Taxes Increases Inevitable, Richardson Says

I just got back from a press conference with Gov. Bill Richardson. Although he's campaigned both for president and for re-election as governor as a tax-cutting Democrat, Richardson told reporters today that tax increases are "inevitable" during the next legislative session because of the budget crisis.

"It's very painful," he said. Richardson declined to say which taxes he wants to boost. He said he'll soon be appointing a committee to study the best ways to raise revenue.

On another topic, I asked Richardson if he planned to follow Lt. Gov. Diane Denish's example and give his political contributions from indicted CDR found David Rubin to charity.

His answer proves he's still got a sense of humor. "I'll have to review that," he said. "Did I get donations from them?"

For the record, the $110,000 CDR gave to Richardson's political committees led to a federal investigation and cost him a job in the Obama cabinet. The investigation ended with the Justice Department deciding not to indict anyone.

Smiley in Bloomberg

Bloomberg.com has a story this morning featuring Vincent "Smiley" Gallegos -- who currently is facing state charges alleging misuse of bond money when he was director of a state affordable housing program -- and CDR Financial Products, whose president and founder was indicted last week on unrelated charges in New York federal court.

Gallegos, then the executive director of Region III Housing Authority New Mexico Inc., sold bonds in February 2003 with the help of Los Angeles-based CDR Financial Products Inc. and its founder, David Rubin.

“At the time the authority issued the bonds, there was ample evidence that the program would not be successful,” the IRS wrote in March 2007 after investigating the transaction. “A prudent person would not have taken the same actions.”

Two months later, federal tax authorities revoked the bonds’ tax exemption. The IRS found that one of the agency’s banks, Paris-based Societe Generale SA, would earn as much as $1.5 million on a program for low-income and first-time homebuyers that lent only about $2.6 million. Tax authorities also found that CDR was collecting more than $50,000 a year from Societe Generale in fees not disclosed in public bond documents.

Gallegos, 56, and Rubin, 47, are under criminal indictments as the result of separate investigations unrelated to that debt.

Bloomberg quotes Gallegos' lawyer Paul Kennedy saying no jury will convict his client. The story also notes "Gallegos didn’t open the door of his home in Albuquerque when a reporter knocked, nor did he answer his mobile phone."

Gifts From CDR

State Republican Chairman Harvey Yates, responding last night to the CDR indictments, is calling for Gov. Bill Richardson and Lt. Gov. Diane Denish to "relieve themselves of all campaign contributions collected from (CDR owner David) Rubin." That's not such an unusual demand. What's unique is that Yates says the money shouldn't be given to charity, which is the usual route for tainted campaign cash. (In the past I've sardonically referred to this as the "Kickbacks for the Kiddies" campaign.)

Instead, Yates says, these funds should be given to the state attorney general "for an account maintained specifically to investigate political corruption in New Mexico.” That might not be a bad idea to have such an account for toxic campaign funds. Of course our charities that have come to depend upon windfalls from corruption would be hurt.

While thinking about those CDR contributions, I came upon this January 2009 report from the Institute of Money in State Politics. It's a look at contributions from Rubin and CDR to politicians from around the country.

Pennsylvania Gov. Ed Rendell tops the list with $35,000 in contributions. 2003 California gubernatorial candidate Cruz Bustamante is second with $21,200 and Richardson third with $20,000.

Of course, these numbers aren't complete, at least as far as Richardson goes. Most of CDR's contributions to him went to Richardson PACs Moving America Forward and Si Su Puede, which paid for hotels, limousines etc. at the 2004 Democratic National Convention in Boston for Richardson and his staff.

In fairness, I don't know whether there are simialr PACs for Rendell or Bustamante to which CDR might have contributed. In fact a Pittsburgh paper reported earlier this year that Rendell received $40,000 from Rubin.

The report lists $10,000 in CDR contributions to Denish. As her campaign for governor continues, expect to hear more about this cash from the state GOP and the Republican gubernatorial candidates.

UPDATE 2:10 p.m.:

According to Denish campaign spokesman Oren Shur, the campaign donated its old CDR contributions to two Albuquerque charities this morning.

"Earlier today, the campaign delivered a $5,000 check to the Storehouse, which provides food to families in need, and a $5,000 check to the Barrett Foundation, a shelter for women and children," Shur said in an e-mail.

xxxx

Courtesy of Heath Haussamen, here's a copy of Thursday's CDR indictment in New York federal court.

