April 2015 headed one section: “The former police chief’s contract is not consistent with city regulations.” Dated a month later, the final report headed the same section: “The former chief’s contract with Taser may not be consistent with city regulations.”
Another section of the final Office of Internal Audit report included this sentence, which was not in the draft report: “Because of the wording of the ordinance, it is not clear if the former chief’s contract with Taser violated the ordinance.”
Yoshimura, the Internal Audit director, said the final decision to soften the finding was hers. But she said it came after a meeting of the city’s Accountability and Government Oversight Committee, of which Perry is a non-voting member. At the meeting, Perry made his case for softening the finding, she said. The committee agreed with him that the finding should be changed.
The committee is composed of members appointed alternately by the mayor and the City Council. Its primary function is to approve Internal Audit and Inspector General reports and to hire the director of Internal Audit. It is not a policy making board.
At the time of the meeting on the Taser contract report, several of the committee’s members were closely aligned with the Berry administration.
“Yes, I felt some pressure” to change the finding, Yoshimura told NMID. “But I knew I had the ability to say no … But the (city) ordinance allows and authorizes the committee to discipline me.”
All three administrative reviews of the Taser deal found other violations as well.
Each one pointed to a circumventing of the city’s procurement process — potentially in a willful fashion — by Schultz and others to award the lucrative contract to Taser on a sole-source basis, meaning Taser did not have to compete with other companies for the city’s business. (Signed by Schultz’s interim replacement weeks after he began “early retirement,” the contract was, at the time, the company’s largest for body-worn cameras.)
The Auditor’s office, the city IG and Internal Audit also found that Schultz and others accepted trips, meals and other gifts from Taser, while the contract was being negotiated, in violation of the city’s conflict of interest rules. APD employees also solicited and received donations from Taser for the “APD Ski Team.”
As Pacheco’s office noted in the Office of Inspector General report: “ … the way in which the cameras were procured, lack of documentation and conflicts of interest gives this procurement an appearance of impropriety.”
Cozy Relationship between Schultz and Taser
Before any of those investigations began, the public record was rife with evidence of Schultz’s long, questionable dance with Taser International.
The KRQE-TV reports first revealed that Schultz had gone to work for Taser and later detailed a timeline of his relationship with the company through APD memos and emails.
By late 2010, Schultz’s police department was under increasing scrutiny for its officers’ use of force, including police shootings — scrutiny that eventually led to a consent decree between the city and the U.S. Department of Justice for a comprehensive set of reforms.
Around that time, Schultz began equipping his officers with body-worn cameras. But the first batch of them, manufactured by a company called Scorpion, proved unreliable. So the chief went looking for a new vendor. He settled on Taser and, in November 2012, ordered up a plan to get one of the company’s cameras on each officer at APD.
The administrative reviews concluded that no other vendors stood a chance. And by the summer of 2013, Schultz’s vision was nearly a reality.
That August, he notified Taser he would soon be leaving APD. “I will however, still have the ear of the Mayor and CAO on department issues (at least through the election), so if you run into any problems give me a shout,” Schultz wrote to a company official.
In a later email, the Taser official mentioned that a City Council committee would be considering the $2 million contract in a couple of days and asked Schultz for “insight” about the process.
“As for the (committee) meeting next week, yes everything has been greased so it should go without any issues,” Schultz replied. (In identical statements issued after the email exchange came to light, Schultz and Perry both said the former chief had used a “poor choice of words.”)
Schultz and the Taser official continued with a back and forth about Schultz working as a consultant for the company. The two men agreed it would be mutually beneficial.
A decision on whether any of that points to criminal activity by Schultz or others is now in the hands of AG Balderas.
Jeff Proctor is a freelance journalist and former investigative news producer who contributes to New Mexico In Depth.