Crisis Communications

State Treasurer's Office Scandal

Jodi McGinnis Porter

September 16, 2005, Scenario Six weeks on the job as new public relations

specialist 40 FBI agents raid the office and shuffle staff

into a conference room FBI takes over office, seizes all computers

and begins interrogating staff individually No one knows what’s happening Press surrounds the building outside

Midas Touch

Code word the FBI used for the 2-year undercover investigation

New Mexico Federal Grand Jury hands down indictments of current State Treasurer Robert Vigil and former State Treasurer Michael Montoya

Indictments are for: Racketeering, Interference with Commerce by threats of violence and conspiracy

Strategies

Identify yourself and cooperate with the investigation

Request meeting with FBI Media Representative

Damage control

Press and staff

FBI staff interviews conclude Staff dismissed for the day Prepare staff for media frenzy outside before

they exit building

Challenges

Not allowed access to computers, printer or phone

Negotiate with FBI to issue a statement of cooperation

On borrowed FBI laptop, allowed to prepare statement and fax to media

Prepare statement for Deputy Treasurer that staff is cooperating with the investigation

John Trever, political cartoonist for the Albuquerque Journal, published days after the raid

Governor Issues Statement

Sunday, September 18, 2005 Governor Bill Richardson issues statement

urging State Treasurer to step aside

Business Day Two

Biggest media story in the state All stories in the press are: Governor calling

for State Treasurer’s resignation Issue statement that investments are secure,

office returning to normal Deputy Treasurer running the office Establish separation between office and the

investigation

Increased Pressure

Security cameras monitoring staff movements by appointed employee

Staff claims of intimidation for cooperating with FBI

Nepotism issues and documents leaked to press

Governor orders security for staff protection

State Prepares to Impeach

Treasurer resigns Deputy Treasurer runs office Staff morale at all time low Simultaneously the highest and lowest

moment in the scandal

A New Day

Governor appoints new Treasurer New Treasurer not political or allowed to run

for office A sign of hope

Goal: Restore Public Trust

CLEAN HOUSE SET THE ETHICS BAR HIGH FIND THE BOTTOM PREACH PATIENCE COMMUNICATE

Actions/House-cleaning

Six employees terminated Three resigned Three placed on paid administrative leave Employee Assistance Counselor provided

Actions/Setting the Ethics Bar Review of personnel policies and procedures Establishment of anonymous whistleblower

hotline Employees assured all reported complaints

would be investigated

Actions/Find the Bottom

Independent fiduciary audit of the office Independent law firm conducts top-to-bottom

legal performance review Audits published and available to the public

Actions/Preach Patience

Remind staff of long-term strategy Conduct regular staff meetings Encourage cooperation with auditors

Actions/Communications

Regular staff meetings conducted Complete transparency All requests for information granted to press Press allowed to tour the office

Lessons Learned

Trust your instincts Remember that today’s news is tomorrow’s

trash Don’t take anything personally Build relationships with the media and

establish your credibility as a reliable source Report the facts You must be truthful, but you are not a

reporter 

Where They Are Now:

Former State Treasurer Robert Vigil Convicted in the second trial on one count of

attempted extortion Serving a 37-month prison sentence and fined

approximately $100,000. Former State Treasurer Michael Montoya

Pled guilty to a federal racketeering charge Sentenced to 40 months in prison and fined

$25,000 for his role in a kickback scheme

Food for thought…

This scandal broke, because a former employee at the State Treasurer’s Office was arrested on a counterfeiting charge

He printed counterfeit money using state equipment Treasure Vigil fired from his job He was the bagman for both Treasurers He turned FBI informant and was granted immunity

from federal prosecution He’s currently serving time on state charges