State financial advisor and Richardson donor is under investigation by U.S. Justice Department

The president of a brokerage firm that is under investigation by federal prosecutors gave $100,000 to political action committees formed by Gov. Bill Richardson, and his firm made almost $1 million advising the state in 2004, the financial Web site Bloomberg.com reported today.

A Richardson spokesman told the news organization that the governor had no role in the selection of CDR Financial Products, which was selected through a competitive bidding process. A spokesman for the company said its president David Rubin, who gave the gifts to Richardson’s PACs in 2003 and 2004, had no comment.

CDR was paid $951,566 in 2004 to advise the New Mexico Finance Authority on $420 million of interest-rate swaps, Bloomberg reported.

Federal prosecutors are trying to determine whether banks and brokers conspired to fix prices on bonds bought by municipalities to invest the proceeds that weren’t immediately spent on schools and sewers, Bloomberg reported. The Justice Department has subpoenaed more than a dozen banks and insurers and raided three brokers – one of them Rubin’s company – as part of the probe.

The article does not implicate Richardson or the State of New Mexico in any way in the investigation. A Richardson spokesman told me late today that the office had no comment beyond what was reported by Bloomberg.

The investigation, according to Bloomberg, stems from an IRS probe that found dozens of municipal bond deals that “robbed federal taxpayers of more than $100 million.”