Rubin Indictment

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.

UPDATE
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.

Richardson Ripples

My story on the effect of the U.S. Justice Department's decision not to prosecute Gov. Bill Richardson in the alleged CDR pay-to-play scheme can be found HERE.

Basically most the people I talked to Thursday believe Richardson's political career and reputation will be revived and there could be some kind of position in the Obama administration ahead for him -- though probably not right away.

In another development, The New York Times reported about a letter U.S. Attorney Greg Fouratt sent to witnesses in the grand jury investigation of the CDR matter.

In the letter, Mr. Fouratt’s office said he would not pursue criminal charges, but it added that “pressure from the governor’s office resulted in the corruption of the procurement process” and said that the letter “should not be interpreted as exoneration of any party’s conduct in that matter.”

The Times story also notes:

Mr. Richardson’s aides have long maintained that the acting United States attorney, Gregory J. Fouratt, a Republican, went after Mr. Richardson for political reasons, effectively sabotaging his chance to serve in the cabinet. Mr. Fouratt has denied that.

Richardson on the CDR Investigation

After initially declining comment on the news that the Justice Department won't indict Gov. Bill Richardson on charges related to the CDR investigation, the governor's office just issued this news release.

“While the U.S. Attorney’s Office has not notified Gov. Richardson about the completion of its investigation, it appears that no action will be taken as a result of the year-long inquiry,” Deputy Chief of Staff Gilbert Gallegos said.

“Gov. Richardson has known all along that neither he nor any staff members committed any transgressions during their successful fundraising back in 2004. The U.S. Attorney’s thorough and lengthy investigation has apparently determined the same thing – that no indiscretions occurred.

Although patience was difficult while Gov. Richardson and his administration were being falsely accused and were the subject of rumors and speculation through the news media, Gov. Richardson chose to remain silent and let the justice system run its course. Gov. Richardson is gratified that this year-long investigation has ended with the vindication of his administration.”

AP Reports Justice Dept. Has Cleared Richardson

The Associated Press says "a person familiar with the investigation" of Gov. Bill Richardson officials and a California investment company called CDR says neither Richardson nor his top aides will be prosecuted on any charges having to do with an alleged pay-to-play scheme.

"It's over. There's nothing. It was killed in Washington," the person told The Associated Press.

The story is HERE

The CDR investigation sank Richardson's nomination to be President Obama's secretary of Commerce and sandbagged Lt. Gov. Diane Denish' expect ascent to the governor's office.

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.

Heath is Suing

Blogger Heath Haussamen is suing the New Mexico Finance Authority for refusing to give him copies of subpoenas related to the CDR investigation.

You can read Heath's post about the suit HERE and see the petition itself HERE .

What's screwy about the situation is that one of the few documents the governor's office has released about the investigation is the subpoena the grand jury sent them.

Why would releasing the NMFA document jeopardize the grand jury investigation, as the agency claims, when releasing the governor's document doesn't? Maybe that'll get answered in court.

What a Tangled Web We Weave

Here's another link between impeached Illinois Gov. and future reality show star Rod Blagojevich and our Gov. Bill Richardson -- besides that old $20,000 campaign contribution Bill gave Blago and the "French connection" drug deal they were in together.

Bloomberg is reporting that Blagojevich’s top fundraiser represented CDR Financial Products Inc. -- that company at the center of the grand jury investigation that halted Richardson's cabinet appointment early this year.

Reports Bloomberg:

Milan Petrovic, who raised $1.96 million for Blagojevich, introduced CDR to Illinois budget and debt officials, according to e-mails obtained under a public records request. He and his lobbying firm also donated $20,000 to New Mexico Governor Bill Richardson, a one-time Democratic presidential candidate who withdrew from consideration as U.S. Commerce Secretary following disclosure of the CDR probe.

Richardson “is a public official I admire,” Petrovic, 43, said in a telephone interview, declining to comment further.

Read the whole story HERE.

Roundhouse Roundup: Company at Club CDR

A version of this was published in The Santa Fe New Mexican
February 1, 2009

Bill Richardson isn't the only Democratic governor being mentioned in connection with possible "pay-to-play" politics involving CDR Financial Products.

