Ledes from the Land of Enchantment

LFC: NM agency withheld certain settlements from the public

In 2022 New Mexico paid $1.5 million to settle a lawsuit against the Children Youth and Families Department over allegations that a brother and sister were severely abused while in foster care.

The state never publicly disclosed in its Sunshine Portal how the case ended, or the amount paid to the minors. Lawmakers learned this is a pattern practiced by the New Mexico Risk Management Division that “routinely omits” settlements involving minors or disabled adults from public view.

The Risk Management Division – part of the wide-ranging General Services Department – manages the state’s liability insurance and any payouts, whether court-ordered or through settlement.

The 2022 case was one of three examples from the same year that Risk Management did not disclose settlements involving CYFD on the state’s transparency website, according to a report by the Legislative Finance Committee. Those three settlements total nearly $2.9 million in taxpayer dollars.

LFC Program Evaluation Manager Micaela Fischer, an author of the report, told lawmakers in a Sept. 29 meeting she only included three examples but said there are “many more out there.”

The 39-page report also highlighted financial concerns, namely that the state will see higher costs because New Mexico’s risk policies are not prepared to cover nor prevent increasingly large liability settlements.

There are also concerns that state agencies are responsible for much of the loss prevention, even as the Risk Management Division bears the costs.

High-dollar settlements out of public view 

The report also noted that unlike other states, New Mexico gives the Risk Management Division sole authority to approve all settlements, for any amount.

Along with the $1.5 million settled on the foster care abuse case in 2022, the state paid a $985,000 settlement to two brothers who said they were sexually abused in their Bernalillo County foster home in 2020.

Finally, the state paid out $400,000 to the estate of a two-year-old foster child who was returned to his mother and died from abuse-related injuries, according to the LFC report.

These three settlements are double the $1.4 million the New Mexico’s Children Youth and Families Department paid out in settlements listed on the Sunshine Portal for the past three years, according to a Source NM analysis of the transparency website.

Fischer said keeping some settlements out of public view limits accountability for agencies’ spending of public money.

“There’s a strong incentive for loss prevention, mitigation that agencies feel when settlements are going to end up in the newspaper and that incentive is lost if settlements stay buried,” Fischer said.

She further noted that Risk Management had not submitted a report to the legislature on settlement payments, which is required by state law. The agency said in the report that it would provide a report starting in the winter of 2023.

In the same meeting, Secretary Robert Doucette – who heads both the General Services Department and the New Mexico Workers Compensation Administration – said the Risk Management does not publish certain settlements.

“In an instance where there is concern for the safety of children or the disabled, we have not put that information onto the portal,” he said.

Doucette’s remarks did not mention redaction, or the use of initials, which are two common practices used by courts to keep the identities of children and disabled people private in public documents.

Doucette told lawmakers that while there is no legal requirement to publish on the Sunshine Portal, the agency has an internal policy to publish recent settlements on the 1st and 15th of each month.

He said there were cases of “staff shortages and technical glitches,” that prevented publication.

Ain’t no sunshine when the settlement data is gone

“If we don’t make that first or fifteenth, I’m aware of what happened and why it happened,” Doucette said. “We haven’t had many of those going forward.”

In a further email, interim spokesperson Rod Crawley said the legislature can request to know if children or disabled people receive a settlement.

He said if Risk Management posted settlement details it would “draw attention to the fact that an especially vulnerable claimant has received a settlement.”

Crawley also said the agency could not redact details on a settlement if it were to be asked for through an Inspection of Public Records Request.

“Therefore, the best protection (Risk Management Division) can provide to an especially vulnerable claimant, is to not broadcast the fact that they have received a settlement,” he said.

Crawley did not answer questions about the scope of how many settlements are withheld based on the settlements including children and disabled people, and why redaction or other methods to protect vulnerable identities are not sufficient to release these documents publicly.

Source NM previously published that the agency was failing to update the Sunshine Portal, and that current state law would have to change if the state wants more transparency.

No one from the agency has granted any interviews to Source NM.

No questions from lawmakers

No lawmaker on the interim committee asked any questions regarding the lawsuits left out of public view.

Instead, lawmakers focused on predicting the future financial impact of lawsuits brought against the state, filling a key position in the agency or asking if Doucette had met with the governor’s office about bringing changes to the transparency law in the next session.

Other issues

More frequent and expensive claims are eroding the fund, the report found.

Open civil claims are going to eventually cost the state $47 million, Fischer said – even as there’s only $43 million currently available in the fund.

A screenshot showing the highest cost settlements the state has paid since 2018. (Courtesy Legislative Finance Committee)

“It needs to cover not only all those civil rights claims, but also any other liabilities – auto liabilities, general claims, medical malpractice,” Fischer said. “So, it’s not great.”

Under the current laws, the agency has a limit on how much it can raise insurance premiums for agencies – even as there’s no limit for how much a settlement can cost. That premium increase is wrapped up in the budget-making process and enacted two years down the line.

The report asked lawmakers to consider capping how much the Risk Management Division can offer for adverse settlements. This would mean agencies making the settlement’s would pay above that number from their budgets.

Another recommendation would be requiring additional approval from the legislature or attorney general for settlements above $500,000.

Finally, the report asked the legislature to create a law to require agencies to investigate and report significant losses of property.

Internally, the report recommended the Risk Management Division report quarterly all claims over $25,000.

It asks the division to monitor and report on what other agencies are doing to control losses in their yearly report and determine if certain departments and topics are “at higher risk for employee claims,” and offer preventative training.

Doucette said the agency agreed “with the vast majority of the recommendations.”



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