Remember when Spaceport America CEO Dan Hicks was fired Oct. 16, 2020 for malfeasance? Hicks’ malfeasance was reported by the Spaceport’s then-CFO Zach De Gregorio.
De Gregorio filed a lawsuit about a year and two months later, Jan. 3, 2022, that named the state, and then-State Auditor Brian Colon and the Spaceport Authority as defendants.
Yesterday two motions for summary judgement were heard by Santa Fe First Judicial District Judge Bryan Biedscheid ahead of the jury trial. Jury selection for that trial starts October 13.
Colon filed one of the motions for summary judgement and the Spaceport Authority filed the other. Colon was granted summary judgement by Biedscheid, but the Spaceport Authority was not.
Interestingly, both Colon and the Spaceport Authority were represented by the same lawyer, Geoffrey White.
White is with Park & Associates of Albuquerque.
De Gregorio is represented by A. Blair Dunn of Albuquerque.
De Gregorio’s first claim against Colon, asserted he violated state law 8-6-6, a vague 1851 law that says if the state auditor or treasurer willfully neglects or refuses to perform their duty, is “guilty of any oppression or extortion,” . . . and if indicted, will pay a fine not exceeding $1,000. “The state or any person injured, in the name of the state, may sue, either before or after an indictment found, upon the bonds of the auditor and treasurer, for any damages suffered by reason of any of the acts of the auditor or treasurer in this section named.”
De Gregorio’s second claim against Colon cited the Tort Claims Act, 41-4-17, which is the “exclusive remedy against a governmental entity or public employee,” for damages arising from acts of omission or acting “fraudulently or with actual malice. . .”
Concerning the state law 8-6-6 claim, White first brought up technicalities. He argued that De Gregorio should have filed his case against the State Auditor’s Office, not Colon personally. De Gregorio should have filed the case ex rel., or on behalf of the people of the state, not as an individual. The damages claim should also have been against the State Auditor Office’s bond, not against Colon, White added.
White then claimed De Gregorio’s argument against Colon was based on a “stack of inferences” that did not bear out that Colon had acted knowingly, fraudulently or maliciously or in collusion with the state and New Mexico Spaceport Authority.
Concerning the Tort Claims Act, White again argued that De Gregorio should have filed the damages claim against the State Auditor’s bond, instead of against Colon personally. He again argued that the inferences of wrongdoing by the Spaceport were too tenuous.
Dunn responded that Judge Biedscheid did not submit an order that De Gregorio should file ex rel., a simple matter to correct, as was making the damages claim against the Auditor’s bond.
Inferences based on fact, which is essentially circumstantial evidence, Dunn said, is perfectly allowable under the law.
It is fact, which Colon did not refute, Dunn said, that he approved two contracts for the independent public auditor, The McHard Firm, for one report. That was a violation of procurement code, which disallows dividing payments in order to avoid going out to public bid or request for proposals for a purchase over $60,000. It is allowed, Dunn said, to infer Colon’s collusion with the state and Spaceport Authority to cover up hiring an investigator who would smear the whistleblower and switch blame off of themselves and onto De Gregorio, Dunn said.
It is fact that De Gregorio’s prior yearly financial audits for Spaceport America were all clean. It is not unreasonable to infer that Colon must have therefore known that some of the findings in the McHard report against De Gregorio were therefore false, Dunn said.
It is fact that Colon did not recommend, nor did the state pursue, criminal charges against De Gregorio, despite the seriousness of the McHard findings, which they would have done if they believed them to be true–another reasonable inference, Dunn said.
To infer that Colon published the McHard report intentionally and knowingly to damage De Gregorio’s credibility as a whistleblower is also reasonable, Dunn said. In fact, De Gregorio’s reputation has suffered from that report, Dunn added.
Judge Biedscheid said he did not find the correlation between the facts and inferences tight enough to rule that Colon acted knowingly and/or with malice. He granted Colon’s motion for summary judgement, letting Colon off the hook.
The Spaceport Authority’s motion for summary judgement was not granted by Judge Biedscheid.
De Gregorio’s claim against the Spaceport Authority is brought under the Whistleblower’s Protection Act, state law 23-13-2321. It claims the Spaceport Authority retaliated against him for the protected activity of reporting wrongdoing as an employee of a government agency.
White argued that proving retaliation involved proving “constructive discharge”–that the Spaceport Authority made it impossible for De Gregorio to continue as Chief Financial Officer. White contended De Gregorio’s resignation on June 21, 2020, was not forced or due to constructive discharge.
White tried to limit De Gregorio’s whistleblowing activity to about 10 days, and thus the Spaceport’s possible retaliation period to that time period. The start date White gave was June 12, 2020, when De Gregorio submitted a whistleblower report to Economic Development Department Secretary Alicia Keyes. The end date was when De Gregorio resigned. Keyes, by law, as EDD secretary, served as the Spaceport Authority Executive Board’s chairperson. It was Keyes who hired The McHard Firm.
Keyes didn’t pressure or fire De Gregorio, White said. Silent for three days after receiving the report, Friday, Keyes spoke to De Gregorio and informed him he was expected to continue as CFO. Over the next several days no one at Spaceport America demoted him, put him in a smaller office, or otherwise made it impossible for him to continue working. He didn’t have to resign, White argued.
Dunn’s counter-argument was that De Gregorio’s whistleblowing activities began well before his official report to Keyes. Prior to that Spaceport America CEO Dan Hicks told De Gregorio that “he would take action,” if De Gregorio didn’t include him on certain emails.
Spaceport Authority Attorney Melissa Force told De Gregorio, shortly after he submitted his report to Keyes, that they were going to “target him” in an investigation going back three years to find anything and everything they could use against him–”A threat they made good on,” Dunn said.
Spaceport America Business Operations Manager Guillermo Blacker told De Gregorio, shortly after he submitted his whistleblower report to Keyes, that they had already gone through all his emails looking for anything they could use against him. De Gregorio’s government email account was inaccessible to him for three days after he filed his report with Keyes, and his computer was running slowly, Dunn said.
Keyes was drafting a press release with Scott McLaughlin to make De Gregorio appear culpable with CEO Dan Hicks for any malfeasance, Dunn said De Gregorio was told.
Keyes put HIcks on administrative leave shortly after receiving De Gregorio’s report and made McLaughlin acting CEO, which was made permanent, a position he has held for about six years.
Dunn said White’s argument was essentially that De Gregorio should have stuck around until they arrested him or otherwise ruined his employability and reputation.
Judge Biedscheid said Dunn’s facts and inferences connected clearly in claims made against the Spaceport Authority, and De Gregorio’s case warranted a full airing in the pending jury trial. Biedscheid denied the Spaceport Authority’s motion for summary judgement.
Prior related articles can be found here:
https://sierracountycitizen.org/censure-attempt-based-on-house-of-cards/ Jan. 14, 2025, NMSA not good fiscal agent, Paxon et al. gave oversight authority to NMSA