According to a story Wednesday in The Pittsburgh Tribune-Review, Pennsylvania Gov. Ed Rendell also has a CDR problem.

The state of Pennsylvania awarded nearly $600,000 in fees to CDR. In one of those strange coincidences that we're used to reading about in this state, CDR's CEO, David Rubin, donated $40,000 to Rendell's campaign committee.

According to a story last month in the Tribune-Review, CDR "won a contract in 2003 with the Pennsylvania Housing Finance Agency that Rendell has said he wasn't aware of."

That's less money than CDR donated to Richardson, whose various political committees received more than $100,000 from Rubin and CDR. The company made nearly $1.5 million as part of a financial team for the state transportation-construction program known as GRIP, which stands for Governor Richardson's Investment Partnership. Both Richardson and Rubin have denied any pay to play.

Rendell and Richardson are similar in many ways. Both are gregarious politicians who have been frequent guests on cable news shows. As pointed out in this column a few years ago, both have gotten in trouble for ordering their state police drivers to exceed the speed limit.

Unlike Richardson, there's no indication that a federal grand jury is looking into Rendell's dealings with CDR.

However, CDR's dealings in the Keystone State have caught the eye of federal investigators before. Bloomberg reported that in 2001 CDR hired Philadelphia lawyer Ron White, who was chief fundraiser for Mayor John Street. The company paid White a $5,000 retainer to help CDR win work with the city.

"Rubin donated $15,000 to Street's election committee from December 2000 to June 2003, the records show," Bloomberg reported. "In addition, CDR gave White three tickets to the 2003 Super Bowl game in San Diego and also provided a limousine ride to the stadium. White brought Philadelphia Treasurer Corey Kemp to the event." The city of Philadelphia paid the firm $150,000 for financial advice, while banks paid CDR at least $515,000 from profits earned on transactions with the city, Bloomberg reported.

According to the Tribune-Review and other Pennsylvania papers, CDR is not Rendell's biggest headache. The Patriot News in Harrisburg reported Wednesday that the state auditor there is accusing Rendell's administration of "hiding the details of nearly $600 million in technology contracts with one company and is suggesting abuses ranging from vendor favoritism to no-bid contracts."

The paper says a draft audit report "indicates the administration stonewalled the Democratic auditor general's staff in its quest to unravel details that led to contracts with Deloitte Consulting and its affiliates for the years 2004 through 2007." Deloitte is a New York-based software company. A Rendell spokesman denied any lack of cooperation with the auditor.

The Pennsylvania Legislature is reacting. One bill introduced there would ban contracts from being awarded for one year to anyone who has made political donations to a state or local officeholder. Another would require competitive bidding for contracts of more than $100,000. Both were introduced by Republicans — which is the minority party in that state — and a Rendell spokesman has said the bills are politically motivated.

A Valentine from Val: Last Friday, I ran into actor and possible gubernatorial candidate Val Kilmer in the reception area of state Sen. Phil Griego's office at the Capitol.

That's about the last place in the Roundhouse I ever expected to see Kilmer. Back in 2003, when Rolling Stone quoted Kilmer as saying, "I live in the homicide capital of the Southwest. Eighty percent of the people in my county are drunk," Griego, a Democrat who represents the Pecos area southeast of Santa Fe in which Kilmer lives, was the most prominent official to express outrage. Kilmer claimed he was misquoted.

And right outside of Griego's office, Kilmer told me he was misquoted again — this time by Esquire magazine, which quoted Kilmer as characterizing Vietnam vets as mostly "borderline criminal or poor."

So why was Kilmer going to see Griego that day? "He just wanted to talk," Griego said. "We mainly talked about the prequel to Tombstone he's doing."

But besides yacking about the movies, Kilmer offered to support a bill Griego is sponsoring, SB379, which aims to tighten rules on off-highway vehicles. Kilmer offered to write a letter in support, Griego said, and on Tuesday he came through.

Kilmer's letter says the bill is a response "to the concerns of ranchers, like myself, environmentalists, parents and off-road vehicle enthusiasts ... "

"As a rancher and lover of the land I want it protected," Kilmer wrote. "As a parent, I want my children to be properly educated and safe. As a taxpayer I want our dollars spent in the most efficient manner. That is why I support this bill and I urge the Legislature to pass it and the governor to sign it."

