http://www.washingtonpost.com/wp-dyn/content/article/2009/01/14/AR2009011403242.html
By TIM KORTE
The Associated Press
Wednesday, January 14, 2009; 7:13 PM
ALBUQUERQUE, N.M. -- A former investment officer for the state's educational pension program claims New Mexico taxpayers lost more than $90 million in an alleged "pay-to-play" scheme in which political contributions to Gov. Bill Richardson influenced the awarding of investment business.
Frank Foy says in a lawsuit that the Educational Retirement Board made a $40 million investment through Chicago-based Vanderbilt Capital Advisors and Vanderbilt Financial because of pressure from a Richardson appointee who served as chairman of the pension system's governing board. The investment went bust, as did another for $50 million made through Vanderbilt by the state Investment Council that Foy also claims was the result of political influence.
Foy, chief investment officer at the Educational Retirement Board from 1996-2006, claims Vanderbilt executives later contributed at least $15,100 to Gov. Bill Richardson's failed presidential campaign.
The whistleblower lawsuit was filed in July on behalf of the state under a 2007 law but had been sealed until this week. Plaintiff's attorney Victor Marshall said at a news conference Wednesday that damages could total more than $300 million. Defendants include two of the governor's appointees, Vanderbilt and several of its employees, but the governor himself is not named.
"The reason I came forward was not to inflict harm on the state of New Mexico," said Foy, who contends he was forced to retire from state government last year. "My hope is to help the state recover more than $300 million that is owed to taxpayers and teachers."
Gilbert Gallegos, a spokesman for Richardson, said the governor "is confident that the state agencies named in this lawsuit acted properly and in the best interest of New Mexicans.
"This lawsuit, filed by a disgruntled former employee who was accused of serious misconduct during his time as a state employee, makes absurd claims against state agencies," Gallegos said. "The state will vigorously defend those agencies."
The lawsuit adds to the cloud gathering over Richardson because of pay-to-play allegations. Foy is the first high-ranking state employee to go to court and publicly allege Richardson political appointees helped steer state business to the Democratic governor's campaign contributors.
In announcing his decision to withdraw his nomination as U.S. commerce secretary this month, Richardson expressed concern that the investigation was dragging on and could become an unnecessary distraction to President-elect Barack Obama's economic initiatives.
The governor has denied any wrongdoing in the federal case.
The investments at issue in Foy's lawsuit are collateralized debt obligations _ securities backed by pools of mortgages or other assets. CDOs have sharply dropped in value since a credit crisis erupted more than a year ago as investors abandoned all but the safest forms of debt.
The lawsuit characterizes the investments as "liars' loans, lethal leverage and toxic waste."
The $90 million investment was wired to Vanderbilt in August 2006 but was worthless when the funds collapsed four months later, Foy said. Contributions to Richardson's campaign were made by several Vanderbilt employees in February, June and December 2007.
A spokesman for Pioneer Investments, Vanderbilt's parent company, didn't return messages seeking comment.
Foy said he actively opposed the Vanderbilt transactions and was targeted for retaliation by Education Retirement Board members who acted on instructions from Bruce Malott, the board's chairman and a Richardson appointee, and from a defendant identified as "John Doe No. 2," whose identity remains under seal.
The lawsuit said Malott "insisted that the ERB invest in this particular product from this particular vendor."
Malott, who served as treasurer of Richardson's 2006 gubernatorial re-election campaign, called the lawsuit baseless.
"I simply lost faith in Mr. Foy's appropriateness for the position," Malott said.
Foy was the retirement board's chief investment officer for a decade until he says he "was forced to protect himself" and took a demotion to deputy chief in 2006, a position that protected him from firing without cause.
According to the lawsuit, Foy continued to speak out against "pay-to-play" operations until he retired. He was accused of sexual harassment in December 2007, an allegation the lawsuit contends was "contrived" to force Foy into retirement.
Jan Goodwin, executive director of the Educational Retirement Board, said managers concluded the complaint against Foy had merit "and we took appropriate action."
The lawsuit also alleges that another Richardson appointee, State Investment Officer Gary Bland, and others at the State Investment Council "carried out instructions from John Doe #2 and perhaps others to invest state money in exchange for political contributions or other illegal or improper inducements."
"The state investment officer has not participated in any wrongdoing and will vigorously fight the reckless allegations made today," said Charlie Wollman, a spokesman for Bland.
Foy's lawsuit was brought under a state law that allows private citizens to sue on behalf of the government for claims of fraud against taxpayers. Plaintiffs can receive a share of monetary damages that might be awarded.
Such lawsuits are initially sealed after being filed. Damages can be tripled, which is how Foy arrived at the $300 million figure.
__________
See http://www.washingtonpost.com/wp-dyn/content/article/2009/01/15/AR2009011503269.html for a follow up story that SEC is investigating the allegation.
Thursday, January 15, 2009
Saturday, January 10, 2009
Richardson on Hot Seat
http://www.nytimes.com/2009/01/11/us/11newmexico.html
By JAMES C. McKINLEY Jr. and MICHAEL HAEDERLE
Published: January 10, 2009
SANTA FE, N.M. — Gov. Bill Richardson tried to return to the public routine of being governor last week, cutting ribbons and making announcements, but at every turn reporters peppered him with questions about a federal investigation into whether his aides had steered a consulting contract to a political backer.
The investigation forced Mr. Richardson to forgo a cabinet post in the Obama administration and focused attention on the state’s loose campaign-finance laws. New Mexico is one of a handful of states with no caps on campaign donations and no independent ethics commission to look into conflicts of interest.
“This is the Wild West,” said State Senator Dede Feldman, an Albuquerque Democrat who has pushed a campaign-finance overhaul. “There are few restrictions, there are no limits on campaign contributions.”
Since taking office in 2003, Mr. Richardson has been dogged by accusations that big contributors to his campaign received favors from the state — patronage jobs, infrastructure projects, contracts, approvals from state boards. Those accusations, never proved, have not hurt Mr. Richardson’s popularity.
But now the governor, who has promoted campaign-finance limits in recent years, finds himself on the defensive.
Two of his closest political advisers and campaign aides are under scrutiny by federal prosecutors for their roles in awarding a lucrative contract in 2004 to a bond consulting firm that, around the same time, donated more than $100,000 to Mr. Richardson’s political committees (See this Washington Post article and this Bloomberg story. Also see http://newmexicoindependent.com/14282/feds-looking-at-guv%E2%80%99s-%E2%80%98most-senior-and-trusted-aide%E2%80%99 on David Contarino, http://www.washingtonpost.com/wp-dyn/content/article/2009/01/07/AR2009010702354.html and http://articles.latimes.com/2009/01/08/news/na-richardson8 on Michael Stratton).
“In my view, the state and its officials have done nothing wrong,” Mr. Richardson said Wednesday after a ribbon-cutting in Albuquerque. “They behaved with the best of intentions and the best conduct.”
Another big Richardson supporter, Sonny Otero, a contractor, made a hefty profit in 2006 when the state bought 12 acres of vacant land from him in Santa Fe, paying $3.2 million more than his family’s business paid for it two years earlier.
Before the sale could go through, the Legislature had to amend a land-acquisition bill to enable the purchase of the Otero parcel, and Mr. Richardson signed the bill. Two months after the sale, Mr. Otero made a $50,000 donation to Mr. Richardson’s re-election campaign, part of the $86,000 he has given the governor since 2002.
Mr. Otero said that the State Department of General Services first contacted him about the property and that he never spoke to the governor about the sale. Mr. Richardson’s spokesman, Gilbert Gallegos, said, “The governor had no involvement in and no knowledge of the land deal.”
Some critics say the governor’s problems were inevitable in a system with no restrictions on political donations or any official watchdogs. The state’s lawmakers hold part-time, unpaid positions and rarely have the legislative resources, much less the political will, to investigate the executive branch. Many fear the governor, who has the deep pockets to finance opponents and the power to slash projects in the districts of his political enemies, legislators and lobbyists said.
“We have a system that is wholly out of whack and out of sync with what other states have done and what the federal government has done to try to regulate money and politics,” said Matt Brix of the Center for Civic Policy, a good-government group. “That invites all kinds of problematic situations.”
Before being elected governor, Mr. Richardson, 61, served more than 14 years in the House of Representatives, and under President Bill Clinton he was ambassador to the United Nations and the energy secretary.
Mr. Richardson’s political background, especially his Washington ties, has made him easily the most formidable fund-raiser in state history. He amassed $21 million for his two races for governor alone. An additional $4 million has been donated in recent years to two political action committees he controls, and he raised $24 million for his presidential bid last year.
“Governor Richardson brought us a whole new level of fund-raising here and campaigning that never stops,” said State Senator Tim Jennings, a Democrat of Roswell who has been critical of the governor. “We were always a lot more laid-back before that.”
For his part, the governor, who declined to be interviewed, has maintained that campaign donations do not influence his decisions. In at least two cases, he canceled state contracts his political supporters had won after the deals became public. He also gave back a $10,000 contribution from a company that won a contract to provide health care to prisoners.
Yet in an interview on NBC in 2007, Mr. Richardson acknowledged that giving money to a politician gives the donor “a little bit of an edge.”
“I don’t give any extra access to somebody that contributes,” he said. “But I’ll remember that person, and I’ll say: ‘Jeez, that guy helped me. Maybe I can help them.’ ”
Over the last three years, as the state was rocked by corruption scandals, the governor has pushed measures to limit campaign donations and to form an independent ethics commission, though he failed to get them through the Legislature. In 2006, he signed legislation barring bidders from giving money to public officials during the contracting process.
“The governor has been the single champion for changing the laws in New Mexico,” Mr. Gallegos said. “It’s been an uphill battle.”
Still, he has not stopped taking large contributions from individuals and businesses who want something from the state government.
“We have these problems over and over again, and whether something illegal occurred or not, it’s the system that is really corrupt,” said Steven Robert Allen, the director of Common Cause New Mexico.
One of Mr. Richardson’s biggest individual contributors, for instance, is Paul Blanchard, the president of the Downs at Albuquerque, a racetrack and casino on the state fairgrounds. Mr. Blanchard not only served as the finance chairman of Mr. Richardson’s 2006 campaign, but he, his businesses and his wife, Kandace, have donated $300,000 to Mr. Richardson in the last two statewide elections.
Mr. Blanchard, as a racetrack and casino owner, has many dealings with the state. In May, for instance, the State Racing Commission, appointed by Mr. Richardson, approved a controversial request from Mr. Blanchard to move the racetrack off the fairgrounds to the city of Moriarty and expand its casino operation.
Critics of the governor say there are other examples of Mr. Richardson taking positions that benefit his donors. For instance, Mr. Richardson strongly supported building an interchange off Interstate 25 that is wanted by a California developer, Jim Foster, who plans to build a housing development nearby. Mr. Foster gave $75,000 to the governor during his 2006 re-election campaign and donated the use of his personal jet to the governor for campaigning.
“I support governors who support jobs,” Mr. Foster said.
Mr. Gallegos said the governor supported the interchange because it would create jobs, not because of Mr. Foster’s donation.
One of the largest donors to Mr. Richardson has been Forest City Covington, a joint venture that is developing Mesa del Sol, a 12,900-acre tract of state-owned land just south of the Albuquerque airport.
From 2002 to 2007, Mr. Richardson’s two political action committees, his re-election campaign and his presidential campaign received more than $290,000 in cash and in-kind contributions from Forest City Covington and members of the families that control the company.
In that time, the University of New Mexico’s board of regents, controlled by Mr. Richardson’s appointees, and the state land office engineered a complicated three-way deal that made it possible for the developer to buy a 3,000-acre piece of the tract from the university for $9 million and a share of future profits. Overseeing the deal was the regent’s board president, Jamie Koch, a Richardson appointee and former state Democratic Party chairman.
The Legislature, with strong urging from the governor, also changed state law to let the developer divert tax receipts to underwrite bonds that would be used to pay for infrastructure on the site. In April 2007, Mr. Richardson signed off on legislation authorizing the developer to issue up to $500 million in bonds. Mr. Gallegos said Mr. Richardson supported the project because it would create jobs.
Michael Daly, president of Mesa del Sol, said the company donated to Mr. Richardson’s campaigns to support his pro-business policies, not to win particular legislation.
“Our job is to attract jobs to the state,” Mr. Daly said. “We think he does a great job to attract tenants.”
By JAMES C. McKINLEY Jr. and MICHAEL HAEDERLE
Published: January 10, 2009
SANTA FE, N.M. — Gov. Bill Richardson tried to return to the public routine of being governor last week, cutting ribbons and making announcements, but at every turn reporters peppered him with questions about a federal investigation into whether his aides had steered a consulting contract to a political backer.
The investigation forced Mr. Richardson to forgo a cabinet post in the Obama administration and focused attention on the state’s loose campaign-finance laws. New Mexico is one of a handful of states with no caps on campaign donations and no independent ethics commission to look into conflicts of interest.
“This is the Wild West,” said State Senator Dede Feldman, an Albuquerque Democrat who has pushed a campaign-finance overhaul. “There are few restrictions, there are no limits on campaign contributions.”
Since taking office in 2003, Mr. Richardson has been dogged by accusations that big contributors to his campaign received favors from the state — patronage jobs, infrastructure projects, contracts, approvals from state boards. Those accusations, never proved, have not hurt Mr. Richardson’s popularity.
But now the governor, who has promoted campaign-finance limits in recent years, finds himself on the defensive.
Two of his closest political advisers and campaign aides are under scrutiny by federal prosecutors for their roles in awarding a lucrative contract in 2004 to a bond consulting firm that, around the same time, donated more than $100,000 to Mr. Richardson’s political committees (See this Washington Post article and this Bloomberg story. Also see http://newmexicoindependent.com/14282/feds-looking-at-guv%E2%80%99s-%E2%80%98most-senior-and-trusted-aide%E2%80%99 on David Contarino, http://www.washingtonpost.com/wp-dyn/content/article/2009/01/07/AR2009010702354.html and http://articles.latimes.com/2009/01/08/news/na-richardson8 on Michael Stratton).
