Regional
10:26 am
Fri August 28, 2009

Report: Richardson To Be Cleared

New Mexico – A dark cloud over Gov. Bill Richardson's political future has lifted after the federal government's decision against indictments in a pay-to-play investigation that prompted the governor to withdraw his nomination as U.S. commerce secretary earlier this year.

Political analysts said the yearlong probe's end could even revive Richardson's chances of finding a place in President Barack Obama's administration in the future. The governor's second term expires at the end of 2010 and he can't seek re-election.

"The cloud over his head has dissipated," Larry Sabato, director of the University of Virginia's Center for Politics, said Thursday. "The Land of Enchantment is the land of second chances now for Bill Richardson."

Norman Ornstein, a resident scholar with the American Enterprise Institute, called the government's decision, eight months after Richardson withdrew as the commerce nominee, a major vindication for the Democratic governor.

"Whenever something like this happens, when you accept a position and then you withdraw ... it gets suspicions up and tongues wagging that there is a lot more there than they're talking about. This vindicates him," Ornstein said.

The Democratic governor and former high-ranking members of his administration won't be criminally charged in an investigation of how lucrative state bond work went to one of the governor's large political donors, according to two people familiar with the case. The decision not to seek indictments was made by Justice Department officials in Washington, they said, speaking on condition they not be identified because prosecutors had not disclosed results of the probe.

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

A department spokesman declined to comment on the case and whether Attorney General Eric Holder played a role in deciding not to pursue charges.

The agency's silence drew criticism from New Mexico Republican Party chairman Harvey Yates Jr., who said Holder should provide "transparent and honest answers" about who was responsible for the decision to end the investigation without indictments.

A spokesman for Richardson, Gilbert Gallegos, said in a statement Thursday that "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."

Gallegos said Richardson was "gratified that this year-long investigation has ended with the vindication of his administration" and that "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."

Richardson took office as governor in 2003, having served as a congressman from New Mexico, a roving diplomatic troubleshooter and as President Bill Clinton's energy secretary and U.N. ambassador.

Recently, Richardson has returned to the diplomatic limelight. He met with a delegation of North Koreans earlier this month in Santa Fe and the governor was in Cuba this week for a trade mission.

The U.S. attorney office in New Mexico began an investigation last year into the hiring of a Richardson political donor, Beverly Hills-based CDR Financial Products Inc., as a financial adviser on state transportation bond deals. 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 New Mexico Finance Authority to handle the reinvestment of idle bond proceeds.

Investigators reviewed whether Richardson's former chief of staff, David Contarino, played a role in the hiring of CDR. A grand jury subpoenaed records from the governor's office about CDR and former Richardson aide David Harris and Mike Stratton, a political adviser.

Harris served as Richardson's deputy chief of staff and then became executive director of the 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 and was a consultant to CDR and another financial firm when the state put together the transportation bond deals in 2004.

Contarino and Stratton did not immediately respond to telephone messages seeking comment. Harris said he had been advised by his attorney not to make a statement until receiving a notice from prosecutors.

However, federal prosecutors typically do not publicly announce when an investigation ends because it's always possible that new evidence could be found later and a case might be reopened.

In withdrawing his nomination as commerce secretary in January, Richardson said the grand jury investigation would have delayed confirmation hearings, keeping him from quickly filling the cabinet position.

Even with no indictments in the bond financing case, the Richardson administration continues to face pay-to-play allegations in a whistleblower lawsuit brought in state court.

A former chief investment officer for the state's educational retirement program alleges that political considerations influenced state investment decisions. Contarino and other Richardson appointees are named as defendants in the lawsuit. They say there was no wrongdoing.

Federal agents also have questioned New Mexico investment and pension agency staff about a financial adviser entangled in a New York state pension fund scandal and a federal grand jury has subpoenaed documents related to third-party placement agents on New Mexico investments.

The son of a Richardson political supporter earned nearly $22 million in fees for helping money management firms win state investments. Officials with the State Investment Council and the educational pension program told legislators this week that the agencies are not the subject of the federal investigation.

Copyright 2009 The Associated Press. All rights reserved.