Kilmer wrote than he "grew up riding both off-road vehicles, motor cross and horses with my family and friends."

The bill on Wednesday got a unanimous do-pass recommendation by the Senate Corporations and Transportation Committee. It's doubtful that Kilmer's letter was the deciding factor. Griego said he still deplores Kilmer's 2003 quote as well as the comments from Esquire.

LENO FOR GOVERNOR?

I didn't go to Jay Leno's show at Buffalo Thunder casino Saturday night, but two people told me this little anecdote, one of whom is a fellow reporter.

Apparently the governor attended the show with some staff and Leno recognized him from the stage. Leno made some reference to the CDR investigation -- I still haven't gotten exactly what he said -- and some people in the crowd yelled "Guilty!"

I don't know what, if any, Richardson's reaction to this was. But that's a sign things might be getting ugly.

Leno, by the way, is credited for influencing at least one New Mexico law -- at Richardson's expense. Back in 2006 on The Tonight Show, he made fun of a statement Richardson made about cockfighting.

“In New Mexico, Gov. Bill Richardson — this is unbelievable — Gov. Bill Richardson said he is still undecided about cockfighting, which is not banned in New Mexico. It’s still legal. This is what he said, he said there are arguments on both sides. Really? What is the good argument for cockfighting? Does this keep the roosters off the street?”

This got wide play, and a few months later, shortly before he began his presidential campaign, Richardson ended his neutrality on cockfighting. In 2007, the Legislature, with the governor's support, banned it.

ROUNDHOUSE ROUNDUP: THE SCANDALS GO ROUND AND ROUND

A version of this was published in The Santa Fe New Mexican
January 22, 2009

Earlier this week, I reported that one of the listed directors of the secretive Moving America Forward Foundation — a “charity” founded by Gov. Bill Richardson in 2004 to encouraging minority voting — had been a lobbyist for a corporation that runs private prisons in New Mexico.

Another director of MAFF — which by law doesn’t have to disclose contributions or expenditures and has chosen not to do so — also has ties with a company that has benefited under the Richardson administration.

Anthony Correra was a major contributor to Richardson’s 2002 gubernatorial campaign, giving more than $13,000, according to the Institute of Money in State Government.

According to a story in The Albuquerque Journal last November, Correra, who has hosted fundraisers for prominent national Democrats with Richardson, is the father of Marc Correra of Santa Fe, who owns 30 percent of Horse Racing at Raton, the company approved last year by the New Mexico Racing Commission for a $50 million racetrack and casino in northeastern New Mexico.

Richardson, who appointed all five members of the commission, denies his association with Anthony Correra had anything to with Marc Correra’s company getting the nod from the commission for New Mexico’s final “racino” license.

Marc Correra didn’t return a phone call Wednesday. His father has an unpublished number.

While Anthony Correra was generous with Richardson in 2002, according to campaign finance reports, neither he nor his son contributed to the governor’s 2006 re-election or his 2008 presidential race.

Both Correras, however, did drop a lot on other Democratic candidates and organizations.

Anthony Correra gave out more than $65,000 in 2008, including donations to Barack Obama and Hillary Clinton. (All contributions to these presidential candidates were made after Richardson dropped out of the presidential race.) He contributed to party organizations in several states. His biggest contribution was $28,500 to the Democratic National Committee.

Marc Correra gave $38,950 to Democratic candidates and committees, including $28,500 to the DNC. His wife, Claudia Correra, who worked for Richardson as a “protocol officer,” gave more than $6,000 to various Democratic candidates.

The other MAFF director I mentioned was Joe Velasquez, a former adviser for Richardson’s presidential bid. He also was a registered lobbyist in the state in 2006 for a subsidiary of The GEO Group, which runs three private prisons in the state.

MAFF has raised at least $1.7 million since 2004.

Did any of the Correras or Horse Racing at Raton or The GEO Group give to MAFF? We don’t know. Richardson’s team still won’t release the names of contributors.

Meanwhile, back at the CDR investigation: Bloomberg.com reported Wednesday on a Sept. 22 subpoena of the Governor’s Office that basically confirms the federal grand jury in Albuquerque is looking into the activities of former Richardson chief of staff Dave Contarino, political adviser Mike Stratton, former Richardson economic adviser David Harris and JPMorgan Chase & Co. banker Chris Romer of Denver.

