David Contarino says he is confident that investigation will prove he acted appropriately
Federal prosecutors are asking whether David Contarino, a man Bill Richardson once described as the “strategic mind” of his administration and “my most senior and trusted aide,” was involved in the alleged pay-to-play scheme that derailed the governor’s nomination to be commerce secretary days ago, Bloomberg.com is reporting.
One unnamed witness who testified before the federal grand jury investigating the allegations was quoted by the news organization as saying he was asked if Contarino, Richardson’s former chief of staff, ordered officials with the New Mexico Finance Authority to hire CDR Financial Products for a lucrative state contract. And “another personal familiar with the investigation” was quoted as saying that Contarino “is a subject of the inquiry and that prosecutors are looking at whether he solicited contributions from firms that worked on finance authority bond deals.”
The Bloomberg.com report threatens to increase the level of scandal surrounding Richardson, who has leaned heavily on Contarino to develop policy and manage his political and governmental staffs. In addition to leading Richardson’s state government office for three years, Contarino ran both of Richardson’s campaigns for governor and his unsuccessful run for president last year.
It was when Contarino left the chief of staff job in 2006 to work on Richardson’s re-election campaign that Richardson called him his most trusted aide.
It was already known publicly that the ongoing federal investigation centers around whether any staffers in Richardson’s office engaged in pay-to-play politics on the CDR deal, but none had been publicly named before the Bloomberg.com article was published shortly after 10 p.m. New Mexico time on Tuesday.
Spokesmen for Richardson did not immediately respond to e-mail requests for comment. Richardson spokesman Gilbert Gallegos refused to comment to Bloomberg.com, but Contarino provided this statement via e-mail to the news organization:
“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,” he said. “In all of my actions, I acted appropriately and I am confident that the investigation will bear out that fact.”
GRIP, or Governor Richardson’s Investment Partnership, is the state contract at the center of the probe. CDR was paid almost $1.5 million in 2004 advising the finance authority on interest-rate swaps and restructuring escrow funds for $1.6 billion in GRIP bonds. Meanwhile, in 2003 and 2004, CDR Financial gave $75,000 to Richardson’s political action committee Si Se Puede!, and the company’s head, David Rubin, gave $25,000 to Moving America Forward, another Richardson PAC.
‘He never ordered me to do anything with CDR’
Ed Romero, a former ambassador to Spain who was finance chairman for Richardson’s presidential campaign, was quoted by Bloomberg.com as calling Contarino a “very effective political professional” and said he would be surprised if Contarino did anything improper.
Bill Sisneros, who has headed the finance authority since about three months after CDR was hired and was not involved in that decision, told Bloomberg.com that Contarino never told him to choose CDR for other work.
“Dave and I, we’ve talked about CDR but he never ordered me to do anything with CDR,” the article quoted Sisneros as saying. “I’ve never spoken to Bill Richardson about CDR.”
Contarino has remained involved in Richardson’s political activities since the governor’s presidential campaign ended. In August, a fundraiser Richardson hosted to help Hillary Clinton retire her presidential campaign’s debt was held at Contarino’s Santa Fe office.
Scrutiny increases
The news about Contarino came in one of several Tuesday reports that indicated an increased level of scrutiny on Richardson and President-elect Barack Obama following the national embarrassment caused when Richardson withdrew his nomination to be commerce secretary over the weekend because of the ongoing probe.
ABC News was the first to report on Tuesday that David Rubin, head of CDR, had also contributed more than $30,000 to the Obama campaign and a joint Obama-Democratic National Committee fund formed to help elect Obama. Using the investigation of the Richardson administration as a springboard, the Pittsburg Tribune-Review published an article about that state’s governor, Ed Rendell, receiving $35,000 in contributions from Rubin, whose company has made nearly $600,000 from a contract with that state.
And Bloomberg.com reported in a separate article published earlier Tuesday that one of Richardson’s senior political advisers, Denver political strategist Michael Stratton, lobbied the state of New Mexico on behalf of J.P. Morgan, which won a contract related to the bond deals that are the subject of the federal investigation into CDR. Stratton was paid $269,000 by J.P. Morgan for its work on behalf of that company.
J.P. Morgan officials have already testified before the grand jury in the CDR case.
The later Bloomberg.com article about Contarino quoted Sisneros as saying that Stratton also lobbied the finance authority on behalf of CDR. Stratton, a senior adviser and bundler for Richardson’s presidential campaign, declined to comment to Bloomberg.com.
Stratton has also remained active in Richardson’s political activities since the governor’s presidential campaign ended. In December, he co-hosted a fundraiser in Washington to help Richardson retire his campaign’s debt.
‘Putting this matter to rest’
Meanwhile, Richardson has scheduled several public events for today and Thursday in Albuquerque and Santa Fe unrelated to the federal investigation as he attempts to move past the scandal. And, as reported by the Albuquerque Journal, Richardson “appears to have embarked on a national damage-control campaign via e-mails to supporters of his own yearlong presidential bid.”
“Thank you for your past and continued support. I look forward to putting this matter to rest and in the meantime I am preparing for the upcoming New Mexico legislative session,” states a Monday e-mail from Richardson to supporters. The e-mail also states that it was paid for by Richardson’s now-defunct presidential campaign, which has still not retired all of its debt.
A prior version of this posting incorrectly stated that the Clinton fundraiser was held at Contarino’s home.