Wednesday, June 10, 2009

CDR Investigation Over?

That's what New Mexico Finance Authority chairman Steve Flance told a legislative oversight committee this afternoon. He said the FBI has wrapped up the investigation and sent it to U.S. Attorney General Eric Holder.

Flance said he was told that by NMFA lawyer Rey Romero. Romero told reporters he couldn't say who told him that.

For those trying to grasp all the ongoing financial scandals, the CDR investigation is about the California company that got to handle part of the state transportation bonds for the GRIP program -- around the same time the company made hefty contributions to Gov. Bill Richardson's political committees. This is the investigation that derailed Richardson's appointment as U.S. Commerce secretary.

What Flance said basically confirms what KRQE reported recently, using an anonymous source. However, Flance's statement appears to be the first time that any state official has said it in public.

Flance also made some interesting remarks to the committee about how the Finance Authority got involved in "swaps" and derivatives.

"The mistake we made was listening to financial advsers who had an interest in the work," he said. "Some conflicts of interest were not disclosed to the board."

Flance later told reporters he was refering to an advisory group set up by former Finance Authority director David Harris to look at alternative ways to finance the GRIP project. Advisers on that group included representatives of J.P. Morgan and other companies that later handled some of the bonds, Flance said.

"We thought we were getting independent advise, but (it turned out) they had a product they wanted to sell. That's my own opinion."

Flance said he and other board members have been interviewed by the FBI, who were "friendly" and mainly wanted documents. He said never testified before the CDR grand jury -- and that no current board member or current NMFA staffer has testified. The key word is "current."

It's known that the grand jury is looking at Harris as well as former Richardson chief of staff Dave Contarino, Mike Stratton, who worked as a Richardson presidential campaign official as well as a CDR lobbyist, and Chris Romer, a Colorado state senator who works for J.P. Morgan.