“The subpoena shows that the grand jury investigation centers on Beverly Hills-based CDR, which donated $100,000 to Richardson’s political committees in 2003 and 2004. During 2004, it was awarded a contract worth almost $1.5 million to advise the New Mexico Financial Authority on bond deals,” Bloomberg reporters William Selway and Martin Z. Braun wrote.

Stratton of Littleton, Colo., worked as a lobbyist for CDR and JPMorgan. He also was a top adviser in Richardson’s 2008 presidential campaign.

According to the Bloomberg piece, the feds also are interested in Richardson’s tenure as chairman of the Democratic Governors Association. The subpoena, according to Bloomberg, also requested correspondence with staff of the DGA, which Richardson chaired in 2005 and 2006.

On Wednesday, I revisited the DGA’s reports, filed with Internal Revenue Service during the Richardson tenure. In the past, reporters have gotten several stories out of those reports, mainly about plane trips by Richardson paid for by companies having business before the state, such as payday loan and tobacco companies as well as large contributions from The GEO Group and Stanley Fulton, a racetrack owner who was fighting the approval of a potential rival in Southern New Mexico.

But no, there’s no record of contributions to the Democratic Governors Association from CDR or its chief executive, David Rubin, in the reports covering 2005 and 2006.

It’s more likely they’re interested in Stratton, who, as a consultant, was paid more than $233,000 by the DGA during that time.

(Also check out AP reporter Barry Massey's story on the state having to post $16 million in collateral because of a drop in value of the CDR transactions.)

Fading green: Longtime local Green Party leader Rick Lass has jumped ship. Lass, who last year ran a tough campaign against Democratic Public Regulation Commission candidate Jerome Block Jr., registered Democratic earlier this month.

“I switched a couple of weeks ago,” Lass told me in an e-mail Wednesday. “The Dem party is making great strides for progressive causes these days, and I want to be in a place where my political work can be more effective.”

Lass lost to Block in the general election. But he did manage to carry Santa Fe County — the largest county in the PC’s 3rd District — as well as Los Alamos. He attracted the support of a group called Democrats for Lass formed by longtime local ward chairman Bernie Logue y Perea, former state Democratic Party Chairman Earl Potter and others.

ROUNDHOUSE ROUNDUP: WHEN THE GOING GETS TOUGH, THE TOUGH GO CAMPAIGNING

A version of this was published in The Santa Fe New Mexican
January 15, 2009

When in doubt, hit the campaign trail.

That seems to be the reflex of Gov. Bill Richardson this week as scandals mount, the state’s economic picture grows more grim, and tensions with the state Legislature — at least the chairwoman of the Senate Rules Committee — grow.

A news release from Richardson’s office earlier this week reminded me of e-mails from his presidential campaign. But instead of naming stops in towns like Cedar Rapids, Iowa City and Des Moines, the new one listed New Mexico towns and cities — and instead of selling himself as the best possible commander-in-chief, Richardson is talking about his legislative priorities and budget plan.

On Wednesday, he went to Farmington, Las Cruces and Roswell to talk about public-safety initiatives. Today, he’s scheduled for a breakfast with “local leaders” in Hobbs; a speech about education initiatives at the Lincoln Jackson Family Center Cafeteria in Clovis; and another speech and “Pre-Groundbreaking Rally” at the Tucumcari High School Auditorium.

Maybe that’s not as romantic as running for president. But the events aren’t that different from speaking to a couple of dozen people in a freezing airplane hangar in Dubuque, Iowa, or strolling bookstores and coffee shops in Portsmouth, N.H.

The audiences are bound to be friendly, and you don’t have to deal with a bunch of grumpy senators or jaded statehouse reporters asking questions about grand juries and lawyers.

Speaking of such unpleasantness: It seems that ever since Richardson announced he was withdrawing as President-elect Barack Obama’s commerce secretary nominee, there’s been a steady stream of news about state scandals popping up.

On Wednesday, two scandals duked it out for column inches and TV news airtime — allegations of pay-to-play at the Education Retirement Board and new revelations about funny expenditures by the state’s regional housing authorities.

