| SUBSCRIBE | | Why we charge |
|
|
|
Front Page
news state
Saturday, July 05, 2008
Lawmaker Questions Title Insurance PAC Money
By Barry Massey
Associated Press
SANTA FE — The attorney general's office is researching whether the state's gambling laws allow a political action committee of the title insurance industry to raise money by conducting a raffle.
Sen. Cisco McSorley, D-Albuquerque, has asked the attorney general for a legal opinion on whether a raffle this year by the New Mexico Land Title PAC violated state law and whether the PAC should be required to refund the money it raised by selling $50 raffle tickets.
Attorney General Gary King's office is working on the questions posed by the senator and will send an advisory letter to him when a determination has been made on the legal issues, Phil Sisneros, a spokesman for the attorney general, said Thursday.
An overhaul of the title insurance rate-setting system is expected to be a high-profile topic during next year's Legislature and proposed changes could potentially mean less money for the industry.
The industry PAC raised $50,000 through its most recent raffle and netted about $32,000 after expenses, according to a letter on the New Mexico Land Title Association's Web site. Cash prizes were paid to raffle winners.
Edward Roibal, executive director of the association, said the PAC has used raffles to raise money for several years.
"I believe in the past we have sought legal assistance to assure that we're in complete compliance with the law when trying to raise funds for the political action committee," he said. "We don't think there is a problem at this point."
Money raised by the PAC will help the industry prepare for next year's legislative session.
Raffle proceeds "will promote public relations and awareness of the title industry in New Mexico. We will train, promote and maintain a speaker's bureau to meet the educational needs of the NMLTA, our related industries and the general public," Denise Terrazas, president-elect of the association, said in the May letter on the association's Web site.
PACs can make political contributions to candidates.
In 2006, the title industry's PAC contributed about $26,000 to the campaigns of legislators, Gov. Bill Richardson and other state officials, according to campaign finance reports filed with the secretary of state. The PAC has made no political donations so far this year, however.
McSorley is a lawyer and chairman of the Senate Judiciary Committee. In his request to the attorney general last month, McSorley said state law generally prohibited lotteries but there were exceptions for churches, public libraries, "religious societies," county fairs and certain tax exempt organizations.
The New Mexico Land Title Association likely qualifies as a "exempt organization" under gambling laws, McSorley wrote, but "it seems contrary to the intent of the law for the NMLT PAC to fit within this exception."
A campaign finance report last month showed the PAC received almost $27,000 from the "sale of raffle tickets" this year and late last year. The names of people or organizations buying the raffle tickets were not itemized as contributors. Instead, lump sums of money were reported as contributions.
"If this interpretation of the law is allowed to stand then every special interest will launder their contributions through raffles as a mean to keep their identity hidden from public disclosure," said Fred Nathan, executive director of Think New Mexico, which advocates title insurance changes.
A 2007 report by the think tank said home buyers could save millions of dollars if there was price competition in the title insurance market. The industry disagreed with the report's conclusions and recommendations.
People pay for title insurance when obtaining a home mortgage or refinancing a house. The insurance is to provide a guarantee against losses in case of a problem with the ownership records of the property.
The state sets a uniform rate that all title insurance companies must charge. Legislation developed by the Public Regulation Commission, Superintendent of Insurance Morris Chavez and Think New Mexico would have established a cap on title insurance rates and allowed competition among companies on prices below the maximum premium. Richardson turned down requests by the attorney general, the PRC and others to put title insurance on the agenda of this year's 30-day legislative session. The governor said he wanted lawmakers to focus on health care during the session. However, there are no restrictions on the topics that can be considered by the Legislature during its 60-day session in 2009.
Copyright ©2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
E-mail Story
Print Friendly
