A Member of Senate Finance Doesn’t Understand How an Index Fund Works—And Wants to Gamble $75 Billion to Prove It

New Mexico’s sovereign wealth fund—now standing at nearly $75 billion thanks to oil and gas royalties—is the financial engine keeping our public schools, universities, and state budget afloat. In a state where 30 of our 33 counties sit below the national poverty benchmark, you would hope the Democratic lawmakers overseeing the state's finances focus on New Mexico families—and understand the absolute basics of how modern markets, valuations, and trading positions work.

Then there is Las Cruces Democratic Sen. Jeff Steinborn.

Steinborn sits on the powerful 11-member Senate Finance Committee and serves as an advisory member of the Legislative Finance Committee. Yet over the past week, he has put on a masterclass in financial illiteracy and erratic judgment—demanding that New Mexico’s professional investment fiduciaries blow up passive index funds and private venture portfolios to soothe his personal feelings about Elon Musk and satellite Wi-Fi in Eastern Europe.

A Financial Adult Explains Basic Math to a Senator

Last Thursday, Steinborn fired off a press-ready letter to the New Mexico State Investment Council (SIC) demanding that the state "immediately cease" all Russian investments and divest from every company controlled by Elon Musk—explicitly naming Tesla, SpaceX, and xAI—over unverified reports about Ukrainian access to Starlink satellite internet. On his own social media account, the Senate Finance member didn't even know the size of the fund he helps oversee, calling it "$67 billion" when it stands at nearly $75 billion.

On Monday, State Investment Officer Jon Clark had to step in as the adult in the room, and the State Investment Council officially rejected Steinborn's demand. In a formal written response that reads like a polite Finance 101 remedial lesson, Clark explained why Steinborn’s crusade makes zero financial or legal sense:

• You can't trade frozen stocks. Steinborn demanded the SIC "immediately cease" Russian investments. Clark had to remind him that the SIC already voted to divest from Russia back in 2022. The remaining $586,000 in Russian energy stock is frozen globally by international sanctions—meaning it is literally illegal and impossible to trade on any exchange.
• You can't cherry-pick passive index funds for free. Clark explained that New Mexico holds roughly $188 million in Musk-linked companies (just 0.25% of the $75 billion fund), and almost all of that public equity exposure in companies like Tesla and SpaceX sits inside passive index funds. That is the exact same passive index exposure held by hundreds of thousands of everyday New Mexicans in their private 401(k)s and by New Mexico’s military personnel, Sandia and Los Alamos workers, and federal employees in the federal Thrift Savings Plan (TSP) C Fund—where political stock-picking is barred by federal law. To strip Musk’s publicly traded companies out of New Mexico's passive index trackers, the state would have to pull its money out of low-cost index funds and pay Wall Street managers millions in custom fees to build bespoke portfolios—taking money directly out of the pockets of New Mexico schoolchildren.
• You can't force private venture funds to dump xAI. Unlike Tesla and SpaceX, xAI is not a publicly traded stock; New Mexico’s exposure comes indirectly through top-tier SEC-registered venture capital funds like Lightspeed Venture Partners, which just appeared before the SIC on Tuesday for a $120 million AI fund commitment. Under institutional partnership agreements, a state cannot force a venture fund to sell a private company—New Mexico would have to dump its own fund stakes at a massive secondary-market loss.

Violating the Public Trust Guidelines He Claims to Champion

What makes Steinborn’s behavior even more alarming is the legal standard he is asking state officials to break. Under New Mexico law (NMSA 1978, § 6-8-7 and 2.60.25 NMAC), the State Investment Council is bound by the Uniform Prudent Investor Act to maximize risk-adjusted returns for New Mexico beneficiaries "without exception or political consideration."

Even more ironic, Steinborn himself championed the creation of the State Ethics Commission, which enforces New Mexico’s Governmental Conduct Act (NMSA 1978, § 10-16-3(A))—a statute explicitly commanding every legislator to treat their office "as a public trust" and use legislative power "only to advance the public interest and not to obtain personal benefits or pursue private interests." Using a seat on the Senate Finance Committee (which controls the SIC’s annual budget) to pressure independent fiduciaries into a multi-million-dollar political stunt is the exact abuse of public trust New Mexico’s post-"pay-to-play" reform laws were written to stop.

Red Carpet for Shenzhen Next to Our Nuclear Arsenal—Blacklist for SpaceX

If a sitting member of the Senate Finance Committee is suddenly so obsessed with foreign affairs, it raises a serious question about his motives and judgment: Where was Steinborn’s outrage when his own party handed public money to a Chinese-controlled company right next to America's nuclear weapons complex?

As New Mexico Madness exposed in our three-part Project Apollo investigation, Democratic leaders rolled out a $10 million state LEDA commitment and $942 million in county bonds for Ebon Solar—controlled by Chinese national Dong Hu in Shenzhen under China’s Military-Civil Fusion laws—to build a facility at Mesa del Sol directly on the fence line of Kirtland Air Force Base, the Air Force Life Cycle Management Center (AFLCMC), Sandia National Labs, and the Air Force Nuclear Weapons Center. That deal only died in March 2025 because federal national-security regulators (CFIUS) stepped in to block it.

Steinborn sits on the Senate Finance Committee that bankrolls the Economic Development Department and its LEDA fund. Better yet, on March 19, 2025—just four days before the Ebon Solar bond authorization quietly expired—Steinborn and the Senate unanimously voted to confirm NMEDD Cabinet Secretary Rob Black, who helped recruit Ebon Solar from the board of the taxpayer-funded New Mexico Partnership. Steinborn never wrote a single public letter objecting to a PRC-linked company under federal securities fraud litigation setting up shop next to our nuclear enterprise. Instead, he saves his outrage for American innovators like SpaceX and Tesla.

Refusing to Eat His Financial Vegetables

Presented with the facts—that Ukraine already confirmed Starlink access was restored, that Russian shares are legally frozen, and that divesting from Musk would violate fiduciary law while costing New Mexico schools millions in Wall Street fees—any fit financial steward would admit they didn't do their homework and move on.

Instead, Steinborn acted like a child refusing to eat his vegetables, telling The Santa Fe New Mexican this week that he is "not convinced" by the Investment Officer's response and still wants the Council to pursue it.

Worse, Steinborn offered zero alternatives. He has no plan to replace the returns of passive index funds or top Silicon Valley venture partnerships. Nor does he have a backup plan for New Mexico’s own Public Education Department, rural counties, and school districts—including Las Cruces Public Schools in his own backyard, plus rural families in Gallup, Grants, Alamogordo, Silver City, and Reserve—that rely on SpaceX’s Starlink terminals because 25% of New Mexico still lacks basic broadband.

When 30 of New Mexico's 33 counties are battling generational poverty, having a Senate Finance member ignore Chinese deals next to Kirtland Air Force Base while demanding we burn millions in school-fund fees over European Wi-Fi isn't just embarrassing—it is proof that he has no business anywhere near financial oversight.