Gov. Bill Richardson (Photo by Heath Haussamen)
The federal investigation into allegations of pay to play in one state agency may be over, but that doesn’t mean Gov. Bill Richardson is fully in the clear, a top New Mexico political analyst said today.
Albuquerque pollster and analyst Brian Sanderoff pointed out in an interview that federal and state investigators are still looking into allegations in the investment scandal that started in New York and has spread to New Mexico and other states. That case, which is separate from the probe that has ended, involves some prominent Richardson friends and donors.
The probe that we learned today has ended — the federal investigation into allegations that CDR Financial Products received a lucrative state investment contract from the New Mexico Finance Authority in exchange for campaign contributions to Richardson and two political action committees he started — cost the governor the commerce secretary job in Washington. But even as President Barack Obama accepted Richardson’s withdrawal of his nomination for that post in January, the president said he looked forward to Richardson’s “future service to our country and in my administration.”
Richardson said at the time that he would continue serving as governor “for now” and was “eager to serve in the future in any way (Obama) deems useful.”
Sanderoff said today that the end of the CDR case probably isn’t enough to convince the president to offer Richardson a cabinet-level job.
“My guess is things will have to settle down awhile before we’ll be seeing any talk of cabinet-level positions,” he said. “As long as there’s talk of other investigations, I think the Obama administration will be shy.”
“But if some clear declaration is made by the justice department at some point that the governor has been cleared (of wrongdoing in any case),” Sanderoff said, “then that would be another story.”
In the investment scandal, the founder a company that was once New Mexico’s investment adviser is under indictment in New York in a pay-to-play investigation there. Among the allegations is that the founder of Aldus Equity, Saul Meyer, helped the son of New York’s then-state comptroller win an investment contract in New Mexico in exchange for his company getting increased business in New York.
In addition, Richardson has taken $20,000 in campaign contributions from another man tied to the scandal who is reportedly negotiating a settlement in New York to avoid criminal charges.
‘The governor is focused on New Mexico’
Richardson hasn’t commented on today’s news that he and others won’t be charged in the CDR case. He’s in Cuba on a trade mission and won’t return until Friday. His office has not responded to a request for comment.
But Josh Geise, executive director of the Democratic Party of New Mexico, wrote in an e-mail that, even though the CDR probe has ended, he believes Richardson’s focus will remain in New Mexico, not Washington.
“The governor is focused on New Mexico and the work we need to do here to balance the budget and get the economy moving,” Geise wrote. “As he has recently with the North Koreans and Cuba, I’m certain he will do what he can to help the country and the Obama administration — as governor.”
Regardless, today’s news is likely a relief for a governor who has had the CDR probe hanging over his head for a year. Media outlets first reported in late August 2008 that federal investigators were looking into the CDR situation, and intense scrutiny has continued ever since.
After Richardson withdrew his nomination to be commerce secretary, his poll numbers plummeted (they later rebounded a bit, but have not returned to previous levels). He also took a lower profile on the national stage, and was one of two governors to skip a February meeting of the National Governor’s Association.
But in recent months, the longtime global troubleshooter has been more visible. In May, he appeared on national TV to talk about two journalists being held in North Korea. Earlier this month, he was involved in discussions surrounding former President Bill Clinton’s trip to North Korea to secure the release of those journalists, and then he was all over TV talking about it.
Now he’s in Cuba, where he’s promoting trade between the state and that nation.
The pending investment scandal
But, as Sanderoff said, there are some pending situations that could keep Richardson in New Mexico, at least for now. Federal prosecutors have subpoenaed two state agencies in an ongoing investigation into investment practices in New Mexico. Of interest, according to a federal subpoena released in June, is Texas-based Aldus Equity, New Mexico’s former investment adviser. Meyer, its founder, has been indicted in an ongoing New York investigation into pay-to-play allegations.
Among the allegations in the New York inquiry is that Meyer helped the son of the New York state comptroller, Alan Hevesi, win a lucrative contract in New Mexico for a firm he was representing in return for Aldus’ increased business in New York, according to the criminal complaint. At the time, the comptroller’s son, Dan Hevesi, was acting as a third-party marketer.
Third-party marketers, once obscure figures in the investment world who act as matchmakers between private equity and hedge funds and states looking for a good return on their money, have grabbed headlines in New Mexico in recent months. That’s due to the millions of dollars paid out to them, including $22 million to Marc Correra.
Correra is the son of a friend and prominent fundraiser for Richardson.
Richardson has one other direct tie to the investment scandal: Steven Rattner, the former head of Obama’s auto-bailout program, gave $5,000 to Richardson’s 2002 gubernatorial campaign and $15,000 to Richardson’s 2006 re-election bid.
Richardson heads the State Investment Council (SIC) which, in 2005, voted to invest $20 million with Quadrangle Group LLC. At the time of the 2002 and 2006 campaign contributions, Rattner was a managing principle in the company, which he left in February of this year to take the auto-bailout job.
Rattner recently left the auto-bailout job and is reportedly negotiating a settlement with the New York attorney general in order to avoid criminal charges in that state.
Richardson and his administration have taken strong action in response to the investment scandal, banning the use of third-party marketers by investment companies seeking to do business in New Mexico and compiling and publicly releasing information about third-party marketers who have been employed by those companies.
‘Is it really over?’
Also pending is the lawsuit filed by Frank Foy, a former investment officer for the New Mexico Educational Retirement Board, alleging pay to play in a deal in which the state lost $90 million on investments made in exchange for a little more than $15,000 in contributions to Richardson’s campaign.
Richardson and administration officials have strongly denied those allegations and accused Foy of being on a political witch hunt.
Regardless, the pending situations led Sanderoff to ask what may be an obvious question:
“Is it really over?”
The New Mexico Independent’s Trip Jennings contributed to this report.