Lawsuit: City leaders attempted to use Risk Management as a ‘slush fund’

A former city manager within the Risk Management Division filed a whistleblower lawsuit against the City of Albuquerque on May 17 citing intimidation, false accusations and disregard for workplace safety laws concerning asbestos at the Gateway Center. 

The lawsuit was filed by Jeanette Chavez, an official within Risk Management who was one of the first city officials to raise alarms about asbestos in the active work areas at the Gateway Center. She also alleges that city leaders were attempting to use the Risk Management fund as a “slush fund” to pay out funds illegally. 

The lawsuit alleges that in February 2023, Chavez warned her direct supervisors and other top city officials about the dangerous exposures to asbestos occurring during the demolition, renovation and remodeling project at the Gateway Center. According to the lawsuit, that’s when top city officials turned on Chavez, and “created a hostile work environment by their threats and actions, causing her concern for her continuing employment.” 

The lawsuit goes on to say, “City officials including the CAO [Lawrence Rael] and CFO, Sanjay Bhakta who was Ms. Chavez’s upline supervisor, would yell at her when she brought up her concerns about the asbestos exposure issues at the Gateway project.” 

Specifically, Chavez said she was concerned about continued exposure to city employees, other occupants of the building and public visitors to the worksite. 

City Desk ABQ reached out to Rael, Bhakta and city administration for comment. Rael and Bhakta did not respond, but a city spokesperson said they could not comment on pending litigation.

‘Too many notices’

According to the lawsuit, on May 19, 2023, Chavez directed Risk Management to send out notices of possible exposure to workers, employees and members of the public who the city knew had visited the Gateway Center. 

In the lawsuit, Chavez says that shortly after sending out the notices, the CAO, [Rael,] “criticized Ms. Chavez for sending out too many notices.” Chavez told Rael that she was legally required to inform anyone known to have been exposed to asbestos. 

Shortly after sending out the notices, Chavez says in the lawsuit that city administrators made false accusations that Chavez and the Risk Management Division were encouraging construction workers to file a class action lawsuit against the city based on their asbestos exposure. 

The city’s Inspector General’s Office (OIG), investigated the claims of retaliation and intimidation. An OIG report filed in August 2023, found that Chavez’s claims were substantiated and that she and her staff were being retaliated against for participating in the OIG investigation into the asbestos project at Gateway. 

‘Slush Fund’

Bhakta would “pressure her to spend money from the Risk Management funds that were not authorized by the City’s policies and procedures for the use of Risk Management funds,” the lawsuit states. 

Chavez says that she became concerned that city administration viewed Risk Management funds as a form of “slush fund” for paying out funds that didn’t meet the legal requirements. The lawsuit says Chavez was alarmed when she learned that Bhakta and others in the administration were attempting to change the City Risk Manual policies and remove her from her authority over those funds. 

Chavez worked for Risk Management from early 2019 until October 2023. In late September, she resigned, and one of her last duties was supposed to be answering questions from the City Council and other officials concerning Risk Management, including about asbestos abatement. 

Three days before that scheduled meeting, she was asked to go home on sick leave until her final date of employment on Oct. 6. The practice of awarding large sick leave bonuses to top officials departing during controversy — and then letting them claim sick leave while not being sick — is contrary to written policy.

As first reported by City Desk ABQ earlier this month, the city’s inspector general has confirmed that she is investigating those practices.