TRUTH OR CONSEQUNCES, New Mexico — An audit made public that was part of an investigation into the conduct of Spaceport America’s former chief executive details what officials call a severe breakdown of internal controls that resulted in possible taxpayer funding waste and abuse.
The report was released this week by the state auditor’s office after it was prepared by an independent forensic accounting and finalized in early November.
“People in positions of power more easily have the opportunity to misuse and abuse their authority," State Auditor Brian Colón said in a statement. "It is crucial we hold people in power accountable. The tone at the top must be transparent and committed to honesty, integrity, and accountability.”
Dan Hicks, who was appointed by spaceport authority board members in 2016 to lead Spaceport America, was placed on administrative leave earlier this year after former financial officer Zach De Gregorio accused him of circumventing internal financial controls and accounting procedures. De Gregorio later resigned, and Hicks was eventually fired.
Hick has declined to comment on the allegations, citing the investigation.
The state Economic Development Department paid the accounting firm to review procurement procedures and agreements governing the gross receipts tax and the use of revenue generated by the tax. The state auditor’s office also reviewed financial aspects related to the spaceport.
The report is based on interviews with Hicks and spaceport staff along with emails, documents and other information gathered during the three-month investigation. It details improper procurement, excessive travel spending and a lack of financial oversight going back several years.
State officials say they have started to address the transparency and oversight concerns.
“It is now time to move forward and repair the breakdowns that allowed these abuses to happen,” said state Economic Development Secretary Alicia J. Keyes, who became chair of the Spaceport Authority Board in May.
Scott McLaughlin, the spaceport's operations director and an aerospace engineer, has been serving as the interim head of Spaceport America since late June. He will continue to lead the spaceport until the board hires a permanent director.
The board is scheduled to meet next on Dec. 2.
Located in a remote stretch of southern New Mexico, Spaceport America is billed as the world’s first installation built specifically for the burgeoning commercial space industry to ferry paying passengers to the lower fringes of space and launch other payloads into orbit.
The idea to build the desert outpost was first hatched years ago by British billionaire Richard Branson and former Gov. Bill Richardson.
While commercial flights have yet to begin, Virgin Galactic — the spaceport’s anchor tenant — is preparing for its first space test flight from the facility.
The flight was planned for last week but public health restrictions prompted by the pandemic forced a delay.