Audit report blasts New Mexico Spaceport America’s former director

SANTA FE – Former Spaceport America director Dan Hicks is described in a scathing 362-page forensic examination report, including an incompetent and bullying boss who intercepted employee emails, manipulated procurement rules, and backdated applications for travel with taxpayers’ money, published on Tuesday by New Mexico State Auditor Brian Colón.

“It is important that management support ethical behavior at all levels of government. It is important to have an honest tone at the top by putting in place and following internal controls, “Colón stated in a press release, adding,” The tone at the top must be transparent and champion honesty, integrity and accountability. “

Hicks was fired from the board of directors of the New Mexico Spaceport Authority, the agency that governs the New Mexico spaceport, in October after being taken on administrative leave in June.

The investigation followed a complaint from Zach De Gregorio, the spaceport’s chief financial officer, who resigned after accusing Hicks of circumventing internal financial controls and accounting protocols and disrupting communications with the board chairman, state economic development secretary Alicia Keyes.

On the same day that Hicks was fired, Governor Michelle Lujan Grisham removed board member Rick Holdridge, the former chairman.

Dan Hicks, the executive director of the New Mexico Spaceport Authority, speaks at the NMSU Space Valley Summit in Las Cruces on Wednesday, January 8, 2020.

Dan Hicks did not immediately respond to a Las Cruces Sun-News inquiry.

The report was produced by McHard investigators after a three-month investigation that included interviews with employees of Hicks, Holdridge, and Spaceport, as well as reviews of public records. The investigators’ findings go beyond De Gregorio’s complaint and also describe “problems” affecting his behavior.

The audit found that Hicks spent hundreds of thousands of taxpayer dollars on travel and advertising for the spaceport as a location for orbital launches, even though the Federal Aviation Administration did not license Spaceport America for orbital launches. and that he tried to win federal defense contracts for military launches, despite the spaceport’s proximity to the U.S. Army installation White Sands Missile Range, where Hicks worked for decades before hiring the spaceport in 2016.

Originally built between 2006 and 2012 with $ 220 million in public funding, Spaceport America is located in Sierra County, New Mexico, near the WSMR.

In employee interviews, Hicks was described as frustrated with corporate management insisting “virtually every rule or law must be passed” and covering up the rule violations, including unauthorized travel, for which he backdated and forged documents. it says in the exam.

Alleged shortcomings in travel

Audit records found that Hicks was reimbursed more than $ 60,000 for travel, in addition to “likely thousands of dollars” for travel billed directly to the state, and De Gregorio’s help with obtaining permits after the fact Took claim.

The audit also questions the legitimate business purposes of some of Hicks’ voyages, some of which were “essentially tourist events,” such as commemoration of the Apollo 11 mission to Colorado and Florida.

Dan Hicks, CEO of Spaceport America, watches the Virgin Galactic WhiteKnightTwo carrier aircraft fly over the spaceport on Thursday, August 15, 2019.

Hicks also reportedly spent tens of thousands of dollars traveling to locations of National Space Council meetings, claiming he was appointed to the panel by Vice President Mike Pence or invited to meetings by Pence, although no evidence was found that Hicks was ever belonged to the group or attended meetings. Witnesses told investigators that Hicks “was never able to substantiate anything other than what appeared in the popular press”.

Instead, investigators found evidence that Hicks accepted invitations from industry groups to sponsor receptions, in violation of the anti-donation clause of the New Mexico Constitution, and that De Gregorio knowingly handled retroactive and fake voucher requests for the trips.

The audit also found that Hicks was often booking or reorganizing trips at the last minute, adding to costs and often without a clear business purpose.

Improper settings and other allegations

The McHard report also alleges that Hicks did not act properly in hiring space systems engineer Karen Barker (who is suing the spaceport agency for alleged gender discrimination and retaliation in the workplace prior to their departure in 2019) and business specialist Guillermo Blacker.

In both cases, the audit claims that Hicks bypassed competitive hiring processes to expand jobs to Barker and Blacker, who both previously had “personal and / or professional relationships” with Hicks.

In Blacker’s case, the audit states that Hicks rewritten the job description so that the position was reported directly to him instead of De Gregorio.

In 2019, the audit revealed that De Gregorio and Holdridge were both involved in efforts to secure a raise for Hicks, whose salary at that time was $ 153,000, but without formal approval from the full board. However, the increase “never came to fruition,” says the report.

Hicks is also accused by investigators of falsely telling Keyes that Spaceport America had a strategic plan when such a document did not even exist in “viable” draft form.

From left: Dan Hicks, CEO of Spaceport America, and John Floros, President of New Mexico State University, at a reception for Spaceport's new office suite on the NMSU campus on Wednesday, September 11, 2019.

Witnesses reportedly told the auditors, “Mr. Hicks has discussed the fact with the staff that there is no strategic plan but stated that he can just write it over a weekend if they really need one.”

The audit also found evidence that Hicks had intercepted the email communications and recommended further investigation into possible violations of the New Mexico Code of Conduct.

Shortly after De Gregorio filed his complaint about Hicks’s management last June, he reportedly lost access to his email account for a few days.

The auditors found that Hicks had asked an IT specialist at the spaceport to access De Gregorio’s email account and forward some articles to Hicks. In addition, the reviewers state that when Barker left her job at the spaceport last year, Hicks intercepted her email “for some time” and responded to industry contacts trying to reach her.

Without access to Barker’s emails, the audit found, “We were unable to determine if Mr. Hicks replied to any of Ms. Barker’s emails while posing as Ms. Barker. We suggest continuing to do so examine. ”

Former tax officer under scrutiny

The whistleblower Zach De Gregorio was also audited by the auditors.

McHard’s report states that DeGregorio was wrongly involved in bidding for a construction billing contract in 2018 that allowed him to outsource key functions of his own job.

In particular, the auditors found that De Gregorio was on the selection committee for the contract despite being a reference for a bidder, Fiore Industries, who won the contract. De Gregorio reportedly later expanded the scope (and cost) of the contract without subsequent approvals.

The auditors also discovered a 2019 notice from De Gregorio to Hicks alleging that he was negotiating with an outside auditing firm to reduce the size of the agency’s annual audit because a previous auditing firm was “overly aggressive”.

If the trial did indeed take place, the report states that it would constitute a violation of professional standards for accountants and recommends further investigation.

The Sun News asked De Gregorio for an answer.

This is a developing story and will be updated with additional details from the report.

Read Spaceport America’s dedicated audit report here:

Algernon D’Ammassa can be reached at 575-541-5451, [email protected], or @AlgernonWrites on Twitter.

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