City moves Inspector General position as McHard Report legacy lives on

The Las Cruces City Council voted unanimously to shuffle the inspector general position so that the office now reports to the city manager instead of the city attorney. 

The vote on Sept. 3 empowers the inspector general to be more independent and effective, according to City Attorney Brad Douglas. 

"In my opinion, it’s not appropriate that (the inspector general) reports to me,” Douglas said. “I should be advising him and assisting him when requested, but if this passes... he or she will report solely to the city manager.”

The same vote, which required repeal and replacement of an ordinance, also removed the threat of criminal penalties for not complying with an investigation, added whistleblower protections and defined terms including “fraud” and “waste.”

“The overall goal is to remove ambiguity from the existing ordinance,” Douglas said. 

Councilor Johana Bencomo said she was glad that the inspector general would now report to the city manager, but questioned what would happen if the city manager was the investigation’s target.

Douglas acknowledged that a situation like that would create a conflict of interest, and that the city would rely on its ethics enforcement board to conduct the investigation.

The city first hired Charles Tucker as inspector general in 2023 as one of the final reforms following the publication of an investigation into $1.7 million in mishandled city funds known as the McHard report, for the accounting firm that conducted the probe.

In 2020, an investigation into Visit Las Cruces, the city’s tourism department, said "there (was) probable cause to believe that criminal violations have occurred" regarding the actions of former economic development director Phil San Filippo, former city manager Stuart Ed and restaurateur and realtor Marci Dickerson. 

The report alleged that San Filippo illegally steered city business to Dickerson and made dozens of illegal donations to non-profits and charities. San Filippo, who was fired from his city position, denied all wrongdoing, as did Ed (who left the city in 2019) and Dickerson. The three also said they had not been involved in the investigation. No criminal charges were filed in connection with the report’s findings.

The report said the city was unable to account for $1,674,624 in taxpayer money over a four-year period. 

Four years later, new city managers, attorneys, economic development staff and others have been hired. The city has also implemented other financial checks to mitigate the chance of a similar incident. 

Another significant change to the city included hiring an inspector general, tasked with investigating municipal matters involving elected or appointed officials, city employees, municipal agencies and instrumentalities, contractors, subcontractors and other parties doing business with the city or receiving city funds, according to the city’s ordinances. 

The inspector general does not investigate criminal acts but can refer those incidents to the police if discovered.

By ordinance, the city is required to have an inspector general. The same ordinance also reprioritized filling an oversight committee, another piece of Las Cruces' accountability structure. Most of the council’s questions about the changes focused on this piece.

The oversight committee, staffed by auditing and finance professionals with two city councilors as non-voting members, would receive reports from the inspector general and make recommendations about policy changes.

“When would that be, putting nominations in for new members?” Councilor Cassie McClure asked. 

Douglas said as soon as possible. 

“We have a poll of candidates to look into. So, our goal is to find a way to begin filling those vacancies and have the oversight committee fulfill its functions,” Douglas said.