NM AG: Excess Local Tax Revenues Improperly Spent to Support Spaceport America Operations

The Virgin Galactic Gateway to Space terminal hangar facility (center), Spaceport Operations Center (Left) and “Spaceway” (Runway) at Spaceport America. (Credit: Bill Gutman/Spaceport America)

by Douglas Messier
Managing Editor

Excess local tax revenues collected to support Spaceport America have been improperly spent on the facility’s operational costs, the New Mexico Attorney General’s Office has concluded.

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Video of My Appearance on the Tipping Point New Mexico Podcast

Posted by Douglas Messier on Monday, December 21, 2020

On Monday, I joined Rio Grande Foundation President Paul Gessing for an episode of the Tipping Point New Mexico podcast. We talked about the latest developments involving Virgin Galactic and Spaceport America. Topics include:

  • aborted SpaceShipTwo flight test of Dec. 12
  • reasons for 22-month delay in powered flights
  • new Virgin Galactic CEO Michael Colglazier’s extravagant vision for the space tourism company
  • why Virgin Galactic hasn’t been able to deliver on promises made to New Mexico taxpayers
  • shakeup in the management at the New Mexico Spaceport Authority, and
  • recent audit that recommended former Spaceport America Executive Director Dan Hicks and ex-CFO Zach DeGregorio be invested for possible criminal charges.

Enjoy!

Spaceport America Board Approves Spending $20 Million for New Capital Projects

The Virgin Galactic Gateway to Space terminal hangar facility (center), Spaceport Operations Center (Left) and “Spaceway” (Runway) at Spaceport America. (Credit: Bill Gutman/Spaceport America)

by Douglas Messier
Managing Editor

Fresh off a stinging report saying that it failed to properly oversee a state-owned facility rife with fraud, waste and abuse, the New Mexico Spaceport Authority (NMSA) Board of Directors approved spending up to $20 million on capital improvements to Spaceport America.

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Report Recommends Former Spaceport America Executives be Investigated for Possible Criminal Charges

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)
  • Outside investigation concluded former Executive Director Dan Hicks ignored spending regulations, submitted falsified travel documents, and wasted hundreds of thousands of dollars on unnecessary travel and unrealistic projects
  • Hicks portrayed by staff as an incompetent manager who bullied employees
  • Ex-CFO Zach DeGregorio facilitated Hicks’ violations by improperly approving travel and ignoring rules and statutes
  • Former New Mexico Spaceport Authority Board Chairman Rick Holdridge accused of allowing violations to continue

by Douglas Messier
Managing Editor

A highly critical investigation of Spaceport America has determined the New Mexico state government should consider formal criminal and/or administrative charges against former Executive Director Dan Hicks and former Chief Financial Officer (CFO) Zach DeGregorio for their mishandling of the spaceport’s finances.

“As detailed above, there is evidence to conclude that Dan Hicks violated criminal and administrative statutes, as well as the State of New Mexico Governmental Compliance Act, and Governor Lujan Grisham’s Code of Conduct, during his tenure as Director of the Spaceport,” the report said.

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Board Fires Spaceport America Executive Director Dan Hicks

Daniel Hicks

The New Mexico Spaceport Authority (NMSA) has terminated Spaceport America Executive Director and CEO Dan Hicks four months after he was placed on administrative leave amid an investigation into alleged financial mismanagement and abuse of authority.

The Las Cruces Sun-News reports the board voted 5-1 to remove Hicks after discussing his status in closed session for about an hour. Board members did not comment on the reason for the dismissal.

Hicks, who was hired in 2016, was placed on leave in June after former CFO Zach De Gregorio submitted a complaint that alleged the spaceport CEO had created a toxic work environment and removed adequate internal controls on the expenditure of funds.

