The Negligence Files: Tens of millions secretly paid out for government wrong doing

A 10-month KRQE News 13 Investigation

Larry Barker

SANTA FE, N.M. (KRQE) – It’s an obscure state government program shrouded in secrecy. It impacts taxpayers to the tune of tens of millions of dollars every year. These huge state expenditures are so hush-hush no one in the New Mexico legislature is allowed to know where the money goes. Even the governor is kept in the dark. The program is administered from an unmarked suite in a Santa Fe office building. Welcome to New Mexico’s Risk Management which is a division of the state General Services Department.

Because the state of New Mexico is self-insured, risk management handles all liability claims involving state personnel and property. So, any time a state employee is accused of wrongdoing, everyone from file clerks to the governor, the case is handled by the folks at Risk Management.

Some claims are frivolous. Some end up in court. And some are settled quietly with confidential cash payments. Out of court settlements are paid using tax dollars. Last year, those settlements cost New Mexico taxpayers some $40 million for everything from medical malpractice to negligence, discrimination to civil rights violations.

According to Risk Management Director Lara Davis, there is some element of wrongdoing in every out of court settlement.

“We deal with cases across the spectrum of difficulty in terms of really small cases to cases that are really tragic and egregious,” Davis told KRQE News 13.
State law directs the Risk Management Division to keep all settlement cases confidential. However, following a KRQE News 13 public records request, risk management agreed to disclose certain older closed cases. The state agency released hundreds of case files that document out of court settlements (greater than $25,000) between 2007 and 2012. The documents reveal a first-ever inside look at the seamy side of state government. The mistakes. The mischief. And the wrongdoing.

A KRQE News 13 review of the released documents reflect a six-year period in which risk management settled 294 state liability claims that cost taxpayers more than $72,000,000.

For example, when state drug agents raided the wrong house in Rio Arriba County, risk management quietly settled the case by paying the homeowners $31,250.

After former state Fire Marshal George Chavez accused then Insurance Superintendent Eric Serna of harassment, the state settled with Chavez for $532,000.

In 2010, the University of New Mexico Hospital’s Vice President for Clinical Affairs, Dr. Robert Katz, was accused of having multiple inappropriate sexual relationships with patients. A patient’s complaint was settled out of court costing taxpayers $1,125,000. Dr. Katz resigned from his position at UNMH.

“I would hope that when we make a decision to settle a case for a million dollars we’re protecting the public liability fund from a potential hit of multi-millions of dollars,” Lara Davis said.

Cases reviewed by KRQE News 13 reflect allegations of misconduct across state government including the Department of Corrections, Health and Human Services, Transportation and the Public Regulation Commission.

Documents released to KRQE News 13 show the New Mexico State Police was named in 51 liability cases which were settled out of court for more than $7,000,000. That includes the $225,000 paid to the family of Cordell Dobey. The unarmed Dobey was killed by NMSP Officer James Rempe after a car chase that ended on the Navajo Reservation.

In 2010, State Police officers shot and killed Luis Montoya at his home in Cordova, New Mexico. Montoya’s family filed a wrongful death claim and the case was settled for $220,000.

“We’re a human force. We’re not a bunch of robots. So we’re going to make mistakes. It’s how we adjust and learn from those so we don’t do it again,” NMSP Chief Pete Kassetas said. “We make hundreds of thousands of contacts a year with the public. And that $7 million represents a minimal amount of contacts that didn’t go so well.”

Chief Kassetas says every accusation of wrongdoing is a lesson learned.

“We want to be good stewards of tax dollars. We don’t want to be paying out large amounts of money. When we do something wrong and when we are on the hook for a certain amount of taxpayer money we’re always trying to learn from that. We’re always trying to adjust how we do business,” Chief Kassetas said.
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Risk management documents show the Children, Youth and Families Department was named in 33 liability cases resulting in out of court settlements totaling more than $15,000,000.

One of those cases involved a 20-year-old woman with disabilities who was sexually abused by her adoptive father. After CYFD caseworkers were accused of “abandoning their professional judgment” and violating the constitutional rights of the children, the state settled the case for $850,000.

In 2011, CYFD placed a 4-year-old boy with foster parents. However, after the child was blinded at the hands of the foster parents, risk management attorneys paid out $2,100,000 to settle the case.

The largest settlement in the released case files involved five Artesia children who were subjected to repeated sexual abuse at the hands of an unfit father. CYFD case workers were accused of “gross negligence” and of violating the rights of the children. The case was settled out of court for $4,990,000.

“We’re trying to control human behavior for our most vulnerable populations in the most unstable situations,” says CYFD Cabinet Secretary Monique Jacobson. “No child should have to experience what some of our children here in New Mexico have experienced.”

“When we’re reading about tragedies that occur to our children it’s first and foremost heartbreaking. The second thing that goes through my mind though is that we have to look at how we can improve as an agency,” Secretary Jacobson said.

The released risk management files show UNMH was involved in 103 out of court settlements totaling more than $27,000,000. Most of those were settled for allegations of medical malpractice and negligence.

The UNMH settlements include the case of an 8-year-old boy who was rendered a quadriplegic after spinal surgery went awry. A medical malpractice claim was settled for $1,050,000.

In 2009 a young woman underwent a cesarean section at UNMH. During the surgery, her colon was inadvertently perforated. A negligence complaint was filed and the state settled the case for $1,650,000.

In 2008 surgeons accidently perforated a woman’s bowel during a routine procedure. Complications set in and the woman died. After a wrongful death claim was filed, the case was settled out of court for $700,000.

As New Mexico’s only level one trauma hospital, UNMH is the state’s busiest medical facility. Last year, some half million patients passed through one of UNM’s medical facilities.

According to Lara Davis, the reason there are so many malpractice claims filed against UNMH is because so many patients go through the public institution every year.

“They get the worst of the worst cases. The people that go through those doors are the sickest, the most hurt, they’re in the most dire condition of any other hospital in the state,” Davis said. “The doctors and nurses and other professionals at UNM have a real challenge in trying to take care of these people.”

“Everything they touch is a potential exposure no matter what. And when those claims do come to risk management we have to make a value judgment about how successful the defense may be,” Davis said. “Oftentimes we need to settle one of those claims because we don’t think we can effectively communicate the complex medical issue to a jury.”

Since 2012 risk management has paid out more than $123,000,000 for alleged wrongdoing throughout state government.

“What’s great about the American justice system is that there are no locks on the doors,” Davis said. “Anybody at any time can walk into a courthouse and file a lawsuit against the state. Our job then is to figure out if there is a bona fide claim behind that lawsuit.”

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