“In my view, the state and its officials have done nothing wrong,” Mr. Richardson said Wednesday after a ribbon-cutting in Albuquerque. “They behaved with the best of intentions and the best conduct.”
Another big Richardson supporter, Sonny Otero, a contractor, made a hefty profit in 2006 when the state bought 12 acres of vacant land from him in Santa Fe, paying $3.2 million more than his family’s business paid for it two years earlier.
Before the sale could go through, the Legislature had to amend a land-acquisition bill to enable the purchase of the Otero parcel, and Mr. Richardson signed the bill. Two months after the sale, Mr. Otero made a $50,000 donation to Mr. Richardson’s re-election campaign, part of the $86,000 he has given the governor since 2002.
Mr. Otero said that the State Department of General Services first contacted him about the property and that he never spoke to the governor about the sale. Mr. Richardson’s spokesman, Gilbert Gallegos, said, “The governor had no involvement in and no knowledge of the land deal.”
Some critics say the governor’s problems were inevitable in a system with no restrictions on political donations or any official watchdogs. The state’s lawmakers hold part-time, unpaid positions and rarely have the legislative resources, much less the political will, to investigate the executive branch. Many fear the governor, who has the deep pockets to finance opponents and the power to slash projects in the districts of his political enemies, legislators and lobbyists said.
“We have a system that is wholly out of whack and out of sync with what other states have done and what the federal government has done to try to regulate money and politics,” said Matt Brix of the Center for Civic Policy, a good-government group. “That invites all kinds of problematic situations.”
Before being elected governor, Mr. Richardson, 61, served more than 14 years in the House of Representatives, and under President Bill Clinton he was ambassador to the United Nations and the energy secretary.
Mr. Richardson’s political background, especially his Washington ties, has made him easily the most formidable fund-raiser in state history. He amassed $21 million for his two races for governor alone. An additional $4 million has been donated in recent years to two political action committees he controls, and he raised $24 million for his presidential bid last year.
“Governor Richardson brought us a whole new level of fund-raising here and campaigning that never stops,” said State Senator Tim Jennings, a Democrat of Roswell who has been critical of the governor. “We were always a lot more laid-back before that.”
For his part, the governor, who declined to be interviewed, has maintained that campaign donations do not influence his decisions. In at least two cases, he canceled state contracts his political supporters had won after the deals became public. He also gave back a $10,000 contribution from a company that won a contract to provide health care to prisoners.
Yet in an interview on NBC in 2007, Mr. Richardson acknowledged that giving money to a politician gives the donor “a little bit of an edge.”
“I don’t give any extra access to somebody that contributes,” he said. “But I’ll remember that person, and I’ll say: ‘Jeez, that guy helped me. Maybe I can help them.’ ”
Over the last three years, as the state was rocked by corruption scandals, the governor has pushed measures to limit campaign donations and to form an independent ethics commission, though he failed to get them through the Legislature. In 2006, he signed legislation barring bidders from giving money to public officials during the contracting process.
“The governor has been the single champion for changing the laws in New Mexico,” Mr. Gallegos said. “It’s been an uphill battle.”
Still, he has not stopped taking large contributions from individuals and businesses who want something from the state government.
“We have these problems over and over again, and whether something illegal occurred or not, it’s the system that is really corrupt,” said Steven Robert Allen, the director of Common Cause New Mexico.
One of Mr. Richardson’s biggest individual contributors, for instance, is Paul Blanchard, the president of the Downs at Albuquerque, a racetrack and casino on the state fairgrounds. Mr. Blanchard not only served as the finance chairman of Mr. Richardson’s 2006 campaign, but he, his businesses and his wife, Kandace, have donated $300,000 to Mr. Richardson in the last two statewide elections.
Mr. Blanchard, as a racetrack and casino owner, has many dealings with the state. In May, for instance, the State Racing Commission, appointed by Mr. Richardson, approved a controversial request from Mr. Blanchard to move the racetrack off the fairgrounds to the city of Moriarty and expand its casino operation.
Critics of the governor say there are other examples of Mr. Richardson taking positions that benefit his donors. For instance, Mr. Richardson strongly supported building an interchange off Interstate 25 that is wanted by a California developer, Jim Foster, who plans to build a housing development nearby. Mr. Foster gave $75,000 to the governor during his 2006 re-election campaign and donated the use of his personal jet to the governor for campaigning.
“I support governors who support jobs,” Mr. Foster said.
Mr. Gallegos said the governor supported the interchange because it would create jobs, not because of Mr. Foster’s donation.
One of the largest donors to Mr. Richardson has been Forest City Covington, a joint venture that is developing Mesa del Sol, a 12,900-acre tract of state-owned land just south of the Albuquerque airport.
From 2002 to 2007, Mr. Richardson’s two political action committees, his re-election campaign and his presidential campaign received more than $290,000 in cash and in-kind contributions from Forest City Covington and members of the families that control the company.
In that time, the University of New Mexico’s board of regents, controlled by Mr. Richardson’s appointees, and the state land office engineered a complicated three-way deal that made it possible for the developer to buy a 3,000-acre piece of the tract from the university for $9 million and a share of future profits. Overseeing the deal was the regent’s board president, Jamie Koch, a Richardson appointee and former state Democratic Party chairman.
The Legislature, with strong urging from the governor, also changed state law to let the developer divert tax receipts to underwrite bonds that would be used to pay for infrastructure on the site. In April 2007, Mr. Richardson signed off on legislation authorizing the developer to issue up to $500 million in bonds. Mr. Gallegos said Mr. Richardson supported the project because it would create jobs.
Michael Daly, president of Mesa del Sol, said the company donated to Mr. Richardson’s campaigns to support his pro-business policies, not to win particular legislation.
“Our job is to attract jobs to the state,” Mr. Daly said. “We think he does a great job to attract tenants.”
Friday, January 9, 2009
Richardson's Rise and Stall
http://newmexicoindependent.com/14537/on-bill-richardsons-rise-and-stall
Richardson left the Clinton Administration to earn money. He worked for Kissinger Associates (Henry’s for-profit outfit) and sat on the boards of three oil companies. Also, he was an outside director at Peregrine Systems, a software company that went bankrupt, after which its CEO (a relative of Mrs. Richardson) was charged with securities fraud. Richardson said he was out of the loop.
As Governor, he skirted several scandals involving New Mexico public officials, evaded questions about campaign donations from executives of companies doing business with the state and played nicely with un-appetizing elements of the state Democratic Party.
Despite that and despite a reputation dating back to his congressional days for bullying and arrogance, he got projects off the ground. Still, each achievement seemed calculated to craft an image to exploit in future races –- Richardson, the pro-business liberal.
Thus, the Governor kicked off his reign by cutting income tax rates on the highest brackets. (Cue business applause.) He subsidized trains, movies and space business; environmentalists and intellectuals joined the business boosters and only libertarians grumbled.
He cajoled chambers of commerce into swallowing a modest hike in the minimum wage; thumbs up from business and labor. And while pushing incremental improvements in health coverage, Richardson stonewalled measures the insurance business feared; reformers were disappointed but he’d pleased an industry noted for helping its friends.
This was government tailored neatly to personal ambition.
What to make of him? Here’s a politician so nimble he dances, Astaire-like, right and left, then taps to center stage for his bow — but who never notices (or averts his eyes from) tawdry doings backstage.
I see Bill Richardson as a man of his times.
“Virtue never has been as respectable as money,” Mark Twain once pointed out, but surely the last 25 years have seen the apotheosis of market morality –- i.e., no morality. Oozing into every nook and cranny of American life, it dissolves ethics and justice wherever it seeps.
Permission to digress? Writing about our degraded public life reminds me of former Rhode Island Senator Claiborne Pell, who died last week. In person, he was unassuming and soft-spoken. He thought himself a public servant. In this age of unapologetic materialism, he was quaint, a relic.
A man of our era, Bill Richardson blatantly used public office as a means to an end — his political ascent. I hope he powers out of the stall, but not before rebalancing his priorities, putting New Mexicans’ interests before his.
Richardson left the Clinton Administration to earn money. He worked for Kissinger Associates (Henry’s for-profit outfit) and sat on the boards of three oil companies. Also, he was an outside director at Peregrine Systems, a software company that went bankrupt, after which its CEO (a relative of Mrs. Richardson) was charged with securities fraud. Richardson said he was out of the loop.
As Governor, he skirted several scandals involving New Mexico public officials, evaded questions about campaign donations from executives of companies doing business with the state and played nicely with un-appetizing elements of the state Democratic Party.
Despite that and despite a reputation dating back to his congressional days for bullying and arrogance, he got projects off the ground. Still, each achievement seemed calculated to craft an image to exploit in future races –- Richardson, the pro-business liberal.
Thus, the Governor kicked off his reign by cutting income tax rates on the highest brackets. (Cue business applause.) He subsidized trains, movies and space business; environmentalists and intellectuals joined the business boosters and only libertarians grumbled.
He cajoled chambers of commerce into swallowing a modest hike in the minimum wage; thumbs up from business and labor. And while pushing incremental improvements in health coverage, Richardson stonewalled measures the insurance business feared; reformers were disappointed but he’d pleased an industry noted for helping its friends.
This was government tailored neatly to personal ambition.
What to make of him? Here’s a politician so nimble he dances, Astaire-like, right and left, then taps to center stage for his bow — but who never notices (or averts his eyes from) tawdry doings backstage.
I see Bill Richardson as a man of his times.
“Virtue never has been as respectable as money,” Mark Twain once pointed out, but surely the last 25 years have seen the apotheosis of market morality –- i.e., no morality. Oozing into every nook and cranny of American life, it dissolves ethics and justice wherever it seeps.
Permission to digress? Writing about our degraded public life reminds me of former Rhode Island Senator Claiborne Pell, who died last week. In person, he was unassuming and soft-spoken. He thought himself a public servant. In this age of unapologetic materialism, he was quaint, a relic.
A man of our era, Bill Richardson blatantly used public office as a means to an end — his political ascent. I hope he powers out of the stall, but not before rebalancing his priorities, putting New Mexicans’ interests before his.
Thursday, January 8, 2009
Richardson's Stumble Erodes Clout at Home
http://online.wsj.com/article/SB123138046278863199.html
JANUARY 7, 2009, 10:42 P.M. ET
By STEPHANIE SIMON
SANTA FE, N.M. -- Gov. Bill Richardson is returning to work in a weakened political state.
The New Mexico governor's withdrawal as nominee for commerce secretary could embolden his opponents -- not just Republicans, but also conservative Democrats intent on reining in state spending. And his return comes as New Mexico had already lost much of its voice in Washington.
Just a few months ago, New Mexico was riding high, enjoying national stature as a battleground in the presidential race and reaping a windfall in revenue from energy-production taxes. But the state treasury has taken an enormous hit from the collapse of energy prices. This year's $6 billion budget quickly developed a shortfall of nearly $500 million.
Lawmakers had planned to deal with the crisis by working with Lt. Gov. Diane Denish, who was set to take over the state's top job as soon as Mr. Richardson was confirmed as commerce secretary. Now, abruptly, Mr. Richardson is back. Sunday he withdrew from his nomination to the cabinet post, citing a federal investigation into whether his administration steered a financial-advisory contract to a corporation that had donated to the governor's political committees. Mr. Richardson says he has done nothing wrong and expects to be cleared in the federal probe of CDR Financial Products.
But even some of the governor's legislative allies say he has lost face and clout, and can expect a bristly welcome.
"We're all surprised -- here he is again," said state Sen. Dede Feldman, a Democrat. "He has had his problems with the state senate in the past, and I don't think that will improve."
Mr. Richardson, who declined requests for an interview, has made his mark on New Mexico by spending money -- to improve roads, for example, and to build Spaceport America, meant to encourage tourist travel to the edge of space. With the legislature's assent, he offered financial incentives to woo businesses and movie productions to the state.
Now, his most urgent task will be cutting spending -- which will inevitably involve paring some of his pet programs, several legislators said. "It's not going to be a fun year for him," said political analyst and blogger Heath Haussamen.
Mr. Richardson has always been an aggressive, call-the-shots governor, and those close to him said they expect him to continue in that vein. But his stumble on the national stage could cost him politically.
"It's the wounded animal syndrome -- predators may sense blood and circle him, nipping at his flanks," said state Sen. Gerald Ortiz y Pino, a Democrat.
More broadly, New Mexico is left without much heft in Washington. The state's six-term senator, Republican Pete Domenici, long a powerhouse on the budget committee, has retired. And all three of its House seats are occupied by freshmen.
Advocates for New Mexico say their struggling state needs as much help as possible from President-elect Barack Obama's stimulus plan -- but they now fear being cut out for lack of clout. "We're all definitely wondering what this means for New Mexico over the next couple years," said Gabriel Sanchez, a political scientist at the University of New Mexico.
The withdrawal of Mr. Richardson, a Mexican-American, also has deeply disappointed many Latinos. Even among a growing group of politically prominent Hispanics, Mr. Richardson stood out for his charisma, ambition and swashbuckling style on an international stage.
"A lot of our community sees their hopes and dreams reflected in what Bill Richardson has been able to do," said Janet Murguía, president of the National Council of La Raza, a Hispanic advocacy group. "We hold him out as a role model for our young people."
Two Latinos remain among Mr. Obama's cabinet picks: Sen. Ken Salazar as interior secretary and Rep. Hilda Solis as labor secretary. Other Latinos likely to be influential in national politics over the next few years include New Jersey Sen. Robert Menendez; New York Rep. Nydia M. Velázquez; Miami mayor Manuel Diaz; and the Rev. Samuel Rodriguez, president of the National Hispanic Christian Leadership Conference.