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Spaceport America CEO Being Investigated for Alleged Criminal Acts

Daniel Hicks

Some of the allegations against suspended Spaceport America CEO Dan Hicks are of a criminal nature, a New Mexico official has revealed. The Sante Fe New Mexican reports:

A wide range of allegations against Hicks are being looked into, including possible violations of the state procurement code, potential financial mismanagement such as improper spending, alleged disbursement of gross receipts tax revenue for unauthorized purposes and possible conflict of interest, Economic Development Department Secretary Alicia Keyes said.

“After the investigators initially came on and did some interviews, they informed us this is a potential criminal violation,” the secretary, who is also chairwoman of the spaceport’s board, told lawmakers at a Legislative Finance Committee meeting held virtually and in person in Red River.

Hicks, who has headed the spaceport since 2016, was placed on administrative leave in June when former Chief Financial Officer Zach De Gregorio submitted a complaint accusing Hicks of pressuring him to ignore procedures that provide accountability for the spending of public money.

Two separate investigations are underway into the charges and the spaceport’s finances.

Multiple Investigations Ongoing into Spaceport America Finances

Daniel Hicks

The Santa Fe New Mexican reports that State Auditor Brian Colón is investigating the New Mexico Spaceport Authority (NMSA), and the state Economic Development Department has hired an outside accounting firm to perform an independent forensic audit of the organization that runs Spaceport America.

The investigations followed claims by NMSA’s former chief financial officer that CEO Dan Hicks had pressured him to ignore accounting procedures. Hicks is currently on administrative leave pending the outcome of the inquiries.

Colón said Monday he couldn’t release the complaint that prompted him to open the investigation, but said he began the inquiry in June, one day after former Chief Financial Officer Zach De Gregorio resigned, citing frustration with the New Mexico Spaceport Authority Board’s response to his whistleblower complaint about CEO Dan Hicks’ alleged attempts to get him and others to circumvent accounting protocols.

“Daniel Hicks has shown gross mismanagement and abuse of authority,” De Gregorio wrote in his complaint. “He has consistently applied pressure to the CFO and the accounting staff to bend the rules. This pressure has reached the point where I feel like my ethical ability to act as a check and balance for financial decisions in the Agency is compromised. This has created a toxic environment where there is no longer adequate internal controls at the NM Spaceport Authority, which could lead to fraud.”

De Gregorio also accused Hicks of attempting to block and interfere with his communications with state Economic Development Department Secretary Alicia Keyes and the Spaceport board.

“Daniel Hicks often talks about that it is his money and his authority and he should be able to do what he wants,” DeGregorio wrote in his complaint. “Zach De Gregorio reminds him that it is the State of New Mexico’s money and the board’s authority and the Agency has to follow the process.”

The newspaper also reports that former NMSA employee Karen Barker has filed a complaint saying Hicks had created a toxic work environment and retaliated against her after she complained she was being paid less male counterparts.

Spaceport America Interim CEO Appointed Amid Ethics Investigation

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)

The New Mexico Spaceport Authority appointed business development director Scott McLaughlin as interim CEO of Spaceport America as an investigation continues into suspended CEO Dan Hicks.

The Las Cruces Sun News reports:

McLaughlin, an Albuquerque native and New Mexico State University alumnus who began working for the spaceport in 2019, introduced himself at a meeting of the New Mexico Spaceport Authority’s board of directors Friday morning. The meeting was conducted via video conference. 

Melissa Force, who briefly stepped in as interim director, continues to serve as the spaceport’s full-time general counsel. 

Hicks, the spaceport’s CEO since 2016, is on administrative leave pending an investigation into a complaint by the spaceport’s former chief financial officer, Zach De Gregorio.

The complaint, submitted in June, accuses Hicks of undermining internal accounting controls and interfering with communications between De Gregorio and state Economic Development Secretary Alicia Keyes, who chairs the NMSA board. 

Keyes said a report should be available for the board’s review in two to three weeks.

Spaceport America CEO Placed on Administrative Leave

Daniel Hicks

The Las Cruces Sun News reports that Spaceport America CEO Dan Hicks, who has led the organization since 2016, has been placed on administrative leave.

