Amid calls for a law enforcement investigation into New Mexico investment deals, International Business Times has discovered several more deals that flowed to firms that bankrolled political groups supporting New Mexico’s Republican Gov. Susana Martinez.

The new disclosures follow an earlier IBT/MapLight report detailing how — despite strict pay-to-play rules — Wall Street firms linked to Republican donors have received hundreds of millions of dollars in deals from New Mexico investment boards that are in part overseen by Martinez, her appointees or both. Including the new data, donors gave a total of about $2 million to Martinez-linked groups, and have received a total of roughly $2.24 billion worth of investments from the New Mexico Educational Retirement Board and the New Mexico State Investment Council.

Martinez and state investment officials have denied that the governor or the campaign contributions influenced investment decisions, but after the IBT/MapLight report, Martinez announced she supports legislation to remove elected officials from the state investment council.

“Having felt the damage of political influence on the state’s investments a decade ago, the State Investment Council is especially sensitive to even the suggestion that politics might somehow play any role in our current investment process, and we emphatically reject all such allegations as false,” said SIC spokesperson Charles Wollman in an emailed statement. “We do recognize the broader issue of political contributions to national groups, and the perception of influence they can create. While it is up to the SEC to oversee these matters, we agree the subject is worthy of a broader discussion.  The Council is seeking additional information from our investment managers, and as we have in the past, the Council will aggressively pursue appropriate remedies, if warranted.”

NMERB did not respond to IBT questions. 

A 2010 Securities and Exchange Commission pay-to-play rule, passed in the wake of previous New Mexico pension scandals, is designed to deter financial firms from donating to public officials who can influence state investment decisions. 

IBT/MapLight’s original report found that, since the SEC passed its rule, eight firms managing New Mexico investment money were associated with donors that gave money to Martinez-linked groups, including Martinez’s campaign; a super PAC run by her top adviser and supporting her agenda; the Republican State Leadership Committee, which has funneled money to the super PAC; and the Republican Governors Association, which boosted Martinez’s election campaigns and which she chaired.

An additional four financial firms are linked to such donors, according to an IBT review of data compiled by the National Institute on Money in State Politics and PoliticalMoneyLine.com. They include:

- JPMorgan Chase & Co.: The Wall Street giant received a $300 million investment from the Martinez-chaired State Investment Council in March 2016. In all, the firm has given a total of $271,000 to the RGA, RSLC and Martinez. That includes $25,000 to the RGA as it backed Martinez’s 2014 reelection campaign. It also includes a $1,000 contribution in April 2014 from the company’s political action committee directly to Martinez’s campaign. The SEC’s rule explicitly covers donations from “any political action committee controlled by the investment adviser” managing public funds. The SIC said it competitively bid the contract and that JP Morgan provided the best fee rates. Andrew Gray, a spokesperson for JPMorgan, told IBT that the bank “follow[s] r egulatory guidance approved and reiterated by the by the SEC in this area” and “carefully maintain[s] two separate PACs, a state and a federal, neither of which is controlled by our investment advisors.”

“To the extent anyone in our advisors business donates money to the PAC; it is goes only to our Federal PAC, which gives exclusively to federal candidates, parties and committees,” Gray wrote in a statement. “We are proud of our transparency in this area, and were recognized again last week by the Zicklin Index as a corporate trendsetter on the quality of our corporate political accountability.”

- AQR Capital: The investment management firm was hired by the SIC in March of 2017 to manage $1.1 billion of its portfolio. The firm’s principal, Cliff Asness, has given $325,000 to the RGA since 2010. That includes $100,000 during Martinez's first election. Republican New Mexico Public Land Commissioner Aubrey Dunn — who previously told IBT he is concerned about pay-to-play practices in investments — was the only board member to vote against the move.

AQR Chief Marketing Officer Suzanne Escousse wrote in a statement that Asness’ contributions to the RGA “are consistent with applicable federal pay-to-play laws and related guidance, as the RGA agreed at the time of the contributions that they could only be used to pay for expenses associated with public policy conferences held by the RGA, and could not be used for any type of election-related activity, including political contributions or expenditures.” He made his donations, she added, “only after AQR performed extensive due diligence on the contributions, engaged in lengthy discussions with RGA counsel, and obtained detailed representations from the RGA regarding its use of the funds and its pay-to-play compliance.”



- Fidelity Investments: In 2015 and 2016, the NMERB reviewed and reapproved a contract with Fidelity to allow the firm to offer a 401(k)-style plan to state government retirees. Fidelity has given a total of more than $212,000 to the RGA and the New Mexico Republican Party since 2010. That includes $50,000 to the RGA during Martinez’s 2014 reelection campaign, and $30,000 while she chaired the group. The NMERB said it competitively bid the contract.

Fidelity spokeswoman Meghan Reilly wrote in response to IBT’s request for comment that the company “takes compliance with SEC requirements, including the ‘Pay-to-Play’ rule […] seriously” and “has implemented policies and procedures to comply with that rule,” such as training, due diligence reviews and “pre-clearance of certain personal political contributions by employees.”

- New Mountain Capital LLC: In June 2017, the firm received a $75 million investment commitment from the SIC. The firm’s founder, Steve Klinsky, gave $5,000 to the RGA in 2014. (The SEC rule, it’s worth noting, mandates a two-year time frame between the donation by the business and its obtaining a government contract.) A New Mountain Capital spokesman did not comment on the record.

Though the SEC pay-to-play rule includes provisions designed to prevent financial firms from routing campaign cash through third parties, the agency has, to date, not enforced those provisions against groups like the RGA. Following IBT/MapLight’s first report,  both New Mexico’s Democratic U.S. Sen. Tom Udall and its Republican Land Commissioner Dunn have called for the agency to apply those rules to donations made to such third-party groups.