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.
Showing posts with label pay to play. Show all posts
Showing posts with label pay to play. Show all posts
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?"
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.
Tuesday, December 23, 2008
Mallard Fillmore/Bruce Tinsley
Cartoon from December 23, 2008. Does Mr. Tinsley think Gov. Richardson traded a promised appointment with then Sen. Obama for his support over Sen. Clinton during the primary? After all, President Clinton appointed Bill Richardson UN ambassador to the United Nation followed by Secretary of Energy.
Tuesday, December 16, 2008
Grand Jury Investigates Contributions to Richardson
The FBI has been investigating Gov. Richardson since August, see additional links at
http://www.latimes.com/news/nationworld/nation/la-na-richardson17-2008dec17,0,4246219.story
http://www.nytimes.com/2008/12/19/us/politics/19richardson.html
Gov. Richardson ducked a reporter's question from KRQE TV and when the station reported that, the Governor's deputy chief of staff, Gilbert Gallegos, had the nerve to send an email accusing the reporter of misconduct. You can watch the news clip and read the email exchange between Gallegos and the TV station at http://www.krqe.com/dpp/news/politics/politics_krqe_santa_fe_gallegos_complaint_200812171333. Michael Herzenberg from KRQE also reported that "One contribution reportedly was made just after CDR got the first deal. The other donation was made four days before it got the second job."
In a KOAT TV article, http://www.koat.com/news/18313553/detail.html, titled, "Donor Probe Could Impact Richardson's Confirmation Process", it says, "Calls to the Obama transition team for a comment on the grand jury probe were not returned."
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/15/AR2008121502940.html
By Carol D. Leonnig
Washington Post Staff Writer
Tuesday, December 16, 2008; Page A04
A federal grand jury is investigating whether a financial firm improperly won more than $1.4 million in work for the state of New Mexico shortly after making contributions to political action committees of Gov. Bill Richardson (D).
The probe focuses on whether the governor's office urged a state agency to hire CDR Financial Products. The probe is in a highly active stage at a time when President-elect Barack Obama has chosen Richardson as his nominee for secretary of commerce, according to two sources familiar with the investigation.
The grand jury in Albuquerque is expected to hear testimony today from several key witnesses, including officials at Richard's political action committees and bankers at J.P. Morgan who worked with CDR on the state's investments.
The inquiry is part of a long-running nationwide investigation into "pay-to-play" practices in local government bond markets. In other cities, federal investigators are questioning whether financial firms have lavished politicians with money and gifts in exchange for fee-paying work advising municipal and local governments on investments. Authorities indicted the mayor of Birmingham, Ala., this month on charges of taking hundreds of thousands of dollars in gifts and loans from a firm that led the city into toxic investments and massive bankruptcy.
In the New Mexico case, the FBI and federal prosecutors are investigating how CDR, based in Beverly Hills, Calif., won lucrative fees from the New Mexico Finance Authority in 2004 soon after donating $100,000 to two Richardson organizations.
From 2003 to 2004, CDR Financial gave $75,000 to Sí Se Puede, which paid for expenses at the Democratic National Convention in 2004. CDR's president and founder, David Rubin, also gave $25,000 to Moving America Forward, which funded Richardson's efforts to register Hispanic and American Indian voters.
Rubin was generous to Obama's campaign as well, giving $29,000 to help elect the senator to the White House. Yesterday, the Obama transition office declined to comment on the development.
Gilbert Gallegos, a spokesman for Richardson, said the governor was "aware of questions surrounding some financial transactions at the New Mexico Finance Authority" and expected state officials to cooperate fully. Gallegos declined further comment.
The U.S. attorney's office in New Mexico also declined to comment on the investigation, which began in the summer. Several Finance Authority board members have publicly confirmed being interviewed by the FBI. Paul Kennedy, an attorney for Richardson's former chief of staff, David Harris, confirmed that his client had been interviewed by the FBI in the summer but declined to comment further.
CDR's attorney, Richard Beckler, declined to answer questions about the probe's focus.
"CDR has always tried to abide by these byzantine campaign finance regulations and is cooperating fully with this investigation," Beckler said in a telephone interview yesterday.