For the benefit of those who don’t know the difference between CDR Financial Products and A. Gutierrez & Associates, here’s a pocket primer to recent New Mexico political scandals:

* Region III Housing Authority: Last week, The Associated Press reported a state grand jury is investigating the operations of an Albuquerque-based regional housing authority that defaulted on payments for $5 million in bonds it sold to New Mexico. State Attorney General Gary King has been investigating the housing agency, which the State Investment Council in 2006 concluded had misused bond proceeds to pay salaries and benefits, make loans and buy vehicles. The SIC in May 2008 filed a separate civil action against the agency’s former executive director, Vincent “Smiley” Gallegos, and an Albuquerque bond attorney, Robert Strumor, in an effort to recover the $5 million in taxpayer money. That suit is pending.

On Wednesday, State Auditor Hector Balderas released a report saying all five regional housing authorities he audited “were plagued by weak internal controls and a lack of adequate oversight,” and “the blatant disregard for proper policies and procedures created an environment ripe for waste, fraud, and abuse.” Gallegos has denied wrongdoing.

* Vanderbilt Capital Advisors: Another allegation of pay-to-play. Frank Foy, a former chief investment officer of the state Educational Retirement Board, charged in a civil lawsuit unsealed Friday that state officials pressured ERB and the State Investment Council to hire a Chicago company, Vanderbilt Capital Advisors, which had contributed more than $15,000 to Richardson’s presidential campaign. Vanderbilt lost a total of $90 million in state money.
Richardson’s office and other state officials named in the suit denied wrongdoing.

* Secretary of State expenditures: Last week, the Attorney General’s Office confirmed it’s investigating how federal election money was spent under former Secretary of State Rebecca Vigil-Giron. Actually, the investigation was confirmed earlier by a strange news release Friday from the Department of Workforce Solutions, where Vigil-Giron now works. That statement was to deny a rumor that Vigil-Giron had been fired. “Ms. Vigil-Giron informed Secretary Betty Sparrow Doris of a pending Attorney General investigation involving matters not related to her work at the NM Department of Workforce Solutions,” that statement said.

A 2008 federal audit questioned whether Vigil-Giron had properly spent millions of dollars on a voter-education project that included television ads. An Albuquerque advertising company, A. Gutierrez & Associates, received more than $6 million to produce ads, many of them prominently featuring Vigil-Giron, who unsuccessfully ran for Congress last year. State records could substantiate only about $2.6 million of Gutierrez’s costs, the audit determined. Payments by the state to the company exceeded a contracted ceiling by more than $300,000. Vigil-Giron has denied wrongdoing.

* CDR: This is the grand jury investigation that cost Richardson a cabinet position. The federal grand jury in Albuquerque is looking at whether CDR Financial Products was awarded bond work for the state transportation construction projects because of campaign contributions totaling more than $100,000 from CDR and its chief executive officer.

Richardson has denied wrongdoing, and some of his supporters privately say the whole case is a political witch hunt by Republican prosecutors — remember the Justice Department scandals of 2007, some Richardson supporters say — who are out to make the governor look bad.

ANOTHER GRIP FINANCE FIRM INVOLVED WITH GUV PAC

Kudos to Bloomberg -- again. They've uncovered another lobbyist for a firm that was part of the GRIP finance team who played a role in Gov. Bill Richardson's political efforts.

Read the complete Bloomberg story HERE

Fred Duval of Phoenix was a lobbyist for the Swiss USB, one of four banks that split more than $5.1 million of fees for lining up buyers for the New Mexico Finance Authority’s GRIP project bonds sold in 2004. Duval also was listed as a director for Si Se Puede!, the political action committee that paid for the expenses of Richardson and his entourage in Boston at the 2004 DNC.

In the Bloomberg story, Duval denies he had a role in landing the NMFA bond deals for USB. He also said he didn't do anything but lend his name to Richardson's PAC.

Mike Stratton of Denver lobbied for JPMorgan Chase & Co as well as CDR Financial Products in 2004. He became one of Richardson's main political strategists in his presidential bid. I first met Mike in 2005 during a Richardson trip to New Hampshire -- though that was a year and half before he formally launched his campaign.

