Tuesday, January 6, 2009
Richardson Resigned Over Pay-To-Play Probe
SANTA FE, N.M. -- Gov. Bill Richardson's gold-plated resume had never been tarnished as he moved up the political ladder from congressman and diplomat to governor.
But a day after backing out of consideration for U.S. commerce secretary, Richardson faced a murky political future as a grand jury probed a possible pay-to-play deal involving one of his big political donors.
Among the looming questions: Was a $1.5 million state contract awarded to that California donor in exchange for political contributions? And if so, how close was Richardson or his staff to any illicit dealmaking?
Richardson, who has hired a prominent white-collar attorney to represent him in the probe, declined to comment on the scandal Monday citing the ongoing investigation.
He has maintained he would be cleared in a grand jury probe, and said that stepping down from the Obama administration had pained him.
"Yesterday, I was hurting over this decision," Richardson said Monday. "I lost a Cabinet appointment."
"While this decision was a difficult one, I think it was the right thing to do," Richardson said.
The inquiry is centered on Beverly Hills-based CDR Financial Products and its chief executive David Rubin. Rubin and CDR contributed $100,000 in 2003-2004 to Richardson political committees before and after CDR won a state contract to help finance a $1.4 billion for highway and transportation projects.
The largest donation, $75,000, was given less than two weeks before a state board made a deal with the company to reinvestment bond proceeds. The company earned more than $443,000 in fees.
CDR was hired to be part of a team of banking, investment and financial advisers selected by the New Mexico Finance Authority to assemble a complex bond financing deal for a highway and transportation construction program. The Finance Authority is a quasi-public agency that issues bonds and provides other financing to state and local governments.
Authority officials maintain there was no wrongdoing in hiring CDR. The company was an adviser for so-called interest rate swaps that allowed the state to obtain lower interest costs for the bonds.
"I personally feel that the proper protocol was followed," said Stephen Flance, chairman of the authority board, which approved the firm's selection.
Flance said Monday that he's unaware of any effort by the governor's office to influence the selection of CDR.
Richardson's former deputy chief of staff, David Harris, served as executive director of the Finance Authority when CDR was selected in March 2003 after a competitive bid process. Harris left the job shortly after that to work at a state university.
His successor at the Finance Authority, Bill Sisneros, said CDR's work saved the state an estimated $20 million in interest costs on the bonds and earning about $8 million through the reinvestment of bond proceeds, which are held in escrow until needed to pay for highway projects.
He said the governor's office did not influence the selection of CDR for the bond reinvestment deal.
"I have never been ordered to do business with CDR," Sisneros said.
Sisneros said he periodically briefed the governor's staff on the authority's business dealings. Richardson's chief of staff, David Contarino, would occasionally ask the authority to review financial proposals that had been pitched to the governor's office, Sisneros said.
The contributions to Richardson by CDR and Rubin went to a political committee that helped pay for expenses of Richardson staff and supporters to attend the 2004 Democratic National Convention and another committee that Richardson formed to help register Hispanics and American Indians to vote.
SANTA FE, N.M. -- Gov. Bill Richardson's gold-plated resume had never been tarnished as he moved up the political ladder from congressman and diplomat to governor.
But a day after backing out of consideration for U.S. commerce secretary, Richardson faced a murky political future as a grand jury probed a possible pay-to-play deal involving one of his big political donors.
Among the looming questions: Was a $1.5 million state contract awarded to that California donor in exchange for political contributions? And if so, how close was Richardson or his staff to any illicit dealmaking?
Richardson, who has hired a prominent white-collar attorney to represent him in the probe, declined to comment on the scandal Monday citing the ongoing investigation.
He has maintained he would be cleared in a grand jury probe, and said that stepping down from the Obama administration had pained him.
"Yesterday, I was hurting over this decision," Richardson said Monday. "I lost a Cabinet appointment."
"While this decision was a difficult one, I think it was the right thing to do," Richardson said.
The inquiry is centered on Beverly Hills-based CDR Financial Products and its chief executive David Rubin. Rubin and CDR contributed $100,000 in 2003-2004 to Richardson political committees before and after CDR won a state contract to help finance a $1.4 billion for highway and transportation projects.
The largest donation, $75,000, was given less than two weeks before a state board made a deal with the company to reinvestment bond proceeds. The company earned more than $443,000 in fees.
CDR was hired to be part of a team of banking, investment and financial advisers selected by the New Mexico Finance Authority to assemble a complex bond financing deal for a highway and transportation construction program. The Finance Authority is a quasi-public agency that issues bonds and provides other financing to state and local governments.
Authority officials maintain there was no wrongdoing in hiring CDR. The company was an adviser for so-called interest rate swaps that allowed the state to obtain lower interest costs for the bonds.
"I personally feel that the proper protocol was followed," said Stephen Flance, chairman of the authority board, which approved the firm's selection.
Flance said Monday that he's unaware of any effort by the governor's office to influence the selection of CDR.
Richardson's former deputy chief of staff, David Harris, served as executive director of the Finance Authority when CDR was selected in March 2003 after a competitive bid process. Harris left the job shortly after that to work at a state university.
His successor at the Finance Authority, Bill Sisneros, said CDR's work saved the state an estimated $20 million in interest costs on the bonds and earning about $8 million through the reinvestment of bond proceeds, which are held in escrow until needed to pay for highway projects.
He said the governor's office did not influence the selection of CDR for the bond reinvestment deal.
"I have never been ordered to do business with CDR," Sisneros said.
Sisneros said he periodically briefed the governor's staff on the authority's business dealings. Richardson's chief of staff, David Contarino, would occasionally ask the authority to review financial proposals that had been pitched to the governor's office, Sisneros said.
The contributions to Richardson by CDR and Rubin went to a political committee that helped pay for expenses of Richardson staff and supporters to attend the 2004 Democratic National Convention and another committee that Richardson formed to help register Hispanics and American Indians to vote.