People close to Mr. Richardson say he hopes to get a second chance to join the Obama administration. The question is whether any national comeback would be dramatic enough to restore Mr. Richardson's political reputation.
Meanwhile, scrutiny of Mr. Richardson's administration and associates intensified Wednesday.
William C. Sisneros, chief executive of the New Mexico Finance Authority, said in an interview that he had received calls from a senior member of the governor's staff, asking him to talk to firms including CDR; a woman who worked for a longtime adviser to the governor also called repeatedly to set up a meeting with CDR.
Neither effort prompted him to hire the firm, which was already doing business with the authority, Mr. Sisneros said. CDR made $1.48 million for its work, he said, which netted the authority $8.2 million.
Write to Stephanie Simon at stephanie.simon@wsj.com
JANUARY 7, 2009, 10:42 P.M. ET
By STEPHANIE SIMON
SANTA FE, N.M. -- Gov. Bill Richardson is returning to work in a weakened political state.
The New Mexico governor's withdrawal as nominee for commerce secretary could embolden his opponents -- not just Republicans, but also conservative Democrats intent on reining in state spending. And his return comes as New Mexico had already lost much of its voice in Washington.
Just a few months ago, New Mexico was riding high, enjoying national stature as a battleground in the presidential race and reaping a windfall in revenue from energy-production taxes. But the state treasury has taken an enormous hit from the collapse of energy prices. This year's $6 billion budget quickly developed a shortfall of nearly $500 million.
Lawmakers had planned to deal with the crisis by working with Lt. Gov. Diane Denish, who was set to take over the state's top job as soon as Mr. Richardson was confirmed as commerce secretary. Now, abruptly, Mr. Richardson is back. Sunday he withdrew from his nomination to the cabinet post, citing a federal investigation into whether his administration steered a financial-advisory contract to a corporation that had donated to the governor's political committees. Mr. Richardson says he has done nothing wrong and expects to be cleared in the federal probe of CDR Financial Products.
But even some of the governor's legislative allies say he has lost face and clout, and can expect a bristly welcome.
"We're all surprised -- here he is again," said state Sen. Dede Feldman, a Democrat. "He has had his problems with the state senate in the past, and I don't think that will improve."
Mr. Richardson, who declined requests for an interview, has made his mark on New Mexico by spending money -- to improve roads, for example, and to build Spaceport America, meant to encourage tourist travel to the edge of space. With the legislature's assent, he offered financial incentives to woo businesses and movie productions to the state.
Now, his most urgent task will be cutting spending -- which will inevitably involve paring some of his pet programs, several legislators said. "It's not going to be a fun year for him," said political analyst and blogger Heath Haussamen.
Mr. Richardson has always been an aggressive, call-the-shots governor, and those close to him said they expect him to continue in that vein. But his stumble on the national stage could cost him politically.
"It's the wounded animal syndrome -- predators may sense blood and circle him, nipping at his flanks," said state Sen. Gerald Ortiz y Pino, a Democrat.
More broadly, New Mexico is left without much heft in Washington. The state's six-term senator, Republican Pete Domenici, long a powerhouse on the budget committee, has retired. And all three of its House seats are occupied by freshmen.
Advocates for New Mexico say their struggling state needs as much help as possible from President-elect Barack Obama's stimulus plan -- but they now fear being cut out for lack of clout. "We're all definitely wondering what this means for New Mexico over the next couple years," said Gabriel Sanchez, a political scientist at the University of New Mexico.
The withdrawal of Mr. Richardson, a Mexican-American, also has deeply disappointed many Latinos. Even among a growing group of politically prominent Hispanics, Mr. Richardson stood out for his charisma, ambition and swashbuckling style on an international stage.
"A lot of our community sees their hopes and dreams reflected in what Bill Richardson has been able to do," said Janet Murguía, president of the National Council of La Raza, a Hispanic advocacy group. "We hold him out as a role model for our young people."
Two Latinos remain among Mr. Obama's cabinet picks: Sen. Ken Salazar as interior secretary and Rep. Hilda Solis as labor secretary. Other Latinos likely to be influential in national politics over the next few years include New Jersey Sen. Robert Menendez; New York Rep. Nydia M. Velázquez; Miami mayor Manuel Diaz; and the Rev. Samuel Rodriguez, president of the National Hispanic Christian Leadership Conference.
People close to Mr. Richardson say he hopes to get a second chance to join the Obama administration. The question is whether any national comeback would be dramatic enough to restore Mr. Richardson's political reputation.
Meanwhile, scrutiny of Mr. Richardson's administration and associates intensified Wednesday.
William C. Sisneros, chief executive of the New Mexico Finance Authority, said in an interview that he had received calls from a senior member of the governor's staff, asking him to talk to firms including CDR; a woman who worked for a longtime adviser to the governor also called repeatedly to set up a meeting with CDR.
Neither effort prompted him to hire the firm, which was already doing business with the authority, Mr. Sisneros said. CDR made $1.48 million for its work, he said, which netted the authority $8.2 million.
Write to Stephanie Simon at stephanie.simon@wsj.com
Wednesday, January 7, 2009
Richardson Bows Out
http://online.wsj.com/article/SB123129988918059963.html
By JOHN FUND
Warning signs that New Mexico Governor Bill Richardson would have trouble in his confirmation hearings to become Barack Obama's Commerce Secretary had been multiplying for weeks. It doesn't surprise seasoned New Mexico political observers that the two-term governor withdrew from his chance to join Mr. Obama's cabinet this week.
Mr. Richardson was caught up in what has become a major grand jury investigation into possible connections between the state's awarding of a lucrative contract and sizeable contributions a California company made to political action committees created by Gov. Richardson. While the governor himself has not been publicly implicated so far, many of his political employees have given testimony to the grand jury.
Aides to President-elect Obama are already blaming Gov. Richardson for the mess, saying that when his staff was asked for information on the grand jury probe "nothing" was forthcoming. But that's exactly the kind of answer a team of vetters for a future president isn't supposed to accept.
The problems with Mr. Richardson should have been evident to anyone with experience in machine-run Chicago. "Corruption is a way of life in New Mexico," says local blogger and novelist S.J. Reidhead, who maintains that the state's Democratic Party has been controlled by a corrupt machine for many decades. Perhaps it takes someone like Mr. Obama's Chicago pals to imagine Mr. Richardson's tainted backyard wasn't worthy of asking blunt questions about.
Another sign Mr. Richardson was in trouble came only a few days after he was appointed Commerce Secretary last month. On December 16, he abruptly ended a news conference by refusing to answer questions about the grand-jury probe of his office. Trip Jennings of the New Mexican Independent reported that Mr. Richardson's "abrupt departure was out of character for a governor who usually lingers at the end of news conferences to shake hands and mingle with individuals in the room. But on Tuesday he never made eye contact with the reporters."
Mr. Richardson's departure leaves Mr. Obama with a political dilemma, as Hispanic groups are already demanding that the Commerce Department vacancy be filled with another prominent Latino. Mr. Obama may feel he has checked off that diversity box with his appointment of California Rep. Hilda Solis as Labor Secretary. But he will face intense political pressure to make sure the Commerce Secretary post is held by an Hispanic too, especially since George W. Bush has had former Kellogg CEO Carlos Gutierrez in the job for the last four years.
By JOHN FUND
Warning signs that New Mexico Governor Bill Richardson would have trouble in his confirmation hearings to become Barack Obama's Commerce Secretary had been multiplying for weeks. It doesn't surprise seasoned New Mexico political observers that the two-term governor withdrew from his chance to join Mr. Obama's cabinet this week.
Mr. Richardson was caught up in what has become a major grand jury investigation into possible connections between the state's awarding of a lucrative contract and sizeable contributions a California company made to political action committees created by Gov. Richardson. While the governor himself has not been publicly implicated so far, many of his political employees have given testimony to the grand jury.
Aides to President-elect Obama are already blaming Gov. Richardson for the mess, saying that when his staff was asked for information on the grand jury probe "nothing" was forthcoming. But that's exactly the kind of answer a team of vetters for a future president isn't supposed to accept.
The problems with Mr. Richardson should have been evident to anyone with experience in machine-run Chicago. "Corruption is a way of life in New Mexico," says local blogger and novelist S.J. Reidhead, who maintains that the state's Democratic Party has been controlled by a corrupt machine for many decades. Perhaps it takes someone like Mr. Obama's Chicago pals to imagine Mr. Richardson's tainted backyard wasn't worthy of asking blunt questions about.
Another sign Mr. Richardson was in trouble came only a few days after he was appointed Commerce Secretary last month. On December 16, he abruptly ended a news conference by refusing to answer questions about the grand-jury probe of his office. Trip Jennings of the New Mexican Independent reported that Mr. Richardson's "abrupt departure was out of character for a governor who usually lingers at the end of news conferences to shake hands and mingle with individuals in the room. But on Tuesday he never made eye contact with the reporters."
Mr. Richardson's departure leaves Mr. Obama with a political dilemma, as Hispanic groups are already demanding that the Commerce Department vacancy be filled with another prominent Latino. Mr. Obama may feel he has checked off that diversity box with his appointment of California Rep. Hilda Solis as Labor Secretary. But he will face intense political pressure to make sure the Commerce Secretary post is held by an Hispanic too, especially since George W. Bush has had former Kellogg CEO Carlos Gutierrez in the job for the last four years.
CDR Financial Products
http://online.wsj.com/article/SB123129065062659481.html
By SARAH MCBRIDE and LESLIE EATON
The financial company under federal investigation in the sale of state-issued bonds in New Mexico has a history of making campaign contributions in the states and localities where it has worked in a largely unregulated corner of municipal finance.
Federal authorities are investigating whether CDR Financial Products contributed to two political-action committees belonging to New Mexico Gov. Bill Richardson in exchange for more than $1.5 million in work advising the state's bond operations.
Mr. Richardson has denied any wrongdoing but withdrew his name Sunday from consideration for commerce secretary in the Obama administration, citing the investigation. A CDR spokesman, Allan Ripp, said the firm hasn't engaged in any illegal pay-to-play practices and "has steadfastly cooperated with any government inquiry."
Much of CDR's business involves helping cities and states invest the funds raised by the sale of government bonds slated for such projects as housing and transportation. Because municipal bonds are considered safe and are usually tax-exempt, investors accept lower interest rates. Complex federal regulations are supposed to prevent governments from reaping windfall profits by investing that low-cost money in higher-yielding securities. But for decades, Wall Street has come up with ways to get around those rules or to turn them to its own profit.
CDR has built an extensive business profiting from local bonds, but it hasn't always been smooth sailing. In 2007, the Securities and Exchange Commission settled a civil case against the firm involving three Florida bond issues going back to 1999. The commission contended the firm had a secret deal to collect fees on bond proceeds that had been invested and not yet spent for housing or health care. CDR didn't admit wrongdoing, but agreed to a cease-and-desist order prohibiting it from violating antifraud provisions of the securities laws.
"Some of the regulations are quite confusing, but Mr. Rubin has always tried to abide by the law," said Dick Beckler, a lawyer for David Rubin, CDR's principal.
The Justice Department has investigated the municipal-bond market over the years to determine whether financial firms won jobs in exchange for political donations or other favors. In 1995, the Municipal Securities Rulemaking Board cracked down on bankers by restricting certain employees of broker-dealers from making political contributions. But such firms as CDR aren't subject to the same restrictions because they don't directly underwrite deals, acting only as unregulated advisers.
Since 1995, Mr. Rubin has donated more than $212,000 to federal election campaigns across the country, according to Federal Election Commission records. He also frequently has given to races in states where his firm did business, including at least $67,500 to campaigns in Pennsylvania and $35,000 to races in California since 2001.
Mr. Rubin's donations were "not to be pay for play, but to be active in the political process," said CDR's Mr. Ripp.
Among the donations Mr. Rubin's company made to Mr. Richardson's political-action committees was a $75,000 contribution in June 2004 to Si Se Puede Boston 04. Mr. Richardson formed the committee in February of that year to "undertake activities in relation to participation of the Latino community in the 2004 Democratic National Convention," according to the group's filings with the Internal Revenue Service.
The donation was by far the largest received by the group, and accounted for close to a quarter of the $331,000 that it raised. (The next-largest donations were for $25,000.) The group spent tens of thousands of dollars on hotels and airfare at the convention, according to IRS filings, but also transferred about $90,000 to the Democratic Governors Association, after Mr. Richardson became its chairman in December 2004; such transfers are permitted under campaign-finance rules.
The U.S. attorney for New Mexico, Gregory J. Fouratt, has declined to comment on the investigation, and a spokesman didn't return phone calls Tuesday.
Federal prosecutors have also begun to probe another CDR deal -- a $96 million bond issue sold in 2002 for the University of New Mexico. A university spokeswoman said it was complying with subpoenas it had received for documents, which show CDR was to receive a $56,000 fee for participating in the deal, and had already gotten $10,000. CDR declined to discuss the investigation.
The 47-year-old Mr. Rubin was born in Mexico and founded his firm at the age of 25, originally calling it Chambers, Dunhill & Rubin, but Mr. Rubin invented the other to names to "show that the firm had some mahogany polish to it," said Mr. Ripp.
In early 2003, Mr. Rubin served as an unpaid adviser to then-newly elected Pennsylvania Gov. Edward Rendell, advising him on revenue issues. Between 2001 and 2005, Mr. Rubin donated $40,000 to Mr. Rendell's election committee. CDR's business with the state has included monitoring derivatives and working with its housing agency, said Mr. Ripp.