CDR made $1.48 million advising the authority on interest-rate swaps and refinancing of funds related to $1.6 billion in transportation bonds issued by the agency, state officials confirmed. Interest-rate swaps are financial contracts based on the value of commodities, loans or other assets, and debtors sometimes use them to lower borrowing costs. But many swaps have recently proven unwise as the assets upon which they were based plummeted in value.
The state hired CDR after requesting proposals for a bond adviser on Dec. 30, 2003. Sources familiar with the investigation said CDR initially did not make the list of the top three bidders. But the authority committee considering the bids redid the selection process and split some work, eventually hiring CDR for a part.
Committee Chairman Rick Homans was Richardson's economic development secretary at the time. He is now Richardson's taxation and revenue secretary and has declined to comment.
Staff researcher Julie Tate contributed to this report.
http://www.latimes.com/news/nationworld/nation/la-na-richardson17-2008dec17,0,4246219.story
http://www.nytimes.com/2008/12/19/us/politics/19richardson.html
Also read the comments at http://www.topix.net/forum/source/krqe/TN9DGK1CH1O359SAR and http://www.topix.net/forum/source/santa-fe-new-mexican/T1MEBC8F557QJ9NR4. One of them wrote, "Trust me, as I have some information on this. It was not a No Bid Contract. They issued an RFP for the work. The company wasn't going to be the top pick for the RFP. Then they made a donation to the Gov. 4 days later, they had the contract."
Asked whether the probe focused only on CDR's actions in securing or executing the contract, the person with knowledge of the investigation said, "It is more than that."
Gov. Richardson ducked a reporter's question from KRQE TV and when the station reported that, the Governor's deputy chief of staff, Gilbert Gallegos, had the nerve to send an email accusing the reporter of misconduct. You can watch the news clip and read the email exchange between Gallegos and the TV station at http://www.krqe.com/dpp/news/politics/politics_krqe_santa_fe_gallegos_complaint_200812171333. Michael Herzenberg from KRQE also reported that "One contribution reportedly was made just after CDR got the first deal. The other donation was made four days before it got the second job."
In a KOAT TV article, http://www.koat.com/news/18313553/detail.html, titled, "Donor Probe Could Impact Richardson's Confirmation Process", it says, "Calls to the Obama transition team for a comment on the grand jury probe were not returned."
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/15/AR2008121502940.html
By Carol D. Leonnig
Washington Post Staff Writer
Tuesday, December 16, 2008; Page A04
A federal grand jury is investigating whether a financial firm improperly won more than $1.4 million in work for the state of New Mexico shortly after making contributions to political action committees of Gov. Bill Richardson (D).
The probe focuses on whether the governor's office urged a state agency to hire CDR Financial Products. The probe is in a highly active stage at a time when President-elect Barack Obama has chosen Richardson as his nominee for secretary of commerce, according to two sources familiar with the investigation.
The grand jury in Albuquerque is expected to hear testimony today from several key witnesses, including officials at Richard's political action committees and bankers at J.P. Morgan who worked with CDR on the state's investments.
The inquiry is part of a long-running nationwide investigation into "pay-to-play" practices in local government bond markets. In other cities, federal investigators are questioning whether financial firms have lavished politicians with money and gifts in exchange for fee-paying work advising municipal and local governments on investments. Authorities indicted the mayor of Birmingham, Ala., this month on charges of taking hundreds of thousands of dollars in gifts and loans from a firm that led the city into toxic investments and massive bankruptcy.
In the New Mexico case, the FBI and federal prosecutors are investigating how CDR, based in Beverly Hills, Calif., won lucrative fees from the New Mexico Finance Authority in 2004 soon after donating $100,000 to two Richardson organizations.
From 2003 to 2004, CDR Financial gave $75,000 to Sí Se Puede, which paid for expenses at the Democratic National Convention in 2004. CDR's president and founder, David Rubin, also gave $25,000 to Moving America Forward, which funded Richardson's efforts to register Hispanic and American Indian voters.
Rubin was generous to Obama's campaign as well, giving $29,000 to help elect the senator to the White House. Yesterday, the Obama transition office declined to comment on the development.
Gilbert Gallegos, a spokesman for Richardson, said the governor was "aware of questions surrounding some financial transactions at the New Mexico Finance Authority" and expected state officials to cooperate fully. Gallegos declined further comment.