New Mexico Economic Development Secretary Alicia Keyes, who chairs the New Mexico Spaceport Authority’s board of directors, confirmed Thursday that Hicks was on leave pending an investigation, but did not provide further details. 

Hicks did not immediately respond to a query from the Sun-News.

He succeeded Christine Anderson, who served as the spaceport’s CEO from 2011 until her retirement.

Previously, Hicks served for 34 years at White Sands Missile Range, ultimately assisting WSMR’s commanding general and its executive director. The Las Cruces native graduated from Las Cruces High School, earned his bachelor’s degree in mechanical engineering from New Mexico State University and received an honorary selection to NMSU’s Mechanical and Aerospace Engineering Academy.

Spaceport America Welcomes SpaceShipTwo Unity to New Mexico

TRUTH OR CONSEQUENCES, NM (NMSA PR) — Virgin Galactic Holdings, Inc., a vertically integrated aerospace company, has successfully completed another vital step on its path to commercial service, relocating SpaceShipTwo, VSS Unity, to its commercial headquarters at Spaceport America’s Gateway to Space building.

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Collaboratory Formed to Promote New Mexico’s Spaceport America During Closed Door Meeting

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)

by Douglas Messier
Managing Editor

Officials from New Mexico, the federal government and Virgin Galactic met last week behind closed doors for the state’s first Space Valley Summit to form a “collaboratory” to promote Spaceport America and the state’s aerospace economy.

The one group not invited: taxpayers who have forked over about $250 million to build the spaceport where Virgin Galactic is the anchor tenant. As the Las Cruces Sun News dryly noted

Minutes after [Gov. Michelle Lujan Grisham] exhorted the summit to “make sure every New Mexican … knows exactly what is happening here,” all reporters were asked to leave. 

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NMSU, Spaceport America to Announce STEM Partnership, Unveil Spaceport America’s New Las Cruces Office

Las Cruces, NM – Arrowhead Center at New Mexico State University hosted a reception on Wednesday celebrating Spaceport America’s new home in Las Cruces, as well as a new collaborative agreement between NMSU and Spaceport America.

The reception also celebrated the signing of a memorandum of agreement between Spaceport America and NMSU to form a collaborative effort to advance student success in the STEM fields, along with research, economic development and community outreach.

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SpinLaunch Breaks Ground for New Test Facility at Spaceport America

SPACEPORT AMERICA, NM, May 7, 2019 (Spaceport America PR) — Spaceport America, the world’s first purpose-built commercial spaceport, and SpinLaunch, an innovative new space company revolutionizing access to space, today celebrated the ground-breaking of SpinLaunch’s future test facility at Spaceport America.

Attending the groundbreaking ceremony was Dan Hicks, CEO, Spaceport America, Alicia Keyes, Cabinet Secretary for Economic Development for the State of New Mexico, and Jonathan Yaney, founder and CEO of SpinLaunch, among New Mexico government and business leaders, and students from area universities.

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Results of EXOS Aerospace SARGE Launch at Spaceport America

SARGE launch at Spaceport America. (Screenshot from Exos Aerospace webcast)

Spaceport America, NM and Greenville, TX (EXOS Aerospace/Spaceport America PR)Spaceport America, the world’s first purpose-built commercial spaceport and EXOS Aerospace Systems & Technologies, Inc., a leading developer of reusable space launch vehicles based in Greenville, Texas, announce a successful test launch of their newest vehicle, SARGE.

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EXOS Aerospace Prepares for Launch from Spaceport America

SPACEPORT AMERICA, N.M. and CADDO MILLS, Texas, Jan. 23, 2018 (Spaceport America PR) — Spaceport America, America’s first purpose-built commercial spaceport, and EXOS Aerospace Systems & Technologies, Inc., a leading developer of suborbital reusable space launch vehicles based in Caddo Mills, Texas, announce significant progress towards launch of their newest vehicle, the Suborbital Active Rocket with GuidancE, or SARGE.

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