New Mexico Commission seeks new insurance superintendent

October 9, 2006

New Mexico’s Public Regulation Commission has chosen a finalist to replace former Insurance Superintendent Eric Serna, but regulators won’t say who that person is.

Following a closed meeting on Sept. 26, the PRC announced it has authorized its chief of staff to negotiate with the person on issues such as salary and job responsibility.

PRC Counsel Carol Rising said New Mexico state law allows discussions about personnel matters to be held behind closed doors as long as no formal action is taken. She argued that authorizing the chief of staff to approach someone is different from making a final appointment.

However, Bob Johnson, the executive director of the New Mexico Foundation for Open Government, said the Commission appears to be breaking the law.

“When they authorize the chief of staff to negotiate with a particular person they are running into a real problem,” Johnson said.

He pointed to a case in Carlsbad in which a judge ruled that such names and resumes for public jobs are public record and have to be divulged.

At press time, PRC Chairman Ben Lujan said the Commission was prepared to make a formal appointment on Oct. 3 after it holds its regular meeting and if the finalist accepts the proposal.

At least one commissioner, David King, however, said he had hoped the names of candidates vying to be superintendent would have been released to provide time for public scrutiny and more time for candidate interviews.

“We need to be very careful in this process, he said. “This is a key, key position and we have to have an open process.”

According to a copyright story published in the Albuquerque Journal, two of Governor Bill Richardson’s appointees are top candidates. The paper indicated Edward Lopez Jr., superintendent of regulation and licensing, Pete Dinelli, a deputy city attorney, Betty Rivera, who served on the Public Utility Commission, and Morris J. Chavez, the state’s gaming representative, are candidates.

Serna retired in May after being suspended by the commission over conflict-of-interest issues. At the time, he was making more than $91,000 a year.

Meanwhile, lawyers for Serna have asked a federal judge to limit questioning by plaintiffs’ lawyers during a deposition, allowing them to ask nothing else “other than his name.”

An Espanola, N.M., insurance agent has been charged with embezzling more than $52,000 from his clients.

A grand jury indictment of 60 criminal counts was filed against Dennis O’Brien in district court in Santa Fe, N.M. O’Brien was named along with former Superintendent of Insurance Eric Serna in a civil suit filed by nine northern New Mexicans in April.

In the latest indictment, O’Brien faces one count each of embezzlement, interfering with an insurance examiner and racketeering and 57 counts of diverting money from a fiduciary fund.

He is scheduled to enter a plea on the charges Oct. 23.

O’Brien’s attorney did not return a phone call seeking comment by press time.

According to the indictment, O’Brien is accused of taking money intended to pay insurance premiums to Viking Insurance Co., Progressive Insurance Co. and Traders Insurance Co. He also is accused of taking money from a Century Bank account that was supposed to pay insurance premiums, the indictment said.

O’Brien also is accused of misleading an examiner appointed by Serna about a request for bank records, the indictment said. The indictment also alleged that O’Brien engaged in racketeering from Jan. 10, 2003, through June 29, 2005.

The civil suit filed by residents of Rio Arriba and Santa Fe counties alleged O’Brien had bilked the plaintiffs by keeping their insurance premiums. It also accused Serna of pressuring his employees to stop investigating complaints against O’Brien.

Both Serna and O’Brien have denied the civil suit allegations.

Robert Gorence, Serna’s attorney, said that although Serna expects to be exonerated, there are two pending investigations by the FBI and attorney general’s office that involve Serna.

The state attorney general’s office has been looking into Serna’s dealings with a bank that does business with the state Insurance Division and has donated to a foundation that Serna helped to create.

“Plaintiffs’ deposition will likely seek to delve deeply into Mr. Serna’s financial dealings and holdings, which likewise are or may be relevant or potentially relevant to the criminal investigation,” Gorence wrote in court documents filed last month.

While Serna has a right to invoke his privilege against self-incrimination, the plaintiffs’ attorneys are arguing that he should either have to answer questions or assert his rights under the Fifth Amendment because there is no pending indictment or criminal prosecution against him.

Serna has not been charged with a crime.

Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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