ROUNDHOUSE ROUNDUP: WE'LL ALWAYS HAVE BOSTON

A version of this was published in The Santa Fe New Mexican
January 8, 2009

Richardson in Boston, 2004

A lot has been written in recent days about the company at the center of a pay-to-play investigation that forced Gov. Bill Richardson’s withdrawal as commerce secretary nominee early this week. But not much has been said about the political action committee that received the bulk of those contributions, the little-known PAC that paid for his expenses at the 2004 Democratic National Convention in Boston.
In case you’ve been on another planet for the past few days, a grand jury in Albuquerque has been looking at a California firm called CDR Financial Products, which did work on the funding of Richardson’s transportation construction program.

Shortly before and shortly after the New Mexico Finance Authority chose CDR for the work, the company and its chief executive contributed a total of $110,000 to Richardson PACs.

The biggest chunk of that was a $75,000 check from CDR on June 18, 2004, to a PAC called ¡Sí, Se Puede! Boston 2004 Inc. Richardson served as chairman of the Democratic Convention that year.

According to reports filed with the Internal Revenue Service, ¡Sí, Se Puede! raised $336,000 from the time it was formed in February 2004 until Nov. 19, 2004 — about four months after the convention — when Novartis Pharmaceuticals Corp. of New Jersey contributed $10,000 to the cause.

Richardson’s then-political director Amanda Cooper was listed as executor director of the PAC. Other directors included David Smoak, a state Judicial Standards commissioner; Fred Duval, a Phoenix consultant; Denver lawyer Ted Trimpa; Washington, D.C., businessman Miguel Lausell; and banker and Richardson crony Guy Riordan.

Yes, that Guy Riordan. In July, a Securities and Exchange Commission administrative law judge recommended Riordan be banned from the securities industry for life for paying bribes to former state Treasurer Michael Montoya. The SEC has not made a final decision in the case, and Riordan has not been charged with any crime. But after Montoya, who has pleaded guilty in a federal kickback case, testified about accepting bribes from Riordan, Richardson donated $44,000 in contributions from Riordan to charity.

CDR was the biggest donor to ¡Sí, Se Puede! Other companies that were part of the team responsible for the state’s transportation bonds — UBS Financial Services, RBC Dain Rauscher and George K. Baum and Company — gave Richardson’s PAC a total of $55,000.

Other large contributions to ¡Sí, Se Puede! include Amgen, a California-based biotechnology company, $25,000; Rancho Viejo, $25,000; Las Campanas, $20,000; AKAL Security, $20,000; Northern Trust Co., Chicago, $10,000; and the G-Tech Corp. of Rhode Island, $10,000.
G-Tech, a company called “baldly sleazy” by Fortune magazine in 1996, ran New Mexico’s lottery from 1996 until November. G-Tech, according to a 2006 study by Santa Fe think tank Think New Mexico, charged this state drastically higher fees than those paid by other states with similarly sized lotteries.

So how did ¡Sí, Se Puede! spend its money?

As makes sense, a large portion of the expenditures was for hotels and airfare. More than 10 members of Richardson’s staff — including his political staff, three press spokesmen and state police officers on his security detail — went. (The state, not the PAC, paid for the police expenses.)

It’s difficult to determine just how much was spent on hotels. Several hotels are listed — Doubletree, Hilton, Hotel Marlowe, Hotel MIT, Hyatt, Ritz Carlton, Sheraton, Wyndham and the “Northeastern dorms.” However in later reports, several of these refunded money to the PAC.

The PAC also paid a limousine company called Lifestyle Transportation International more than $13,000 for convention transportation.

One of the biggest single expenses was $23,000 to Grand Canel, an Irish pub, for a “special event” during the convention.

Mike Contarino — a political science professor at the University of New Hampshire and brother of Richardson’s then Chief of Staff Dave Contarino, was paid a $500 consultant fee. (Mike Contarino later would become a foreign policy adviser for the 2008 Richardson presidential campaign.)

Michael Jacobs, an Albuquerque photographer, was paid $2,419.

State Public Education Secretary Veronica Garcia was paid $985 for “convention related travel and per diem spending.” Garcia on Wednesday explained she had been asked by the John Kerry campaign to speak about education at the convention. Her ticket was expensive, she said, because she’d booked a flight for later in the week but was told by the campaign they’d rescheduled her speech for the next day. “I flew in, gave my speech and flew back the next day,” Garcia said.

