updated 9/17/2005 2:00:49 AM ET 2005-09-17T06:00:49

New Mexico’s state treasurer and his predecessor were charged Friday with racketeering, accused of steering state business to investment advisers in return for hundreds of thousands of dollars in kickbacks.

Treasurer Robert Vigil and former Treasurer Michael Montoya, both Democrats, allegedly received the kickbacks from three financial advisers who were paid commissions for helping invest public funds, according to an affidavit.

They appeared briefly in federal court Friday and were released on their own recognizance.

“Public funds should never be used like private ATM machines,” U.S. Attorney David Iglesias said while announcing the charges at a news conference.

If convicted, both men face up to 20 years in prison for each of two counts of racketeering and interference with commerce.

Vigil said after the hearing that he would plead not guilty and planned to continue serving as treasurer.

“I feel I’ve done a great job and continue to do a great job,” Vigil said.

Montoya did not speak with reporters after the hearing, and calls to his home went unanswered later Friday. It was not immediately known whether Montoya had a lawyer; he appeared in court without one.

Investment adviser Peter Simons cooperated with the FBI in exchange for immunity. He said he paid Montoya part of his commissions and personally delivered cash to Montoya three times — in amounts ranging from $4,000 to $10,000, according to an affidavit.

Another adviser allegedly paid Montoya $632,000 and Vigil $54,000. It was unclear whether the other two advisers would face charges.

Other kickbacks to Vigil allegedly came in the form of tickets to political fundraisers and donations to charities in which his wife participated.

Montoya served as state treasurer from 1995 to 2002. Vigil was elected to a four-year term in 2002.

The two have worked together in the past. Vigil served as deputy treasurer under Montoya, and when Vigil was auditor, he hired Montoya in 1992 as head of the agency’s Medicaid fraud unit.

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