New Mexico attorney general sues university over 'golden parachute' payment to outgoing president

ALBUQUERQUE, N.M. — New Mexico’s top prosecutor is suing Western New Mexico University's regents and outgoing president to try to undo a lucrative severance package that included a nearly $2 million payout approved in the wake of a scathing report that detailed wasteful spending and lax financial oversight at the school.

State Attorney General Raúl Torrez outlined a number of allegations that included breaches of fiduciary duty and violations of the state's open meetings law and state constitution. He also raised questions about who at the university rushed to issue a check to Shepard, noting that some regents already had resigned amid pressure from the governor.

The attorney general's office initially filed an emergency motion in state district court seeking to delay any payouts to Shepard, not knowing that a check already had been issued on Jan. 2.

The state is now seeking to prohibit Shepherd from spending the money and asking the court to establish a trust where it could be deposited until the legal dispute is resolved.

Despite requests for documentation from the university, Torrez said his office has not received any records that would show who initiated the negotiations around Shepard's departure. He suggested the process has been tainted by greed and arrogance and that students will pay the price.

“It is absolutely disgraceful that the people who have been entrusted with making sure that they get the education they need to build a better future have instead used that opportunity to enrich themselves, to go on lavish taxpayer funded trips, and then when they are held to account, to hand out a golden parachute to one of their pals," Torrez said. That will not stand.”

Shepard's legal team disputed the attorney general's claims, saying regents are responsible for negotiating and approving executive compensation and severance agreements and that notices appeared in the local newspaper that the board would be discussing the president's contract during a Dec. 20 meeting.

John Anderson, an attorney for Shepard, said in a statement to The Associated Press that the board had appointed a subcommittee to negotiate the separation agreement before unanimously approving it.

“This entire process was handled appropriately, legally and transparently,” Anderson wrote. “Dr. Shepard did not expedite his payment. Any allegations to the contrary have no legal or factual basis.”

According to court documents, the university agreed to pay Shepard more than three times the amount required if it had terminated his employment without cause. The agreement also guarantees Shepard a spot as a tenured faculty member, earning at least $200,000 annually for five years. He can serve remotely and was given an eight-month sabbatical with full pay.

The leadership shakeup follows an investigation by the state auditor's office that found more than $363,000 in wasteful spending and improper use of public funds.

State lawmakers started raising questions in 2023 about Shepard's spending on international trips and on high-end furniture and about his wife, Valerie Plame’s, use of a university purchasing card. At the time, Shepard said regents vetted his spending requests and that he was familiar with policies governing the use of public money.

The events could prompt lawmakers to consider new legislation during the session that begins this month.

House Speaker Javier Martinez on Thursday said he would support changes to ensure public institutions are managed in the best interests of students and taxpayers, rather than for personal enrichment of university officials.

“At the end of the day, this is about safeguarding the money of the people of the state of New Mexico, and this is about ensuring that no one is above the law,” he said.