The U.S. attorney's office in New Mexico also declined to comment on the investigation, which began in the summer. Several Finance Authority board members have publicly confirmed being interviewed by the FBI. Paul Kennedy, an attorney for Richardson's former chief of staff, David Harris, confirmed that his client had been interviewed by the FBI in the summer but declined to comment further.
CDR's attorney, Richard Beckler, declined to answer questions about the probe's focus.
"CDR has always tried to abide by these byzantine campaign finance regulations and is cooperating fully with this investigation," Beckler said in a telephone interview yesterday.
CDR made $1.48 million advising the authority on interest-rate swaps and refinancing of funds related to $1.6 billion in transportation bonds issued by the agency, state officials confirmed. Interest-rate swaps are financial contracts based on the value of commodities, loans or other assets, and debtors sometimes use them to lower borrowing costs. But many swaps have recently proven unwise as the assets upon which they were based plummeted in value.
The state hired CDR after requesting proposals for a bond adviser on Dec. 30, 2003. Sources familiar with the investigation said CDR initially did not make the list of the top three bidders. But the authority committee considering the bids redid the selection process and split some work, eventually hiring CDR for a part.
Committee Chairman Rick Homans was Richardson's economic development secretary at the time. He is now Richardson's taxation and revenue secretary and has declined to comment.
Staff researcher Julie Tate contributed to this report.
Saturday, February 3, 2007
NY Times 02/03/2007
http://www.nytimes.com/2007/02/23/us/politics/23richardson.html?pagewanted=2
Poor Judgment and Bad Management
Although not laid at Mr. Richardson’s door, corruption scandals have also tarnished the state —
“pay to play,” in the words of critics. Some of Mr. Richardson’s embarrassing appointees stepped down, including a former state police officer named to a magistrate judgeship who resigned after being caught ordering the release of a friend jailed on a drunken-driving charge.
“One bad judge out of 56,” Mr. Richardson said, acknowledging “our vetting procedures are not the most extensive.”
____________________
Sexual Harassment
In late 2005, Lt. Gov. Diane Denish told The Albuquerque Journal that Mr. Richardson
“pokes me” when they sit together, calling that more annoying and likely to be misconstrued than improper.
“He pinches my neck,” Ms. Denish said. “He touches my hip, my thigh, sort of the side of my leg.”
The governor waved that off, telling The Journal: “I tease Diane. I touch guys. It’s my way of lessening tension.”
Although not laid at Mr. Richardson’s door, corruption scandals have also tarnished the state —
“pay to play,” in the words of critics. Some of Mr. Richardson’s embarrassing appointees stepped down, including a former state police officer named to a magistrate judgeship who resigned after being caught ordering the release of a friend jailed on a drunken-driving charge.
“One bad judge out of 56,” Mr. Richardson said, acknowledging “our vetting procedures are not the most extensive.”
____________________
- Richardson opposed the 1st Gulf War but endorsed W's invasion of Iraq, "I think there is such intensive pressure on both sides that only one more deadline, only one more chance for Saddam Hussein is going to be allowable. So I think the administration is wise in pursuing this course that says OK, total disarmament in two weeks and that's it."
- He told a gay-rights forum, Logo, that homosexuality is a choice.
- He said Justice Bryon White who voted against Roe v Wade was his model Supreme Court justice. It appears that Justice White voted against Miranda rights and wrote the majority opinion on Bowers v Hardwick, banning homosexual sodomy, see comments section at http://www.dailykos.com/story/2007/4/27/113257/730
- He was reluctant to fire Alberto Gonzales because he is a fellow Hispanic.
- His stance on illegal immigration is troublesome to many--he doesn't want to build a wall on the Mexican border, he wants to legalized all illegal immigrants in this country. In http://www.nytimes.com/2007/05/24/us/politics/24richardson.html,
- Richardson initially said he would support the immigration compromise announced earlier this week. But later on, he said that after reading it in detail, he had decided to oppose it, saying the measure placed too great a burden on immigrants — tearing apart families that wanted to settle in the United States, creating a permanent tier of second-class immigrant workers and financing a border fence that Mr. Richardson had long opposed.
- He said during the campaign, "Iowa, for good reason, for constitutional reasons, for reasons related to the Lord, should be the first caucus and primary."
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