Thursday, October 29, 2009

CDR Indicted

Gov. Bill Richardson and his administration escaped indictments over a pay-to-play investigation involving CDR Financial Products, but CDR founder David Rubin and two of his underlings were indicted today.

Bloomberg reports that the indictments were out of federal court in New York.

The indictment in U.S. District Court in New York alleges that CDR and its employees conspired to fix prices on investment contracts that local governments buy with the proceeds of municipal bonds. CDR managed the bidding process for the investments on behalf of local governments.

The Associated Press version notes Richardson's brush with CDR, which cost him his seat in the Obama cabinet.

Federal prosecutors in New Mexico had also investigated CDR for its links to Richardson, the Democratic governor. The investigation forced Richardson to bow out of a possible Cabinet position in the Obama White House.
Rubin and his firm contributed $110,000 to Richardson political committees from 2003 to 2005. The largest of those contributions, $75,000, was made less than a week before CDR was selected in June 2004 by the New Mexico Finance Authority to handle the reinvestment of idle bond proceeds.
CDR was hired as a financial adviser on state transportation bond deals, which generated almost $1.5 million in fees for CDR in 2004-2005.

Another Update:

The Associated Press further reports:

Thursday’s indictment does not mention Richardson, but it does refer to a May 20, 2004, call allegedly placed between people in New Mexico and New York in which a bid was rigged. Two months later, a state housing agency began receiving interest payments at what investigators say was an artificially reduced rate.