Mr. Rubin donated $15,000 to Philadelphia Mayor John Street's election campaign from 2000 to 2003, records show. In 2003, Philadelphia hired CDR to advise the city on purchasing derivative contracts to hedge its interest payments.
Shortly before the transaction, Philadelphia Treasurer Corey Kemp attended the Super Bowl using tickets provided by CDR to a Philadelphia bond lawyer. Mr. Kemp in 2005 was found guilty of fraud by a federal court and sentenced to 10 years in prison for steering bond-underwriting business to certain bankers in exchange for gifts and favors. CDR wasn't named in any charges.
According to a federal affidavit in the case, CDR, with the help of the bond lawyer, solicited bond business from Mr. Kemp. The affidavit says CDR promised to provide more tickets to secure future bond deals.
In another situation, the IRS is conducting audits into whether CDR and French bank Société Générale SA fixed the prices of financial products used for proceeds from bonds issued in places such as Albuquerque, N.M. The IRS has said it believes the companies structured fees in a way that violated arbitrage regulations. Société Générale declined to comment; CDR's Mr. Ripp called the issue "a historic, long-tailed matter."
In 2006, CDR's offices were raided by federal agents, who removed documents and hard drives. CDR says the raid was likely in connection with an IRS audit.
But the IRS audits have led to further problems for CDR. Eighteen lawsuits by city and county governments and agencies were filed against CDR last year. Many of the suits cite IRS auditing in their complaints that prices were fixed on their own municipal bonds.
According to a search of federal court records, 11 of the complaints have since been closed, with some dismissed and others transferred to different courts.
Mr. Ripp notes that the municipal-bond markets froze up last year as the credit crisis grew, leading many clients to complain about "perfect storm conditions that had nothing to do with the terms of the deals that CDR worked on." He also says that CDR appears on the suits as one of multiple defendants, "including some of the biggest and best-known financial institutions in the world."
—Rhonda Rundle, Liz Rappaport and Nicholas Casey contributed to this article.
Write to Sarah McBride at sarah.mcbride@wsj.com and Leslie Eaton at leslie.eaton@wsj.com
By SARAH MCBRIDE and LESLIE EATON
The financial company under federal investigation in the sale of state-issued bonds in New Mexico has a history of making campaign contributions in the states and localities where it has worked in a largely unregulated corner of municipal finance.
Federal authorities are investigating whether CDR Financial Products contributed to two political-action committees belonging to New Mexico Gov. Bill Richardson in exchange for more than $1.5 million in work advising the state's bond operations.
Mr. Richardson has denied any wrongdoing but withdrew his name Sunday from consideration for commerce secretary in the Obama administration, citing the investigation. A CDR spokesman, Allan Ripp, said the firm hasn't engaged in any illegal pay-to-play practices and "has steadfastly cooperated with any government inquiry."
Much of CDR's business involves helping cities and states invest the funds raised by the sale of government bonds slated for such projects as housing and transportation. Because municipal bonds are considered safe and are usually tax-exempt, investors accept lower interest rates. Complex federal regulations are supposed to prevent governments from reaping windfall profits by investing that low-cost money in higher-yielding securities. But for decades, Wall Street has come up with ways to get around those rules or to turn them to its own profit.
CDR has built an extensive business profiting from local bonds, but it hasn't always been smooth sailing. In 2007, the Securities and Exchange Commission settled a civil case against the firm involving three Florida bond issues going back to 1999. The commission contended the firm had a secret deal to collect fees on bond proceeds that had been invested and not yet spent for housing or health care. CDR didn't admit wrongdoing, but agreed to a cease-and-desist order prohibiting it from violating antifraud provisions of the securities laws.
"Some of the regulations are quite confusing, but Mr. Rubin has always tried to abide by the law," said Dick Beckler, a lawyer for David Rubin, CDR's principal.
The Justice Department has investigated the municipal-bond market over the years to determine whether financial firms won jobs in exchange for political donations or other favors. In 1995, the Municipal Securities Rulemaking Board cracked down on bankers by restricting certain employees of broker-dealers from making political contributions. But such firms as CDR aren't subject to the same restrictions because they don't directly underwrite deals, acting only as unregulated advisers.
Since 1995, Mr. Rubin has donated more than $212,000 to federal election campaigns across the country, according to Federal Election Commission records. He also frequently has given to races in states where his firm did business, including at least $67,500 to campaigns in Pennsylvania and $35,000 to races in California since 2001.
Mr. Rubin's donations were "not to be pay for play, but to be active in the political process," said CDR's Mr. Ripp.
Among the donations Mr. Rubin's company made to Mr. Richardson's political-action committees was a $75,000 contribution in June 2004 to Si Se Puede Boston 04. Mr. Richardson formed the committee in February of that year to "undertake activities in relation to participation of the Latino community in the 2004 Democratic National Convention," according to the group's filings with the Internal Revenue Service.
The donation was by far the largest received by the group, and accounted for close to a quarter of the $331,000 that it raised. (The next-largest donations were for $25,000.) The group spent tens of thousands of dollars on hotels and airfare at the convention, according to IRS filings, but also transferred about $90,000 to the Democratic Governors Association, after Mr. Richardson became its chairman in December 2004; such transfers are permitted under campaign-finance rules.
The U.S. attorney for New Mexico, Gregory J. Fouratt, has declined to comment on the investigation, and a spokesman didn't return phone calls Tuesday.
Federal prosecutors have also begun to probe another CDR deal -- a $96 million bond issue sold in 2002 for the University of New Mexico. A university spokeswoman said it was complying with subpoenas it had received for documents, which show CDR was to receive a $56,000 fee for participating in the deal, and had already gotten $10,000. CDR declined to discuss the investigation.
The 47-year-old Mr. Rubin was born in Mexico and founded his firm at the age of 25, originally calling it Chambers, Dunhill & Rubin, but Mr. Rubin invented the other to names to "show that the firm had some mahogany polish to it," said Mr. Ripp.
In early 2003, Mr. Rubin served as an unpaid adviser to then-newly elected Pennsylvania Gov. Edward Rendell, advising him on revenue issues. Between 2001 and 2005, Mr. Rubin donated $40,000 to Mr. Rendell's election committee. CDR's business with the state has included monitoring derivatives and working with its housing agency, said Mr. Ripp.
Mr. Rubin donated $15,000 to Philadelphia Mayor John Street's election campaign from 2000 to 2003, records show. In 2003, Philadelphia hired CDR to advise the city on purchasing derivative contracts to hedge its interest payments.
Shortly before the transaction, Philadelphia Treasurer Corey Kemp attended the Super Bowl using tickets provided by CDR to a Philadelphia bond lawyer. Mr. Kemp in 2005 was found guilty of fraud by a federal court and sentenced to 10 years in prison for steering bond-underwriting business to certain bankers in exchange for gifts and favors. CDR wasn't named in any charges.
According to a federal affidavit in the case, CDR, with the help of the bond lawyer, solicited bond business from Mr. Kemp. The affidavit says CDR promised to provide more tickets to secure future bond deals.
In another situation, the IRS is conducting audits into whether CDR and French bank Société Générale SA fixed the prices of financial products used for proceeds from bonds issued in places such as Albuquerque, N.M. The IRS has said it believes the companies structured fees in a way that violated arbitrage regulations. Société Générale declined to comment; CDR's Mr. Ripp called the issue "a historic, long-tailed matter."
In 2006, CDR's offices were raided by federal agents, who removed documents and hard drives. CDR says the raid was likely in connection with an IRS audit.
But the IRS audits have led to further problems for CDR. Eighteen lawsuits by city and county governments and agencies were filed against CDR last year. Many of the suits cite IRS auditing in their complaints that prices were fixed on their own municipal bonds.
According to a search of federal court records, 11 of the complaints have since been closed, with some dismissed and others transferred to different courts.
Mr. Ripp notes that the municipal-bond markets froze up last year as the credit crisis grew, leading many clients to complain about "perfect storm conditions that had nothing to do with the terms of the deals that CDR worked on." He also says that CDR appears on the suits as one of multiple defendants, "including some of the biggest and best-known financial institutions in the world."
—Rhonda Rundle, Liz Rappaport and Nicholas Casey contributed to this article.
Write to Sarah McBride at sarah.mcbride@wsj.com and Leslie Eaton at leslie.eaton@wsj.com
Monday, January 5, 2009
Richardson, Obama Teams Trade Blame
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/05/AR2009010503047.html
By Carol D. Leonnig and Michael D. Shear
Washington Post Staff Writers
Tuesday, January 6, 2009; Page A01
Weeks before President-elect Barack Obama chose New Mexico Gov. Bill Richardson to head the Commerce Department, a small group of volunteers with ethics, tax and investigative expertise -- most of them lawyers -- scoured his background looking for embarrassing facts or political problems.
But the team underestimated a potential time bomb -- a grand jury investigation that had been focusing on Richardson's gubernatorial office. The investigation had been widely reported, but Richardson seemed convinced that the probe, which involved a campaign donor, was not likely to thwart his Senate confirmation.
Yesterday, however, Richardson abruptly withdrew from consideration. In the preceding weeks, the extent to which he had underestimated the seriousness of the FBI investigation became obvious both to Obama's vetting team and to Richardson's own staff.
Sources within the transition and the Justice Department said that Richardson had played down the importance of the probe and did not reveal that his office and staff could be at risk. The seriousness of the matter became apparent after the FBI began its own background check on Dec. 2. But Richardson's longtime aides defended his disclosures, noting that subjects under examination by a grand jury are rarely aware of its secret deliberations.
"This was out there, and he told them," said a senior Richardson aide, speaking on the condition of anonymity because of the ongoing investigation. "I feel that they just missed the boat on it. The FBI or the campaign or something. I don't think it's fair that this is being portrayed as him holding anything back."
Yesterday, Richardson hired a prominent white-collar lawyer to represent him in the investigation, which centers on a California financial services firm that won a lucrative contract from the New Mexico Finance Authority after donating to political committees linked to the governor.
In a brief news conference yesterday in Santa Fe, the governor declined to comment on the ongoing probe.
"As you might expect, I'm disappointed in the turn of events," Richardson said. "There were a lot of ways in which I thought I could help this country in a time of financial crisis. Sometimes your own dreams and plans must take a back seat to what is best for the nation."
A Richardson aide said the governor did "nothing wrong" and noted that New Mexico news outlets had reported on the federal grand jury probe starting in August, when officials at the Finance Authority were first interviewed by the FBI about the agency's selection of CDR Financial and its president, David Rubin, a Richardson donor.
But a source with the Obama transition said Richardson's disclosures to the team were incomplete.
A Justice Department source also said Richardson neglected to mention the ongoing investigation on a background-check questionnaire.
FBI agents assigned to comb his background learned independently that an inquiry was underway in New Mexico, the source said. Staff members in the deputy attorney general's office relayed the existence of a "significant" probe -- but no details of the investigation -- to senior members of the transition team.
Justice Department spokeswoman Laura Sweeney declined to comment yesterday on the probe, or on any conversations that may have occurred between the department and the transition team.
Obama's aides also declined to comment yesterday. Obama press secretary Robert Gibbs defended the process, saying: "The totality of our Cabinet picks, it's impressive, and I think our vetters have done a good job."
In New Mexico, the probe of CDR Financial evolved from a larger, nationwide investigation into allegations that investment firms were giving bribes and gifts to local officials to win lucrative work advising local governments on bonds.
The FBI became interested in the New Mexico finance agency, legal sources said, because CDR and its founder had donated $100,000 to two political action committees headed by the governor. The donations, in 2003 and 2004, were made near the time that the authority awarded two contracts to CDR.
In bidding for the first contract, state records show, CDR was not ranked as the most qualified firm to do the work. But the staff for the authority recommended splitting the work and awarding CDR a portion of it. The authority's executive director at the time of that recommendation was David Harris, the governor's former deputy chief of staff, who had gotten the job with Richardson's help.
Steve Flance, board chairman of the Finance Authority, said yesterday that he was interviewed by the FBI in August along with other board members, and that his office has provided numerous boxes of transactions to help federal investigators. He said he does not think the probe will find any wrongdoing by the governor or by state officials.
"I realize the FBI may have other information I am not aware of," Flance said. "But I believe in the end that it will be determined there has been no criminal activity by anyone in the state."
The investigation into CDR was not limited to New Mexico. Authorities have investigated the firm's actions and gifts to public officials in Charlotte; Philadelphia; Jefferson County, Ala.; and Florida.
CDR attorney Richard Beckler said the company has not been charged in any of these cases and has worked to cooperate with government investigations. He said the company has also helped local governments make millions of dollars in investments.
"CDR has always abided by the law and complied with these rules," he said. "There's no direct pay-to-play quid pro quo in any of this."
Pendleton James, who led the vetting process for President Ronald Reagan's nominees, called the situation "astounding." "Come on, they just found this out yesterday?" he asked. "If this was some misdemeanor, I could understand, but . . . a grand jury investigation anywhere near a sitting governor?"
By Carol D. Leonnig and Michael D. Shear
Washington Post Staff Writers
Tuesday, January 6, 2009; Page A01
Weeks before President-elect Barack Obama chose New Mexico Gov. Bill Richardson to head the Commerce Department, a small group of volunteers with ethics, tax and investigative expertise -- most of them lawyers -- scoured his background looking for embarrassing facts or political problems.
But the team underestimated a potential time bomb -- a grand jury investigation that had been focusing on Richardson's gubernatorial office. The investigation had been widely reported, but Richardson seemed convinced that the probe, which involved a campaign donor, was not likely to thwart his Senate confirmation.
Yesterday, however, Richardson abruptly withdrew from consideration. In the preceding weeks, the extent to which he had underestimated the seriousness of the FBI investigation became obvious both to Obama's vetting team and to Richardson's own staff.
