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Breaking News: Gov. Bill Richardson cleared in federal probe

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By Carol A. Clark

While no official statement has been issued, news spread at lightening speed overnight of Gov. Bill Richardson possibly being cleared in an investigation that’s dogged him for a solid year.

Richardson and former high-ranking members of his administration won’t be criminally charged,  said the Associated Press citing a person familiar with the investigation.

The federal investigation has focused on pay-to-play allegations involving California-based CDR Financial Products, one of the governor’s large political donors,

“I personally am not surprised,” said Los Alamos Democratic Party Chair Cathy Chapman during an interview this morning. “This is exactly what I expected to happen,” she said.

Chapman explained that similar allegations surfaced against the governor several years ago.

“They decided not to pursue it because it had no grounds so I was surprised to see the issue come back up,” Chapman said. “I’ve met Gov. Richardson on occasion and he’s warm and friendly. He asked me if our local party had enough money to cover expenses because the state party sometimes helps local parties. I told him we have enough to cover expenses because our members are very supportive in Los Alamos. I really appreciate that he was concerned about us and asked the question.”

Chapman described feeling a sense of some relief in hearing the news that Richardson is said to be cleared in the investigation.

“I just wish the investigation had concluded sooner,” she said.

A federal grand jury began the investigation in 2008 into a possible pay-to-play scheme in which lucrative work on state bond deals went to a Richardson donor. The probe derailed Richardson’s appointment as commerce secretary in President Barack Obama’s administration.

Richardson withdrew his nomination in January, saying the investigation would have delayed his confirmation although he said he expected to be cleared.

The decision not to pursue indictments was made by top Justice Department officials, according to a person familiar with the investigation, who asked not to be identified because federal officials had not disclosed results of the probe.

“It’s over. There’s nothing. It was killed in Washington,” the person told The Associated Press.

Richardson and members of his staff are in Cuba this week on a trade mission.

Richardson spokesman Gilbert Gallegos didn’t immediately respond to requests seeking confirmation that no charges were expected from the federal investigation.

A spokesman for the U.S. Attorney’s office in Albuquerque said he had no information about the Justice Department’s decision.

Federal investigators reviewed whether political contributions influenced the selection of CDR as an adviser on state transportation bond transactions, and whether Richardson’s former chief of staff, David Contarino, played a role in hiring of CDR.

Prosecutors also subpoened records of another former Richardson aide, David Harris and one of the governor’s close political advisers, Michael Stratton.

Harris served as Richardson’s deputy chief of staff and then became executive director of the New Mexico Finance Authority, which selected CDR for the bond financing work.

Stratton, a Denver-based political consultant, served as a senior adviser to Richardson’s 2008 presidential campaign. He also was a consultant to CDR and another financial firm when the Finance Authority put together the bond deals in 2004. The state work generated almost $1.5 million in fees for CDR in 2004-2005.

CDR Chief Executive David Rubin and his firm contributed $110,000 to Richardson political committees in 2003-2005. The largest of those contributions, $75,000, was made less than a week before CDR was selected in June 2004 by the Finance Authority to handle the reinvestment of idle bond proceeds. The firm earned $443,000 in fees for its reinvestment work.

CDR received more than $1 million in fees in May 2004 for serving as a financial adviser on interest rate swaps for the transportation bond issues and as the manager of bond proceeds held in escrow.

The bonds financed a $1.6 billion state transportation program that was called GRIP (Gov. Richardson’s Investment Partnership).

The Associated Press contributed to this story.

Contact Carol A. Clark at lanews@lamonitor.com or 505-662-4185 ext. 25. Read her newsblog at www.newsextras.wordpress.com.