By Zelie Pollon
SANTA FE, New Mexico (Reuters) - New Mexico Governor Susana Martinez's administration said it suspended two finance officials this week in an embattled city where a state audit found public money had paid for prostitutes for two other city officials.
The suspensions of Sunland Park Finance Director Helen Gonzalez and Purchasing Agent Neryza Rivera follow an auditor's report that found vast mismanagement of funds, including the payments for prostitutes for former mayor pro tem Daniel Salinas and another city official.
"The extraordinary level of financial mismanagement in Sunland Park is unacceptable," Martinez said in a statement. "Protecting public funds will be our highest priority."
Sunland Park has been embroiled in controversy since Salinas, who was elected mayor in March, was blocked by the state supreme court from being sworn in - or even setting foot in city hall - because of charges he tried to extort his opponent in the mayoral race with a tape showing the opponent receiving a lap dance from a stripper.
Salinas, 28, remains in jail, and last month the city council chose 24-year-old Javier Perea, a business student who used to sell diamonds in a mall, as the town's new mayor.
But the state attorney general ruled later that month that the election was void, and Perea resigned.
Meanwhile, the state auditor found that more than $42,000 in public funds from the city's Border Crossing Fund paid for prostitutes for Salinas and the city's former public information officer, and also paid for a private investigator to film a video used to extort Salinas' mayoral opponent.
Other findings included improperly forgiving some $200,000 in utility bills for residential customers and violating a competitive bidding requirement in the awarding of a $2.4 million contract to EnviroSystems Management Consultants Inc.
The suspended officials will receive a hearing, Clifford said, adding that suspensions of additional city officials were possible.
"Our goal is to establish a properly functioning system of checks and balances to prevent future waste, abuse, and mismanagement of public funds," State Finance Secretary Thomas Clifford said in a statement on Monday.
Sunland City is on the Mexican border and close to the city of El Paso, Texas.
(Editing By Corrie MacLaggan and Eric Walsh)