Sources within the transition and the Justice Department said that Richardson had played down the importance of the probe and did not reveal that his office and staff could be at risk. The seriousness of the matter became apparent after the FBI began its own background check on Dec. 2. But Richardson's longtime aides defended his disclosures, noting that subjects under examination by a grand jury are rarely aware of its secret deliberations.
"This was out there, and he told them," said a senior Richardson aide, speaking on the condition of anonymity because of the ongoing investigation. "I feel that they just missed the boat on it. The FBI or the campaign or something. I don't think it's fair that this is being portrayed as him holding anything back."
Yesterday, Richardson hired a prominent white-collar lawyer to represent him in the investigation, which centers on a California financial services firm that won a lucrative contract from the New Mexico Finance Authority after donating to political committees linked to the governor.
In a brief news conference yesterday in Santa Fe, the governor declined to comment on the ongoing probe.
"As you might expect, I'm disappointed in the turn of events," Richardson said. "There were a lot of ways in which I thought I could help this country in a time of financial crisis. Sometimes your own dreams and plans must take a back seat to what is best for the nation."
A Richardson aide said the governor did "nothing wrong" and noted that New Mexico news outlets had reported on the federal grand jury probe starting in August, when officials at the Finance Authority were first interviewed by the FBI about the agency's selection of CDR Financial and its president, David Rubin, a Richardson donor.
But a source with the Obama transition said Richardson's disclosures to the team were incomplete.
A Justice Department source also said Richardson neglected to mention the ongoing investigation on a background-check questionnaire.
FBI agents assigned to comb his background learned independently that an inquiry was underway in New Mexico, the source said. Staff members in the deputy attorney general's office relayed the existence of a "significant" probe -- but no details of the investigation -- to senior members of the transition team.
Justice Department spokeswoman Laura Sweeney declined to comment yesterday on the probe, or on any conversations that may have occurred between the department and the transition team.
Obama's aides also declined to comment yesterday. Obama press secretary Robert Gibbs defended the process, saying: "The totality of our Cabinet picks, it's impressive, and I think our vetters have done a good job."
In New Mexico, the probe of CDR Financial evolved from a larger, nationwide investigation into allegations that investment firms were giving bribes and gifts to local officials to win lucrative work advising local governments on bonds.
The FBI became interested in the New Mexico finance agency, legal sources said, because CDR and its founder had donated $100,000 to two political action committees headed by the governor. The donations, in 2003 and 2004, were made near the time that the authority awarded two contracts to CDR.
In bidding for the first contract, state records show, CDR was not ranked as the most qualified firm to do the work. But the staff for the authority recommended splitting the work and awarding CDR a portion of it. The authority's executive director at the time of that recommendation was David Harris, the governor's former deputy chief of staff, who had gotten the job with Richardson's help.
Steve Flance, board chairman of the Finance Authority, said yesterday that he was interviewed by the FBI in August along with other board members, and that his office has provided numerous boxes of transactions to help federal investigators. He said he does not think the probe will find any wrongdoing by the governor or by state officials.
"I realize the FBI may have other information I am not aware of," Flance said. "But I believe in the end that it will be determined there has been no criminal activity by anyone in the state."
The investigation into CDR was not limited to New Mexico. Authorities have investigated the firm's actions and gifts to public officials in Charlotte; Philadelphia; Jefferson County, Ala.; and Florida.
CDR attorney Richard Beckler said the company has not been charged in any of these cases and has worked to cooperate with government investigations. He said the company has also helped local governments make millions of dollars in investments.
"CDR has always abided by the law and complied with these rules," he said. "There's no direct pay-to-play quid pro quo in any of this."
Pendleton James, who led the vetting process for President Ronald Reagan's nominees, called the situation "astounding." "Come on, they just found this out yesterday?" he asked. "If this was some misdemeanor, I could understand, but . . . a grand jury investigation anywhere near a sitting governor?"
Bill Richardson withdraws as Commerce pick
Here is a blog on the Wall Street Journal, entitled, "Is an Indictment in the Offing for Bill Richardson?"
http://blogs.wsj.com/law/2009/01/05/is-an-indictment-in-the-offing-for-bill-richardson/
http://www.latimes.com/news/nationworld/nation/la-na-richardson-cabinet5-2009jan05,0,5449942.story
By Mike Dorning
January 5, 2009
Reporting from Washington -- President-elect Barack Obama was dealt a setback to his incoming Cabinet on Sunday when Commerce Secretary-designate and New Mexico Gov. Bill Richardson withdrew from consideration amid a federal investigation into how a political donor from Beverly Hills won a lucrative state contract.
Richardson, a former presidential candidate who was secretary of Energy and U.N. ambassador in the Clinton administration, said in a statement that he was withdrawing because "a pending investigation" would have "forced an untenable delay in the confirmation process." He said the investigation "promises to extend for several weeks or, perhaps, even months."
Obama, en route to Washington for pre-inaugural meetings, said in a statement that he accepted Richardson's withdrawal "with deep regret."
"It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the Cabinet in order to avoid any delay in filling this important economic post at this critical time," Obama said.
A federal grand jury in Albuquerque is looking into whether CDR Financial Products in Beverly Hills received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees.
The state contract came about a few months before CDR and its president, David Rubin, contributed more than $100,000 to two Richardson political committees, campaign finance records show.
CDR Financial Products acts as an investment middleman by helping government and nonprofit entities broker competitive bids from banks, insurance companies and others. It helped put together a complex bond financing deal for a $1.6-billion highway and transportation construction program for the New Mexico authority. The company collected $1.5 million in fees, state officials confirmed.
The federal probe heated up considerably last month, around the time Obama announced Richardson as his choice for secretary of Commerce, according to sources familiar with the investigation. New subpoenas were issued and testimony was scheduled from officials at J.P. Morgan Chase & Co., who worked for the state with CDR, and the director of Richardson's political action committees.
CDR's selection drew FBI interest because the firm was not included on an initial list of the most qualified bidders. The bidding was later reopened for review, and a state committee headed by one of Richardson's former top aides helped select CDR.
The inquiry is part of a national investigation of "pay-to-play" practices in the municipal bond market, in which financial companies make political donations to officeholders in order to be considered for public business.
Richardson said Sunday that he had "acted properly in all matters and that this investigation will bear out that fact." He intends to remain governor of New Mexico.
CDR spokesman Allan Ripp also denied that his company had done anything wrong.
"CDR stands by the work it performed for the New Mexico Finance Authority as well as the propriety of the selection process by which the firm was chosen to serve as the state's swaps and investment advisor in 2004," Ripp said.
James Pfiffner, a public policy professor at George Mason University in Fairfax, Va., and author of a book on presidential transitions, said the withdrawal suggested flaws in Obama's screening process.
"It shows that they didn't quite do enough vetting, and something came up that they didn't quite foresee," Pfiffner said.
Obama spokesman Robert Gibbs defended the incoming administration's screening of its Cabinet choices. "The totality of our picks, it's impressive, and I think our vetters have done a good job," said Gibbs, speaking to reporters traveling with Obama on a flight from Chicago to Washington.
With Richardson's withdrawal, Obama's administration loses its most prominent Latino member, a national figure who endorsed the Illinois senator over Sen. Hillary Rodham Clinton in the Democratic primaries and campaigned for him in the general election.
The federal investigation into Richardson's relationship with CDR Financial Products has been public knowledge since August, when it was reported by the Albuquerque Journal.
The Associated Press reported in 2004 that a political committee established by Richardson to pay costs for himself and his staff at that year's Democratic National Convention received more than two-thirds of its contributions from companies doing bond business with the state.
The largest donor to the group, with a $75,000 contribution, was CDR Financial Products. Other state contractors gave at least $55,000.
Sensitivity to allegations of "pay-to-play" politics has grown since the arrest last month of Illinois Gov. Rod R. Blagojevich, accused of trying to use his power to fill Obama's vacant Senate seat to extort money or jobs from interested candidates.
Neither Obama nor his advisors have been implicated in Blagojevich's alleged scheme, but the scandal has been a political distraction.
The reason for the timing of Richardson's withdrawal was unclear. A transition official who declined to be identified said Richardson informed Obama on Friday that he wished to withdraw after the governor concluded that the investigation would last at least another six to eight weeks.
Each of the last three presidents has withdrawn at least one Cabinet nominee amid controversy.
George H.W. Bush's nomination of John Tower as Defense secretary in 1989 ran into trouble amid accusations of Tower's excessive drinking and womanizing. Bill Clinton's nomination of Zoe Baird as attorney general in 1993 was derailed by revelations that she had hired illegal immigrants for household help, as was George W. Bush's nomination of Linda Chavez as Labor secretary.
Contentious hearings on the Tower nomination marred the early days of the elder Bush's presidency, and controversy over Baird was a distraction during Clinton's inauguration. But Chavez withdrew 11 days before the younger Bush took office, and he suffered little political damage.
Pfiffner said Richardson's decision to withdraw well before inauguration would likely limit the political impact. "It's much less damaging to have this happen now than after Jan. 20," he said.
Times staff writer Dawn Chmielewski in Los Angeles contributed to this report.
mdorning@tribune.com
http://blogs.wsj.com/law/2009/01/05/is-an-indictment-in-the-offing-for-bill-richardson/
“There is no indication that the grand jury has anything or is going anywhere with this,” the source said. However, a new grand jury is expected to be empaneled soon, and “we don’t know what to expect from them,” he added.
http://www.latimes.com/news/nationworld/nation/la-na-richardson-cabinet5-2009jan05,0,5449942.story
By Mike Dorning
January 5, 2009
Reporting from Washington -- President-elect Barack Obama was dealt a setback to his incoming Cabinet on Sunday when Commerce Secretary-designate and New Mexico Gov. Bill Richardson withdrew from consideration amid a federal investigation into how a political donor from Beverly Hills won a lucrative state contract.
Richardson, a former presidential candidate who was secretary of Energy and U.N. ambassador in the Clinton administration, said in a statement that he was withdrawing because "a pending investigation" would have "forced an untenable delay in the confirmation process." He said the investigation "promises to extend for several weeks or, perhaps, even months."
Obama, en route to Washington for pre-inaugural meetings, said in a statement that he accepted Richardson's withdrawal "with deep regret."
"It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the Cabinet in order to avoid any delay in filling this important economic post at this critical time," Obama said.
A federal grand jury in Albuquerque is looking into whether CDR Financial Products in Beverly Hills received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees.
The state contract came about a few months before CDR and its president, David Rubin, contributed more than $100,000 to two Richardson political committees, campaign finance records show.
CDR Financial Products acts as an investment middleman by helping government and nonprofit entities broker competitive bids from banks, insurance companies and others. It helped put together a complex bond financing deal for a $1.6-billion highway and transportation construction program for the New Mexico authority. The company collected $1.5 million in fees, state officials confirmed.
The federal probe heated up considerably last month, around the time Obama announced Richardson as his choice for secretary of Commerce, according to sources familiar with the investigation. New subpoenas were issued and testimony was scheduled from officials at J.P. Morgan Chase & Co., who worked for the state with CDR, and the director of Richardson's political action committees.
CDR's selection drew FBI interest because the firm was not included on an initial list of the most qualified bidders. The bidding was later reopened for review, and a state committee headed by one of Richardson's former top aides helped select CDR.
The inquiry is part of a national investigation of "pay-to-play" practices in the municipal bond market, in which financial companies make political donations to officeholders in order to be considered for public business.
Richardson said Sunday that he had "acted properly in all matters and that this investigation will bear out that fact." He intends to remain governor of New Mexico.
CDR spokesman Allan Ripp also denied that his company had done anything wrong.
"CDR stands by the work it performed for the New Mexico Finance Authority as well as the propriety of the selection process by which the firm was chosen to serve as the state's swaps and investment advisor in 2004," Ripp said.
James Pfiffner, a public policy professor at George Mason University in Fairfax, Va., and author of a book on presidential transitions, said the withdrawal suggested flaws in Obama's screening process.
"It shows that they didn't quite do enough vetting, and something came up that they didn't quite foresee," Pfiffner said.
Obama spokesman Robert Gibbs defended the incoming administration's screening of its Cabinet choices. "The totality of our picks, it's impressive, and I think our vetters have done a good job," said Gibbs, speaking to reporters traveling with Obama on a flight from Chicago to Washington.
With Richardson's withdrawal, Obama's administration loses its most prominent Latino member, a national figure who endorsed the Illinois senator over Sen. Hillary Rodham Clinton in the Democratic primaries and campaigned for him in the general election.
The federal investigation into Richardson's relationship with CDR Financial Products has been public knowledge since August, when it was reported by the Albuquerque Journal.
The Associated Press reported in 2004 that a political committee established by Richardson to pay costs for himself and his staff at that year's Democratic National Convention received more than two-thirds of its contributions from companies doing bond business with the state.
The largest donor to the group, with a $75,000 contribution, was CDR Financial Products. Other state contractors gave at least $55,000.
Sensitivity to allegations of "pay-to-play" politics has grown since the arrest last month of Illinois Gov. Rod R. Blagojevich, accused of trying to use his power to fill Obama's vacant Senate seat to extort money or jobs from interested candidates.
Neither Obama nor his advisors have been implicated in Blagojevich's alleged scheme, but the scandal has been a political distraction.
The reason for the timing of Richardson's withdrawal was unclear. A transition official who declined to be identified said Richardson informed Obama on Friday that he wished to withdraw after the governor concluded that the investigation would last at least another six to eight weeks.
Each of the last three presidents has withdrawn at least one Cabinet nominee amid controversy.
George H.W. Bush's nomination of John Tower as Defense secretary in 1989 ran into trouble amid accusations of Tower's excessive drinking and womanizing. Bill Clinton's nomination of Zoe Baird as attorney general in 1993 was derailed by revelations that she had hired illegal immigrants for household help, as was George W. Bush's nomination of Linda Chavez as Labor secretary.
