Former UNM Athletic Director misspends public funds on friends, family

A Two Month Larry Barker Investigation

Editor’s note below.

ALBUQUERQUE, NM (KRQE) – UNM’s Athletic Department is battling a budget deficit but you wouldn’t know it by looking at former Athletic Director Paul Krebs’ credit card usage. The dollars involved are staggering. Public money earmarked for student athlete programs was quietly diverted to personal use. And yet, nobody noticed. Not UNM’s administration, and not the auditors.

“It’s not right. When is this going to end in New Mexico,” said State Senator George Munoz (D-Gallup), who serves on the Legislative Finance Committee.

New Mexico policy dictates that any state expenditure must be for a public purpose and have a public benefit. However, a KRQE News 13 investigation finds that Paul Krebs diverted tens of thousands of public dollars to benefit his friends and family. The expenditures on his university issued credit card were not related to his job duties or responsibilities at UNM’s Athletic Department.

“It is troubling. Any misuse of public money is troubling,” Interim UNM President Chaouki Abdallah said.

For example, in 2014 Paul Krebs used his UNM credit card to fund a trip to one of the hottest sporting events in America, the NCAA Final Four. UNM picked up the $6,000 tab, which included thousands of dollars for tickets and airfare. In addition, the university picked up the $968 tab for Paul Krebs’ hotel room and another $1,936 for his brother’s hotel room. That’s right, Paul Krebs stuck the public with his brother Fred’s hotel expenses. That was three years ago. Last month, following our investigation, the former Athletic Director wrote a personal check and reimbursed UNM $1,936 for his brother’s 2014 hotel room.

“Ethically it’s completely wrong,” Senator Munoz said, after reviewing the documents obtained by KRQE. “It’s hard to believe that it really happened.”

“A credit card simply is a way to access public funds,” said retired career prosecutor Steve Suttle. “It’s no different than if you reached your hand in the till and took money.”

“This is money that citizens have earned. Anytime anybody takes anything that uses a credit card or takes (money) that belong(s) to the people or the taxpayers, that is a big deal,” Suttle added.

Paul Krebs must have been on the friends and family plan when he orchestrated a trip to the 2015 Final Four tournament and stuck UNM with the $7,453 tab. The bill included 10 tickets costing $3,135, airfare for $1,338, and, $1,638 for a hotel room. Krebs also charged UNM another $1,460 to pay hotel expenses for a Phoenix businessman and his wife. Krebs justified using public money for the benefit of private individuals by noting the Phoenix couple were potential donors to the athletic program.

According to Steve Suttle, if a government employee uses public funds to benefit a private individual, “you’ve committed a crime.”

No one at UNM questioned the $6,368 Paul Krebs spent on the 2016 Final Four tournament. Tickets alone set back the university $4,681. Krebs grabbed tickets for himself, his wife Marjori and his son Jacob. He gave Tim Cline, an executive with Learfield, a Texas based sports marketing firm, four tickets. Paul and Marjori’s $1,728 hotel bill was also charged on the UNM credit card.

The Krebs entourage hit up the university $13,119 for tickets to the 2017 Final Four tournament in Phoenix. It was a family affair. Paul’s wife got a seat, so did Paul’s children, and his three brothers. UNM Vice President David Harris got two tickets. So did Regent Rob Doughty as well as Associate Athletic Director Ed Manzanares and his three children. Half of the 28 tickets in Paul Krebs’ stash to the Final Four were distributed to an elite group of Lobo Club big wigs.

Paul Krebs put the $13,119 ticket charge on his UNM issued credit card in January. Four months later there was a rush of activity paying the money back. Was it a guilty conscience? We don’t know. However, the reimbursement checks to the university coincided with KRQE’s investigation into the ill-fated Scotland golf trip this spring in which Paul Krebs misspent tens of thousands on a golfing holiday.

Paul and Marjori Krebs wrote reimbursement checks, so did Paul’s brothers and Ed Manzanares. The Lobo Club tapped into its scholarship fund to write UNM a $4,025 check to cover Final Four perks given to club executives, insiders, and a select group of donors.

According to retired prosecutor Steve Suttle, paying back misspent funds may not negate a crime. “We’ve had several instances in New Mexico within the last five or six years of governmental officials who have played fast and loose with funds and paid them back and were still subject to prosecution,” Suttle said.

State Senator Munoz says he doesn’t see any public benefit for the Krebs family to attend the Final Four every year. “There’s no benefit. I can’t think of one benefit that we would have got from them going to the Final Four,” Senator Munoz said.

And it’s not just the Final Four. Since at least 2015 the public has shelled out more than $4,000 for Paul Krebs and his wife to attend the National College Football Championship games.

In July 2016, Krebs charged the university $373.95 for an airline ticket to Las Vegas, Nevada. UNM officials who reviewed the expenditure say it was for the Athletic Director to participate in a men’s basketball golf retreat.

Then there’s the thousands of dollars UNM has reimbursed Paul’s wife, Marjori to attend a multitude of out-of-state sporting events.

A provision in Krebs’ $1.1 million dollar contract permits the Athletic Director’s spouse to be reimbursed for “travel to athletic events” at university expense. UNM Interim President Chaouki Abdallah told KRQE it is standard in college athletics for an athletic director’s spouse to travel at public expense. At New Mexico State University the Athletic Director’s spouse is only permitted to travel on chartered aircraft for men’s basketball and football trips.

A 2015 addendum to Paul Krebs’ employment agreement also permits the Athletic Director’s “dependent children” to attend regular season away and NCAA postseason games at public expense.

Add it all up, and Paul Krebs used his UNM credit card for tens of thousands of dollars in expenses unrelated to his duties and responsibilities at the Athletic Department. There are potential violations of the State Constitution; criminal statutes come into play as well as the Governmental Conduct Act.

UNM President Abdallah says public funds should not be used to send the Athletic Director’s friends, family and private individuals to the Final Four. “I’m not going to tolerate it on my watch. What I’m trying to do right now is to figure out through the audits exactly what happened,” President Abdallah said. The State Auditor and UNM’s Internal Auditors are reviewing Athletic Department expenditures

“It’s taxpayer money. If the taxpayers paid for those trips they’re entitled to be reimbursed,” Senator Munoz said.

“We are the stewards of the public money and the public trust,” President Abdallah said. “Any time something happens that causes us to lose that is a day that is not good for the university and we try to do better every day.”

“I think everybody should care and even resent that anybody who’s been entrusted with governmental funds would ever convert those to their own use and benefit,” said retired prosecutor Steve Suttle.

Paul Krebs retired from his position as Athletic Director earlier this year. He did not respond to KRQE News 13’s request for comment on this report.


Editor’s Note: After our story aired, former UNM Regent Jamie Koch informed us that he had personally paid $700 for two tickets to the 2016 NCAA Final Four. He provided us with a copy of the check he wrote to the university on March 15, 2016.


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