Former Advisor and Campaign Manager for Lujan Grisham, Lobbies Governor Behind Closed Doors for BCP, NM Gas Company Buyer

November 20, 2024 Editor

Dominic Gabello, Former Senior Advisor and Campaign Manager for Governor Lujan Grisham, Arranged Meeting With Governor for His Client, Bernhard Capital Partners (BCP) – Prospective New Owner of New Mexico Gas Company.

“I’m writing to request a meeting with Gov. Michelle Lujan Grisham with my client, Bernhard Capital Partners (BCP) anytime between September 25-27. It was announced in August that BCP is acquiring New Mexico Gas Company. Executives from BCP would like to meet the Governor
and talk about their vision for the company and how the acquisition is progressing.
Let me know if you have any questions.” – Dominic

So wrote Dominic Gabello to Governor Michelle Lujan Grisham’s Chief of Staff Daniel Schlegel and executive assistants Stella Sandel and Mackenzie Isom, on September 6, 2024.

According to the Governor’s official work schedule, Gabello and his clients met with the Governor on Friday, October 11, 2024, between 10:00 AM – 11:00 AM.

Gabello, although filing as a lobbyist for at least three other entities since he left state employment as a senior advisor to Governor Lujan Grisham in 2021, has not filed as a lobbyist for Bernhard Capital Partners (BCP).

The Candle texted and emailed Gabello at the cell number and email address he included in his communication with Schlegel, Sandel and Isom, seeking an explanation for not filing with the Secretary of State as a lobbyist for BCP. He was also asked to produce the names of attendees and subject matter of the meeting.

A similar request for information was made of the Governor’s communication team seeking an interview or at least a statement regarding the subject matter and attendees at the meeting the Governor held with Gabello and other BCP representatives.

Gabello and the Governor’s team have not responded – essentially they are silent to public inquiry about this meeting.

According to Bloomberg.com, Bernhard Capital Partners Management LP (BCP) is a private equity firm, investing in various energy related businesses, “including upstream, midstream, downstream, and power verticals.”

As such, BCP is investing in energy production and related infrastructure and retail energy across the United States – most recently closing a deal to buy New Mexico Gas Company.

Why is Gabello and BCP meeting with the Governor important to the people and state government of New Mexico?

Firstly, New Mexico ranks as the second highest oil producing state and the fifth highest dry natural gas (consumer-grade natural gas) producing state in the United States (which produces the highest amount of natural gas in the world).

Secondly, natural gas is a primary feed stock (along with the potential use of produced water – fracking wastewater) for the development of hydrogen power, which Governor Michelle Lujan Grisham, along with her Environment Department Secretary James Kenney and her Infrastructure Advisor Rebecca Roose, have championed as an energy sector they want to invest in.

(And another not so insignificant fact, the deal that BCP has penned to buy New Mexico Gas Company will need approval from a majority of the three New Mexico Public Regulations Commission members – all three of whom are appointed by the Governor.)

According to the portfolio link on its website: “BCP seeks to proactively identify attractive investment opportunities by relying on its broad network of relationships, deep domain experience, and a strong reputation built over decades of operating and investing in infrastructure services.”

In New Mexico state government, legislators, like Democratic Speaker Javier Martinez, Democratic House Appropriations Chair and Vice Chair Nathan Small and Meredith Dixon (shown l to r), along with Democratic House member Patty Lundstrom are in virtual lock-step with the Governor’s team in pressing for expanded use of state revenues for hydrogen development, produced water and the Governor’s Strategic Water initiative, which would enable private-equity funds to prop up and enrich their corporate profits.

ProPublica has an informative report entitled “What Private Equity Firms Are and How They Operate.” The following is quoted from that report:

“Private equity funds are pooled investments that are generally not open to small investors. Private equity firms invest the money they collect on behalf of the fund’s investors, usually by taking controlling stakes in companies. The private equity firm then works with company executives to make the businesses — called portfolio companies — more valuable so they can sell them later at a profit.”

When private-equity funds are used to buy public utilities (or partner with government agencies on infrastructure), the public’s view and interest takes a backseat to the profits of the partners of the private-equity fund.

In a story published in The Atlantic about a year ago, and entitled , “The Secretive Industry Devouring the U.S. Economy,” Rogé Karma wrote of the potential negative impact of the private-equity industry on, among other things, the transparency of economic investment.

Private equity firms have been on the rise in investment markets in the United States – reducing the number of publicly traded companies (which have more regulation and transparency responsibilities than private equity firms) from about 8,000 in 1996 to fewer than 4,000, according to Karma’s reporting.

A subheading of Karma’s article notes, “Private equity has made one-fifth of the market effectively invisible to investors, the media, and regulators.”

And private equity fund companies like BCP are now courting state and local government partnerships to expand their advantage in accessing billions of dollars the federal and state governments have available to invest in public infrastructure.

Because of that, there is an even stronger need for more oversight of the Governor and legislative leaders actions if they try to go down the road using the states regulatory systems to rubber stamp deals like BCP’s purchase of New Mexico Gas Company and use the public’s financial resources for deal-making with private equity firms like BCP for infrastructure.

Transparency is Critical for Protection of Public Investment

As Karma warns of the potential lack of transparency with private equity funds in The Atlantic article,

“…This gives the fund total control, which in theory allows it to find ways to boost profits so that it can sell the company for a big payday a few years later. In practice, going private can have more troubling consequences. The thing about public companies is that they’re, well, public. By law, they have to disclose information about their finances, operations, business risks, and legal liabilities. Taking a company private exempts it from those requirements.”

In a nod to the economic history that produced the stock market collapse of 1929 and the Great Depression, Karma ended his October 2023 story with this warning:

“Nearly a century ago, Congress concluded that the nation’s economic system could not survive as long as its most powerful companies were left to operate in the shadows. It took the worst economic cataclysm in American history to learn that lesson. The question now is what it will take to learn it again.”

Deals and meetings involving the plans of companies like BCP need to be seen in full sunlight – not hidden behind the closed doors of the Governor’s office, arranged by former officials such as Gabello, whether he registers as a lobbyist or not.