Contentious hearings on the Tower nomination marred the early days of the elder Bush's presidency, and controversy over Baird was a distraction during Clinton's inauguration. But Chavez withdrew 11 days before the younger Bush took office, and he suffered little political damage.
Pfiffner said Richardson's decision to withdraw well before inauguration would likely limit the political impact. "It's much less damaging to have this happen now than after Jan. 20," he said.
Times staff writer Dawn Chmielewski in Los Angeles contributed to this report.
mdorning@tribune.com
Richardson Won’t Pursue Cabinet Post
http://www.nytimes.com/2009/01/05/us/politics/05richardson.html
WASHINGTON — Gov. Bill Richardson of New Mexico, President-elect Barack Obama’s choice for commerce secretary, withdrew from consideration for that job on Sunday, saying a pending investigation into whether his administration gave lucrative contracts to a political donor would have “forced an untenable delay” in his confirmation.
The president-elect and the governor, close friends as well as political allies, announced the withdrawal in joint statements. Mr. Richardson, one of the nation’s best-known Latino politicians, promised to stay on as governor and said his administration had “acted properly in all matters.” But he said he had concluded that the inquiry could last weeks or even months, drawing out his confirmation hearings and distracting the new administration as it grappled with the economic crisis.
Mr. Obama said he accepted “with deep regret” Mr. Richardson’s decision to bow out. People familiar with discussions between the two men said that while the president-elect did not press Mr. Richardson to step aside, neither did Mr. Obama try to talk him out of it.
The announcement, just days before the Senate is to begin confirmation hearings for some of Mr. Obama’s cabinet selections, was a setback for the president-elect, who has assembled his cabinet in near-record time. It raises questions about the thoroughness of Mr. Richardson’s vetting, deprives the Obama administration of a prominent Hispanic — Mr. Obama has, however, named two other Latinos, Representative Hilda L. Solis of California and Senator Ken Salazar of Colorado, to cabinet posts — and leaves a hole in the new White House economics team at a critical juncture.
Obama officials could not say on Sunday how quickly the president-elect would move to fill the job, or who may be on his short list. Mr. Obama is hoping to persuade Congress to pass an ambitious economic stimulus plan that he can sign quickly after taking office, and he is set to meet with his economic advisers on Monday. The commerce secretary would play an integral role in that process, as Mr. Richardson himself noted on Sunday.
“Given the gravity of the economic situation the nation is facing,” the governor said, “I could not in good conscience ask the president-elect to delay for one day the important work that needs to be done.”
The investigation concerns CDR Financial Products Inc., a Beverly Hills, Calif., company that in 2004 was awarded two consulting contracts worth about $1.4 million to advise the State of New Mexico on a large bond issue for building infrastructure, one of Mr. Richardson’s initiatives. The company’s president, David Rubin, a major Democratic contributor, gave about $100,000 to two political action committees controlled by Mr. Richardson, as well as $10,000 to his re-election campaign in 2005, according to published reports.
The F.B.I. began examining the contracts last year; in August, the inquiry was reported in the New Mexico news media. But an Obama transition official, speaking on condition of anonymity, said the president-elect’s team, while aware that one of Mr. Richardson’s donors was being investigated, did not know that the inquiry extended to Mr. Richardson until after Mr. Obama announced the New Mexico governor as his commerce secretary choice in early December.
About two weeks after the announcement, newspapers reported that a federal grand jury was examining accusations that the Richardson administration had awarded the contracts because of the political contributions. Whether the Obama team learned of the grand jury inquiry through news reports, or perhaps from Mr. Richardson himself, was unclear on Sunday. Obama officials would not say.
But Robert Gibbs, the incoming White House press secretary, defended the vetting process. “The totality of our cabinet picks, it’s impressive and I think our vetters have done a good job,” he said.
Sunday’s announcement comes as Mr. Obama was still dealing with the uproar over another inquiry, this one into whether Gov. Rod R. Blagojevich of Illinois had tried to sell Mr. Obama’s Senate seat. But while the president-elect has distanced himself from the Illinois governor, he praised Mr. Richardson on Sunday as “an outstanding public servant” who would have brought “great insights accumulated through an extraordinary career” to the Obama administration.
“It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the cabinet in order to avoid any delay in filling this important economic post at this critical time,” Mr. Obama said.
Mr. Richardson and Mr. Obama spoke Friday, officials familiar with the conversation said, and Mr. Richardson informed the president-elect that he intended to withdraw his name from consideration. The Obama transition team had grown concerned that Mr. Richardson’s confirmation could be delayed because of the federal investigation, which would have kept Mr. Obama’s full economic team from being in place as the new president tried to jump start the economy.
Associates of Mr. Richardson said the governor was convinced that the investigation would clear him, and that ultimately he would be confirmed. But they said the inquiry was taking longer than he thought, and that he decided to drop out on his own.
Mr. Obama did not ask Mr. Richardson to step aside, associates close to both men said. But when Mr. Richardson offered to withdraw, the officials said, Mr. Obama simply accepted, without trying to persuade Mr. Richardson otherwise.
Mr. Richardson, whose mother is Mexican, has long been a fixture of Democratic politics and has deep experience in public life. He is known for his easy sense of humor — during the 2004 Democratic convention, he distributed jars of salsa with his picture on them — and remains popular in his home state. Prior to becoming governor, he served in Congress and in the Clinton administration as energy secretary and ambassador to the United Nations. But after his own bid for the Democratic nomination for president failed last year, he made a public — and by his own account, painful — break with the Clintons to endorse Mr. Obama; in return, some speculated he might be selected for a top-tier cabinet position, like secretary of state.
Instead, Mr. Obama rewarded him with the commerce secretary’s job; at the press conference announcing the appointment, the president-elect dismissed the notion that the post was a “consolation prize,” adding, “I think the notion that somehow commerce secretary is not going to be central to everything we do is fundamentally mistaken.”
Jeff Zeleny and Adam Nagourney contributed reporting.
WASHINGTON — Gov. Bill Richardson of New Mexico, President-elect Barack Obama’s choice for commerce secretary, withdrew from consideration for that job on Sunday, saying a pending investigation into whether his administration gave lucrative contracts to a political donor would have “forced an untenable delay” in his confirmation.
The president-elect and the governor, close friends as well as political allies, announced the withdrawal in joint statements. Mr. Richardson, one of the nation’s best-known Latino politicians, promised to stay on as governor and said his administration had “acted properly in all matters.” But he said he had concluded that the inquiry could last weeks or even months, drawing out his confirmation hearings and distracting the new administration as it grappled with the economic crisis.
Mr. Obama said he accepted “with deep regret” Mr. Richardson’s decision to bow out. People familiar with discussions between the two men said that while the president-elect did not press Mr. Richardson to step aside, neither did Mr. Obama try to talk him out of it.
The announcement, just days before the Senate is to begin confirmation hearings for some of Mr. Obama’s cabinet selections, was a setback for the president-elect, who has assembled his cabinet in near-record time. It raises questions about the thoroughness of Mr. Richardson’s vetting, deprives the Obama administration of a prominent Hispanic — Mr. Obama has, however, named two other Latinos, Representative Hilda L. Solis of California and Senator Ken Salazar of Colorado, to cabinet posts — and leaves a hole in the new White House economics team at a critical juncture.
Obama officials could not say on Sunday how quickly the president-elect would move to fill the job, or who may be on his short list. Mr. Obama is hoping to persuade Congress to pass an ambitious economic stimulus plan that he can sign quickly after taking office, and he is set to meet with his economic advisers on Monday. The commerce secretary would play an integral role in that process, as Mr. Richardson himself noted on Sunday.
“Given the gravity of the economic situation the nation is facing,” the governor said, “I could not in good conscience ask the president-elect to delay for one day the important work that needs to be done.”
The investigation concerns CDR Financial Products Inc., a Beverly Hills, Calif., company that in 2004 was awarded two consulting contracts worth about $1.4 million to advise the State of New Mexico on a large bond issue for building infrastructure, one of Mr. Richardson’s initiatives. The company’s president, David Rubin, a major Democratic contributor, gave about $100,000 to two political action committees controlled by Mr. Richardson, as well as $10,000 to his re-election campaign in 2005, according to published reports.
The F.B.I. began examining the contracts last year; in August, the inquiry was reported in the New Mexico news media. But an Obama transition official, speaking on condition of anonymity, said the president-elect’s team, while aware that one of Mr. Richardson’s donors was being investigated, did not know that the inquiry extended to Mr. Richardson until after Mr. Obama announced the New Mexico governor as his commerce secretary choice in early December.
About two weeks after the announcement, newspapers reported that a federal grand jury was examining accusations that the Richardson administration had awarded the contracts because of the political contributions. Whether the Obama team learned of the grand jury inquiry through news reports, or perhaps from Mr. Richardson himself, was unclear on Sunday. Obama officials would not say.
But Robert Gibbs, the incoming White House press secretary, defended the vetting process. “The totality of our cabinet picks, it’s impressive and I think our vetters have done a good job,” he said.
Sunday’s announcement comes as Mr. Obama was still dealing with the uproar over another inquiry, this one into whether Gov. Rod R. Blagojevich of Illinois had tried to sell Mr. Obama’s Senate seat. But while the president-elect has distanced himself from the Illinois governor, he praised Mr. Richardson on Sunday as “an outstanding public servant” who would have brought “great insights accumulated through an extraordinary career” to the Obama administration.
“It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the cabinet in order to avoid any delay in filling this important economic post at this critical time,” Mr. Obama said.
Mr. Richardson and Mr. Obama spoke Friday, officials familiar with the conversation said, and Mr. Richardson informed the president-elect that he intended to withdraw his name from consideration. The Obama transition team had grown concerned that Mr. Richardson’s confirmation could be delayed because of the federal investigation, which would have kept Mr. Obama’s full economic team from being in place as the new president tried to jump start the economy.
Associates of Mr. Richardson said the governor was convinced that the investigation would clear him, and that ultimately he would be confirmed. But they said the inquiry was taking longer than he thought, and that he decided to drop out on his own.
Mr. Obama did not ask Mr. Richardson to step aside, associates close to both men said. But when Mr. Richardson offered to withdraw, the officials said, Mr. Obama simply accepted, without trying to persuade Mr. Richardson otherwise.
Mr. Richardson, whose mother is Mexican, has long been a fixture of Democratic politics and has deep experience in public life. He is known for his easy sense of humor — during the 2004 Democratic convention, he distributed jars of salsa with his picture on them — and remains popular in his home state. Prior to becoming governor, he served in Congress and in the Clinton administration as energy secretary and ambassador to the United Nations. But after his own bid for the Democratic nomination for president failed last year, he made a public — and by his own account, painful — break with the Clintons to endorse Mr. Obama; in return, some speculated he might be selected for a top-tier cabinet position, like secretary of state.
Instead, Mr. Obama rewarded him with the commerce secretary’s job; at the press conference announcing the appointment, the president-elect dismissed the notion that the post was a “consolation prize,” adding, “I think the notion that somehow commerce secretary is not going to be central to everything we do is fundamentally mistaken.”
Jeff Zeleny and Adam Nagourney contributed reporting.
Richardson's public life imperfect but resilient
http://news.yahoo.com/s/ap/20090105/ap_on_go_ca_st_pe/richardson_profile_5
By BEN FELLER, Associated Press Writer Ben Feller, Associated Press Writer – Mon Jan 5, 5:09 am ET
WASHINGTON – When he ran for president, Bill Richardson touted more than an adventurous style and impressive resume. He was the guy who embraced flaws as a strength, the one who said the American people "don't want blow-dried candidates with perfection."
A federal grand jury investigation into what could be a serious flaw, however, has led New Mexico's governor to a tough decision to leave the national political stage--at least for now.
Richardson on Sunday scrapped his nomination to be Barack Obama's commerce secretary. A federal grand jury is looking into how a California firm that contributed to Richardson's political activities won a lucrative state government contract.
The former U.S. diplomat sounded diplomatic in announcing his decision. He said he has done nothing wrong, but figured a dragged-out confirmation could slow down Obama's work. And so Richardson withdrew, spoke with pride about sticking with his job as governor, and told Obama he's still eager to serve down the line.
"The governor is confident that he will be cleared," said Richardson's spokesman, Gilbert Gallegos.
At 61, Richardson has been described as a blend of East Coast establishment and Western individualism with a dash of Third World acumen. He combines a competitiveness and political savvy with a down-to-earth style that often disarms adversaries, associates say. They are traits that have served him well as a congressman, U.N. ambassador, energy secretary and governor.
"His personality gets him in the door," David Goldwyn, an associate of Richardson's at the United Nations, once said. "From there he's got to deliver the message, he's got to be persuasive, and he's got to secure the objective. That's where the other part of his personality comes in — his relentlessness."
As a seven-term congressman, Richardson showed a knack for freelance diplomacy, rushing off to such places as North Korea, Sudan, Cuba and Iraq on unofficial diplomatic missions. In 1995, he persuaded Iraqi President Saddam Hussein to release two American aerospace workers who had wandered into Iraq from Kuwait. He helped free three Red Cross workers in Sudan and mediated with North Korea over the downing of two U.S. Army helicopter pilots.
Richardson was disappointed when President Bill Clinton passed him over for secretary of state. But in 1996, Clinton named him U.N. ambassador, and two years later, energy secretary. Almost immediately after going to the Energy Department, Richardson was confronted with an uproar over allegations of Chinese spying — later found to be untrue — and of a rash of security lapses at one of the government's premier nuclear weapons labs at Los Alamos National Laboratory in New Mexico. Members of Congress criticized his handling of the matter, though many of the problems predated his arrival at the department.
In 2002, Richardson easily won election as governor of New Mexico, then re-election in 2006.
He continued to maintain a high national profile as chairman of the Democratic National Governors Association and by raising money for congressional candidates in the 2006 elections.