In late 2004 and even into 2005, the PAC still was paying bills. But there was plenty of money left over. ¡Sí, Se Puede! ended up donating $87,827 to the Democratic Governor’s Association, of which Richardson was elected chairman in December 2004 and which would be the conduit for much of Richardson’s travel expenses for the next two years.

THE RUNAROUND

Looks like Trip Jennings of The New Mexico Independent had a frustrating day trying to corner the governor for some questions.

We feel your pain, Trip.

CLICK HERE

CDR SAGA CONTINUES

I did a story about the Justice Department subpoenas of records from University of New Mexico bond sales, which involved CDR Financial Products. These bond transactions, the first ones at least, took place before Bill Richardson was governor. See the story HERE.

The story also mentions that Albuquerque lawyer Paul Kennedy, a former state Supreme Court justice, is counseling former NM Finance Authority director David Harris in the grand jury proceedings. Kennedy, of course, said he couldn't comment on the case itself.

Though the national media furor is dying down somewhat, Bloomberg still is on the story. They report today that Richardson's former chief of staff Dave Contarino's name has come up in the questioning of at least one witness. It's been rumored that Contarino is one of the bigger fish the grand jury is looking at. I tried unsuccessfully to get ahold of the lawyer said to be representing Contarino yesterday but got no reply.

Contarino himself did email a comment to Bloomberg.

“As chief of staff and co-chairman of the Governor’s Finance
Council, it was my job to be involved in GRIP and many of the administration’s economic and financial initiatives,” Contarino said in an e-mail statement. “In all of my actions, I acted appropriately and I am confident that the investigation will bear out that fact.”

It's getting more interesting.

DULL SCANDALS?

Naturally the Richardson withdrawal is all over the Web. In the New York Times, I learned that the state offices here are made of adobe. T.J. Sullivan, who took photos of the CDR buildings past and present for The New Mexican yesterday, even blogrolled my story on the Los Angeles MBC blog.

But another post on that site caught my eye and made me chuckle. Sara K. Smith, who sometimes writes for Wonkette, posted a piece headlined "Dems Usher in Era of Dull Scandals."

Of our own "dull scandal" (which hasn't been that dull for us local yokels), she writes,

... the portly and affable Bill Richardson, who couldn't be Secretary of State because he would have been murdered, personally, by the Clintons, so instead he settled for Commerce Secretary before he got roped into a grand jury investigation. Apparently some brilliant financial company that advised Jefferson County, Alabama into near-bankruptcy was also hired to work its magic on the state of New Mexico after it donated 100 grand to various political action committees formed by Bill Richardson.

So now Richardson has said to Barack Obama, "Pls do not consider me for Commerce, as I have this little grand jury problem to deal with." This is really too bad, because Bill Richardson spoke Spanish! Also he was very smart, and experienced in talking with nasty dictators. Now Obama will have to find some other sucker to help him revive the economy and control the weather.

As for Wonkette, itself:

There’s some corruption in New Mexico! (Allegedly.) A California business got a contract maybe through some agency (?) in New Mexico, and this is tied to the Governor’s Department, and Bill Richardson is (still) the governor of N.M., so now he is bowing out of the Commerce Department cabinet post because of the Great Cloud of Scandal, which could get its Taint on Big Bill, and that’s it for Hispanics in Politics, the end. This is all Rod Blagojevich’s fault!

LOOKING AT CDR

I did a story about CDR Financial Products, the company at the center of the grand jury investigation into the Richardson administration, for today's paper (CLICK HERE). I leaned heavily on a 2006 profile in Bloomberg. Also I quote a new article at OpenSecrets.org that talks about CDR's campaign contributions to Bill Richardson and other politicians..

One fun part of working on this story Monday was talking with former New Mexican reporter T.J. Sullivan, who lives near CDR's old headquarters in Beverly Hills and offered to photograph the building. Thanks to T.J. I learned that the firm actually has moved from the building in Beverly Hills -- the one that was raided by the FBI a couple of years ago -- and relocated to a building in a less fashinable section of Wilshire Boulevard a few miles away. The old address is still on the Web site though. And for some reason the paper ran one of T.J.'s shots of the old building.

Sometime Monday evening, after I'd checked out the CDR Website, the company published this letter there about the New Mexico investigation.

Also, check out Kate Nash's story, which includes an interview with Lt. Gov. Diane Denish and coverage of the governor's press conference Monday morning.