An early contender for the Democratic presidential nomination, Richardson ended his long-shot bid a year ago after finishing poorly in Iowa and New Hampshire.
His endorsement of Obama stunned Hillary Rodham Clinton's campaign. His bilingual, bicultural Hispanic background enabled him to campaign successfully for Obama among fellow Hispanics. But he also lamented during his own presidential bid, however, that because of his surname, many people didn't think he was Hispanic.
When Obama won, Richardson's name was in the hopper as a possible vice president, then as secretary of state. Neither happened.
But eventually Obama picked him for the commerce job, which includes selling America to the international business community.
It was all cheery that day, just over a month ago, when Obama announced Richardson's nomination at a news conference. When a reporter asked the clean-shaven Richardson what had become of his beard, Obama insisted on answering.
"I thought that whole western rugged look was really working for him. ... We're deeply disappointed with the loss of the beard," Obama joked.
By Sunday, the tone had changed markedly. This time, Obama expressed deep regret, and it was real. Richardson had stepped aside.
Putting aside the setback, Obama said: "It is a measure of his willingness to put the nation first."
___
Associated Press writers Deborah Baker, H. Josef Hebert, Nedra Pickler and Pauline Arrillaga contributed to this story.
By BEN FELLER, Associated Press Writer Ben Feller, Associated Press Writer – Mon Jan 5, 5:09 am ET
WASHINGTON – When he ran for president, Bill Richardson touted more than an adventurous style and impressive resume. He was the guy who embraced flaws as a strength, the one who said the American people "don't want blow-dried candidates with perfection."
A federal grand jury investigation into what could be a serious flaw, however, has led New Mexico's governor to a tough decision to leave the national political stage--at least for now.
Richardson on Sunday scrapped his nomination to be Barack Obama's commerce secretary. A federal grand jury is looking into how a California firm that contributed to Richardson's political activities won a lucrative state government contract.
The former U.S. diplomat sounded diplomatic in announcing his decision. He said he has done nothing wrong, but figured a dragged-out confirmation could slow down Obama's work. And so Richardson withdrew, spoke with pride about sticking with his job as governor, and told Obama he's still eager to serve down the line.
"The governor is confident that he will be cleared," said Richardson's spokesman, Gilbert Gallegos.
At 61, Richardson has been described as a blend of East Coast establishment and Western individualism with a dash of Third World acumen. He combines a competitiveness and political savvy with a down-to-earth style that often disarms adversaries, associates say. They are traits that have served him well as a congressman, U.N. ambassador, energy secretary and governor.
"His personality gets him in the door," David Goldwyn, an associate of Richardson's at the United Nations, once said. "From there he's got to deliver the message, he's got to be persuasive, and he's got to secure the objective. That's where the other part of his personality comes in — his relentlessness."
As a seven-term congressman, Richardson showed a knack for freelance diplomacy, rushing off to such places as North Korea, Sudan, Cuba and Iraq on unofficial diplomatic missions. In 1995, he persuaded Iraqi President Saddam Hussein to release two American aerospace workers who had wandered into Iraq from Kuwait. He helped free three Red Cross workers in Sudan and mediated with North Korea over the downing of two U.S. Army helicopter pilots.
Richardson was disappointed when President Bill Clinton passed him over for secretary of state. But in 1996, Clinton named him U.N. ambassador, and two years later, energy secretary. Almost immediately after going to the Energy Department, Richardson was confronted with an uproar over allegations of Chinese spying — later found to be untrue — and of a rash of security lapses at one of the government's premier nuclear weapons labs at Los Alamos National Laboratory in New Mexico. Members of Congress criticized his handling of the matter, though many of the problems predated his arrival at the department.
In 2002, Richardson easily won election as governor of New Mexico, then re-election in 2006.
He continued to maintain a high national profile as chairman of the Democratic National Governors Association and by raising money for congressional candidates in the 2006 elections.
An early contender for the Democratic presidential nomination, Richardson ended his long-shot bid a year ago after finishing poorly in Iowa and New Hampshire.
His endorsement of Obama stunned Hillary Rodham Clinton's campaign. His bilingual, bicultural Hispanic background enabled him to campaign successfully for Obama among fellow Hispanics. But he also lamented during his own presidential bid, however, that because of his surname, many people didn't think he was Hispanic.
When Obama won, Richardson's name was in the hopper as a possible vice president, then as secretary of state. Neither happened.
But eventually Obama picked him for the commerce job, which includes selling America to the international business community.
It was all cheery that day, just over a month ago, when Obama announced Richardson's nomination at a news conference. When a reporter asked the clean-shaven Richardson what had become of his beard, Obama insisted on answering.
"I thought that whole western rugged look was really working for him. ... We're deeply disappointed with the loss of the beard," Obama joked.
By Sunday, the tone had changed markedly. This time, Obama expressed deep regret, and it was real. Richardson had stepped aside.
Putting aside the setback, Obama said: "It is a measure of his willingness to put the nation first."
___
Associated Press writers Deborah Baker, H. Josef Hebert, Nedra Pickler and Pauline Arrillaga contributed to this story.
Sunday, January 4, 2009
Richardson's Lies Have Finally Caught Up to Him
http://www.huffingtonpost.com/geoffrey-dunn/richardsons-lies-have-fin_b_155150.html
Posted January 4, 2009 | 09:05 PM (EST)
Bill Richardson and Barack Obama have always seemed a bit like an odd couple.
When the New Mexico governor stabbed his former patrons Bill and Hillary Clinton in their backs last March by endorsing Obama over Hillary, everyone knew that Richardson was simply making a calculated political wager by throwing his support Obama's way. After serving in the 1990s as both Bill Clinton's Ambassador to the United Nations and later Secretary of Energy, Richardson desperately wanted to be back in the big show.
For his act of betrayal, the "Ragin' Cajun" James Carville dubbed him "Judas Iscariot." Carville has never backed down from the charge.
Today, Richardson's penchant for lying and unsavory associations has finally caught up to him. His withdrawal as Obama's nominee to serve as Commerce Secretary because of an ongoing grand jury investigation into whether he traded New Mexico government contracts for campaign contributions should come as no surprise. Richardson has always been only a step or two ahead of trouble. And there are reports coming out that he wasn't entirely candid with Obama's transition team about the nature of the investigation.
Richardson made national headlines a few years ago when he claimed he had been drafted during his youth by baseball's Kansas City Athletics. He knew better, and Richardson--a mediocre small-college pitcher--finally had to admit he concocted the story. The lie had nothing to do with politics, but it shed a great deal of light on his character.
A more troubling tale took place on the campaign trail last year when Richardson embellished a story about a young American soldier from New Mexico, Lance Cpl. Aaron Austin, who had been killed in Iraq. During his campaign, Richardson often claimed that he had an emotional conversation with Austin's mother, saying she thanked him for the federal death benefits she had received and even showed him the government check.
Only one problem. Mrs. Austin said she never had the conversation with Richardson. It was yet another of his self-serving embellishments.
Richardson has also been caught fudging facts about illegal immigration. He lied about opposing Yucca Mountain as a nuclear waste repository. He's been caught distorting facts about health insurance. Moreover, as Secretary of Energy, he was chastised by members of both parties for the role he played in falsely charging Wen Ho Lee in the nuclear espionage scandal at the Los Alamos National Laboratory. Chinese American activists in California had previously organized against his nomination.
Richardson also played a central role in the Monica Lewinsky scandal, during which time he offered Lewinsky a job at the U.N. in order to get her out of the White House. Evidence suggests that he knew far more about her relationship with Clinton than he let on at the time.
Just this past year, Mother Jones reported on Richardson's unsavory ties to big oil and his peripheral participation in the Peregrine Systems scandal, in which the San Diego company, on whose outside board Richardson served (his wife was also the sister in-law of Pergegrine's CEO), was "engaged in various acts of financial impropriety, including masking the severity of Peregrine's losses with phony accounting."
And he also worked as a lobbyist for Henry Kissinger's DC-based lobbying firm, Kissinger McLarty Associates.
Back in New Mexico, Richardson maintained a close relationship with well-known painter R.C. Gorman, who was suspected of being a pedophile for more than 40 years. An FBI report released after Gorman's death indicated that the agency had uncovered "credible evidence that Gorman participated in child sexual abuse," though the only provable cases had occurred many years prior to the five-year statute of limitations. Richardson, who was aware of the charges, used Gorman's art work "Mystic Mesa" as recently 2002 in his campaign poster. Richardson's own "inappropriate" behavior around women also dogged him on the campaign trail.
In his current imbroglio, Richardson, who says he did nothing "improper," is being investigated in a pay-to-play scheme involving a Beverly Hills firm, CDR Financial Products Inc., which won two consulting contracts in 2004 worth about $1.4 million to advise New Mexico on a large bond issue.
CDR Financial Products has been investigated twice in recent years by federal agents regarding irregularities in the municipal bonds marketing industry--in which government officials have supposedly received under-the-table payments from companies selling municipal bonds.
Posted January 4, 2009 | 09:05 PM (EST)
Bill Richardson and Barack Obama have always seemed a bit like an odd couple.
When the New Mexico governor stabbed his former patrons Bill and Hillary Clinton in their backs last March by endorsing Obama over Hillary, everyone knew that Richardson was simply making a calculated political wager by throwing his support Obama's way. After serving in the 1990s as both Bill Clinton's Ambassador to the United Nations and later Secretary of Energy, Richardson desperately wanted to be back in the big show.
For his act of betrayal, the "Ragin' Cajun" James Carville dubbed him "Judas Iscariot." Carville has never backed down from the charge.
Today, Richardson's penchant for lying and unsavory associations has finally caught up to him. His withdrawal as Obama's nominee to serve as Commerce Secretary because of an ongoing grand jury investigation into whether he traded New Mexico government contracts for campaign contributions should come as no surprise. Richardson has always been only a step or two ahead of trouble. And there are reports coming out that he wasn't entirely candid with Obama's transition team about the nature of the investigation.
Richardson made national headlines a few years ago when he claimed he had been drafted during his youth by baseball's Kansas City Athletics. He knew better, and Richardson--a mediocre small-college pitcher--finally had to admit he concocted the story. The lie had nothing to do with politics, but it shed a great deal of light on his character.
A more troubling tale took place on the campaign trail last year when Richardson embellished a story about a young American soldier from New Mexico, Lance Cpl. Aaron Austin, who had been killed in Iraq. During his campaign, Richardson often claimed that he had an emotional conversation with Austin's mother, saying she thanked him for the federal death benefits she had received and even showed him the government check.
Only one problem. Mrs. Austin said she never had the conversation with Richardson. It was yet another of his self-serving embellishments.
Richardson has also been caught fudging facts about illegal immigration. He lied about opposing Yucca Mountain as a nuclear waste repository. He's been caught distorting facts about health insurance. Moreover, as Secretary of Energy, he was chastised by members of both parties for the role he played in falsely charging Wen Ho Lee in the nuclear espionage scandal at the Los Alamos National Laboratory. Chinese American activists in California had previously organized against his nomination.
Richardson also played a central role in the Monica Lewinsky scandal, during which time he offered Lewinsky a job at the U.N. in order to get her out of the White House. Evidence suggests that he knew far more about her relationship with Clinton than he let on at the time.
Just this past year, Mother Jones reported on Richardson's unsavory ties to big oil and his peripheral participation in the Peregrine Systems scandal, in which the San Diego company, on whose outside board Richardson served (his wife was also the sister in-law of Pergegrine's CEO), was "engaged in various acts of financial impropriety, including masking the severity of Peregrine's losses with phony accounting."
And he also worked as a lobbyist for Henry Kissinger's DC-based lobbying firm, Kissinger McLarty Associates.
Back in New Mexico, Richardson maintained a close relationship with well-known painter R.C. Gorman, who was suspected of being a pedophile for more than 40 years. An FBI report released after Gorman's death indicated that the agency had uncovered "credible evidence that Gorman participated in child sexual abuse," though the only provable cases had occurred many years prior to the five-year statute of limitations. Richardson, who was aware of the charges, used Gorman's art work "Mystic Mesa" as recently 2002 in his campaign poster. Richardson's own "inappropriate" behavior around women also dogged him on the campaign trail.
In his current imbroglio, Richardson, who says he did nothing "improper," is being investigated in a pay-to-play scheme involving a Beverly Hills firm, CDR Financial Products Inc., which won two consulting contracts in 2004 worth about $1.4 million to advise New Mexico on a large bond issue.
CDR Financial Products has been investigated twice in recent years by federal agents regarding irregularities in the municipal bonds marketing industry--in which government officials have supposedly received under-the-table payments from companies selling municipal bonds.
Richardson to withdraw as Commerce secretary
According to this article in CNN:
http://www.msnbc.msn.com/id/28493919/
New Mexico governor cites pending investigation of business dealings
BREAKING NEWS
NBC News
updated 1 minute ago
The Associated Press contributed to this report.
New Mexico Gov. Bill Richardson, tapped in December by President-elect Barack Obama to serve as secretary of Commerce, has withdrawn his name for the position, citing a pending investigation into a company that has done business with his state.
"Let me say unequivocally that I and my Administration have acted properly in all matters and that this investigation will bear out that fact," he said Sunday in a report by NBC News' Andrea Mitchell. "But I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process."
A federal grand jury is investigating how a California company that contributed to Richardson's political activities won a lucrative New Mexico state contract.
A person familiar with the proceedings has told The Associated Press that the grand jury is looking into possible "pay-to-play" dealings between CDR Financial Products and someone in a position to push the contract through with the state of New Mexico.
Richardson said he plans to continue in his role as governor. "I appreciate the confidence President-elect Obama has shown in me, and value our friendship and working partnership. I told him that I am eager to serve in the future in any way he deems useful. And like all Americans, I pray for his success and the success of our beloved country."
Obama said Sunday he accepted Richardson's decision to withdraw with 'deep regret.'
"Governor Richardson is an outstanding public servant and would have brought to the job of Commerce Secretary and our economic team great insights accumulated through an extraordinary career in federal and state office," Obama said.
Richardson, 61, was United Nations ambassador and energy secretary during the Clinton administration, and he is in his second term as New Mexico's governor. He also served seven terms in the House of Representatives.
If he had been confirmed by the Senate as secretary of Commerce, he would have taken over a sprawling department that oversees the National Weather Service, the Census Bureau, economic development programs and more.
One of the nation's most prominent Hispanic politicians, Richardson had pledged at the time of his nomination — in English and Spanish — to work to renew the economy.
Obama on Sunday gave no indication whom he might name to replace Richardson as the nominee but said "we must move quickly to fill the void left by Governor Richardson's decision."
More articles from
Washington Post
NY Times
Yahoo News/AP
Market Watch
Wall Street Journal
KRQE Channel 13
KOAT Channel 7
Two Democratic strategists outside Obama's transition team told CNN that Obama aides pushed the withdrawal because they did not want an ethical distraction in the wake of controversy surrounding embattled Illinois Gov. Rod Blagojevich. Federal prosecutors allege that Blagojevich, a Democrat, had hoped to barter Obama's Senate seat for either money or influence.
One of the Democratic strategists described Richardson as "stunned." But Democrats who talked with CNN noted the withdrawal is in keeping with the Obama philosophy of resolving issues quickly.
Also see http://www.cnn.com/2009/POLITICS/01/04/richardson.withdrawal/index.html and http://transcripts.cnn.com/TRANSCRIPTS/0901/04/cnr.01.html
...remember, Richardson's endorsement of Obama. It was a very big deal for the then junior senator from Illinois. Richardson had of course served in the administration of Bill Clinton as ambassador to the U.N., and both Hillary Clinton and Obama lobbied for his endorsement.
It was a bit of a surprise, considering his ties to the Clintons, that he didn't throw his weight behind her and instead threw it behind the now president-elect.
...And one of these democrats told CNN that Richardson was stunned by this sudden turn of events
http://www.msnbc.msn.com/id/28493919/
New Mexico governor cites pending investigation of business dealings
BREAKING NEWS
NBC News
updated 1 minute ago
The Associated Press contributed to this report.
New Mexico Gov. Bill Richardson, tapped in December by President-elect Barack Obama to serve as secretary of Commerce, has withdrawn his name for the position, citing a pending investigation into a company that has done business with his state.
"Let me say unequivocally that I and my Administration have acted properly in all matters and that this investigation will bear out that fact," he said Sunday in a report by NBC News' Andrea Mitchell. "But I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process."
A federal grand jury is investigating how a California company that contributed to Richardson's political activities won a lucrative New Mexico state contract.
A person familiar with the proceedings has told The Associated Press that the grand jury is looking into possible "pay-to-play" dealings between CDR Financial Products and someone in a position to push the contract through with the state of New Mexico.
Richardson said he plans to continue in his role as governor. "I appreciate the confidence President-elect Obama has shown in me, and value our friendship and working partnership. I told him that I am eager to serve in the future in any way he deems useful. And like all Americans, I pray for his success and the success of our beloved country."
Obama said Sunday he accepted Richardson's decision to withdraw with 'deep regret.'
"Governor Richardson is an outstanding public servant and would have brought to the job of Commerce Secretary and our economic team great insights accumulated through an extraordinary career in federal and state office," Obama said.
Richardson, 61, was United Nations ambassador and energy secretary during the Clinton administration, and he is in his second term as New Mexico's governor. He also served seven terms in the House of Representatives.
If he had been confirmed by the Senate as secretary of Commerce, he would have taken over a sprawling department that oversees the National Weather Service, the Census Bureau, economic development programs and more.
One of the nation's most prominent Hispanic politicians, Richardson had pledged at the time of his nomination — in English and Spanish — to work to renew the economy.
Obama on Sunday gave no indication whom he might name to replace Richardson as the nominee but said "we must move quickly to fill the void left by Governor Richardson's decision."
More articles from
Washington Post
NY Times
Yahoo News/AP
Market Watch
Wall Street Journal
KRQE Channel 13
KOAT Channel 7
Thursday, January 1, 2009
No Redemption for Bill Richardson
http://www.asianweek.com/2009/01/01/no-redemption-for-bill-richardson/
Don’t forget him: Wen Ho Lee is 2008’s person of the year
I know, Lee made news back in 1999. But people forget, and they need to remember. That’s especially true now that Lee’s main tormentor, Bill Richardson — the former energy secretary under Clinton and now governor of New Mexico — has been named President-elect Barack Obama’s choice for secretary of commerce.
Richardson is relevant again. And so is Lee. Yet to my surprise, nearly ten years after Lee’s sordid treatment at the hands of Richardson, the media and the U.S. government, Lee’s name barely seems to register with anyone. Not with mainstream society or media. Not with Barack Obama. Not even with the Asian American community as a whole.
For Asian Americans (the majority of whom backed Obama), the Richardson nomination can be seen as the most serious transgression against Asian Americans in some time.
Richardson may be considered in political circles as the “Latinos’ Latino,” but to Asian Americans he remains the perpetrator of one of the worst racial profiling cases in America before 9-11.
Some of you recognize that. A few have gone to wenholee.org to sign an online petition against Richardson’s nomination. But it seems more people are sympathetic to the indignity suffered by American Idol’s William Hung rather than the injustice endured by Wen Ho Lee.
Who He Lee?
Just repeating the facts makes one cringe. Lee was the naturalized citizen from Taiwan who became a prominent American nuclear scientist. He was falsely suspected by the United States of being a spy for China, then subjected to nine months in solitary confinement.
If the consequences were only limited to Lee, I wouldn’t be surprised at how quickly it’s been forgotten. But as Lee’s fate worsened, so did Asian Americans’. In the pre-Sept. 11 world, nothing was considered more dangerous to the American way of life than an Asian American student/professor/high-tech worker with ties to China. The suspicion was entirely based on race, and it was official. It was a de facto APA witch-hunt set off by Richardson’s green light: the xenophobic targeting of Lee as a spy.
To be responsible for all that is no small deed. As the 20th Century came to a close with America becoming more and more diverse, Richardson found a way to use fear of Asians to whip up hysteria against Asian Americans not seen since World War II. For his role, Richardson deserves at least a yellow, if not scarlet, letter.
Instead, Richardson has neither been shunned nor dishonored. After a brief stint as chief executive of New Mexico, he is poised to become a major player in the “cabinet of change.”
Where is Richardson’s accountability? Where is his place in America’s racial hall of shame? It is the same place where you’ll find the respect for Asian Americans by the American political class. Nowhere.
Don’t misunderstand Lee’s silence
While Richardson maintains his prominence, Lee’s fall was hard and permanent. His scientific career lost, Lee now lives in quiet obscurity in Northern California. His daughter Alberta communicated that the family prefers to stay “above the fray.”
But don’t take that as your cue to be silent. It may be your sign to continue a broader fight for justice for Lee and the entire Asian American community.
Consider that in 2000, after all he went through, Lee was released without ever being charged with espionage. His lone crime? A lowly charge of mishandling computer files. For all he went through, Lee got an apology from the presiding federal judge, and even from Bill Clinton. But nothing came from Richardson.
Prior to his release, Lee filed a lawsuit in 1999 alleging that Clinton officials disclosed to the media that he was under investigation. Lee’s claim was neither about race nor discrimination, but simply about privacy. It would have crystallized Richardson’s culpability.
But in 2006, the government and five media organizations paid for Lee’s silence. Lee got an unprecedented $1.6 million settlement from the United States, The Washington Post, The New York Times, The Los Angeles Times, ABC News and the Associated Press. The government gave Lee $895,000 of your tax dollars to drop the suit on the condition that the money would cover legal fees and not personal damages.
The media organizations came up with $750,000, the only money he gained personally. That’s chump change for what Lee went through. But the media willingly paid it to protect its leakers. Hmm, could that have been Richardson?
Chu’s no salve
Obama knew he would catch some heat from Asian Americans on Richardson. So to balance Richardson, there’s Shinseki to Veterans’ Affairs and Steve Chu to Richardson’s old post at the Department of Energy.
Both are qualified non-affirmative action appointees. The choice of Nobel laureate Chu may also be a sign to all APAs in the scientific community that these are different times from when Richardson ran the department. Unfortunately, the appointments do nothing to hold Richardson accountable for his past.
If Richardson’s appointment flies through the Senate unchallenged, it will be a big blow to all justice-loving Americans. But for Asian Americans in particular, it will be the stripping of any moral authority we might have gained from Lee’s martyrdom.
There’s still time to let the president-elect know that this case still matters, and that we haven’t forgotten the time when APAs were singled out and looked upon with suspicion. If Richardson isn’t held accountable and soon, here is my New Year’s prediction for the future: There will be another Wen Ho Lee.
For your New Year greeting and other thoughts, see the blog at amok.asianweek.com. E-mail: emil@amok.com
Don’t forget him: Wen Ho Lee is 2008’s person of the year
I know, Lee made news back in 1999. But people forget, and they need to remember. That’s especially true now that Lee’s main tormentor, Bill Richardson — the former energy secretary under Clinton and now governor of New Mexico — has been named President-elect Barack Obama’s choice for secretary of commerce.
Richardson is relevant again. And so is Lee. Yet to my surprise, nearly ten years after Lee’s sordid treatment at the hands of Richardson, the media and the U.S. government, Lee’s name barely seems to register with anyone. Not with mainstream society or media. Not with Barack Obama. Not even with the Asian American community as a whole.
For Asian Americans (the majority of whom backed Obama), the Richardson nomination can be seen as the most serious transgression against Asian Americans in some time.
Richardson may be considered in political circles as the “Latinos’ Latino,” but to Asian Americans he remains the perpetrator of one of the worst racial profiling cases in America before 9-11.
Some of you recognize that. A few have gone to wenholee.org to sign an online petition against Richardson’s nomination. But it seems more people are sympathetic to the indignity suffered by American Idol’s William Hung rather than the injustice endured by Wen Ho Lee.
Who He Lee?
Just repeating the facts makes one cringe. Lee was the naturalized citizen from Taiwan who became a prominent American nuclear scientist. He was falsely suspected by the United States of being a spy for China, then subjected to nine months in solitary confinement.
If the consequences were only limited to Lee, I wouldn’t be surprised at how quickly it’s been forgotten. But as Lee’s fate worsened, so did Asian Americans’. In the pre-Sept. 11 world, nothing was considered more dangerous to the American way of life than an Asian American student/professor/high-tech worker with ties to China. The suspicion was entirely based on race, and it was official. It was a de facto APA witch-hunt set off by Richardson’s green light: the xenophobic targeting of Lee as a spy.
To be responsible for all that is no small deed. As the 20th Century came to a close with America becoming more and more diverse, Richardson found a way to use fear of Asians to whip up hysteria against Asian Americans not seen since World War II. For his role, Richardson deserves at least a yellow, if not scarlet, letter.
Instead, Richardson has neither been shunned nor dishonored. After a brief stint as chief executive of New Mexico, he is poised to become a major player in the “cabinet of change.”
Where is Richardson’s accountability? Where is his place in America’s racial hall of shame? It is the same place where you’ll find the respect for Asian Americans by the American political class. Nowhere.
Don’t misunderstand Lee’s silence
While Richardson maintains his prominence, Lee’s fall was hard and permanent. His scientific career lost, Lee now lives in quiet obscurity in Northern California. His daughter Alberta communicated that the family prefers to stay “above the fray.”
But don’t take that as your cue to be silent. It may be your sign to continue a broader fight for justice for Lee and the entire Asian American community.
Consider that in 2000, after all he went through, Lee was released without ever being charged with espionage. His lone crime? A lowly charge of mishandling computer files. For all he went through, Lee got an apology from the presiding federal judge, and even from Bill Clinton. But nothing came from Richardson.
Prior to his release, Lee filed a lawsuit in 1999 alleging that Clinton officials disclosed to the media that he was under investigation. Lee’s claim was neither about race nor discrimination, but simply about privacy. It would have crystallized Richardson’s culpability.
But in 2006, the government and five media organizations paid for Lee’s silence. Lee got an unprecedented $1.6 million settlement from the United States, The Washington Post, The New York Times, The Los Angeles Times, ABC News and the Associated Press. The government gave Lee $895,000 of your tax dollars to drop the suit on the condition that the money would cover legal fees and not personal damages.
The media organizations came up with $750,000, the only money he gained personally. That’s chump change for what Lee went through. But the media willingly paid it to protect its leakers. Hmm, could that have been Richardson?
Chu’s no salve
Obama knew he would catch some heat from Asian Americans on Richardson. So to balance Richardson, there’s Shinseki to Veterans’ Affairs and Steve Chu to Richardson’s old post at the Department of Energy.
Both are qualified non-affirmative action appointees. The choice of Nobel laureate Chu may also be a sign to all APAs in the scientific community that these are different times from when Richardson ran the department. Unfortunately, the appointments do nothing to hold Richardson accountable for his past.
If Richardson’s appointment flies through the Senate unchallenged, it will be a big blow to all justice-loving Americans. But for Asian Americans in particular, it will be the stripping of any moral authority we might have gained from Lee’s martyrdom.
There’s still time to let the president-elect know that this case still matters, and that we haven’t forgotten the time when APAs were singled out and looked upon with suspicion. If Richardson isn’t held accountable and soon, here is my New Year’s prediction for the future: There will be another Wen Ho Lee.
For your New Year greeting and other thoughts, see the blog at amok.asianweek.com. E-mail: emil@amok.com
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