{"id":3647,"date":"2008-08-29T17:22:00","date_gmt":"2008-08-29T23:22:00","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/2008\/08\/state-is-cooperating-with-federal-probe-of-grip-bonds\/"},"modified":"2008-08-29T17:22:00","modified_gmt":"2008-08-29T23:22:00","slug":"state-is-cooperating-with-federal-probe-of-grip-bonds","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2008\/08\/state-is-cooperating-with-federal-probe-of-grip-bonds\/","title":{"rendered":"State is cooperating with federal probe of GRIP bonds"},"content":{"rendered":"

\"\"<\/a>The New Mexico Finance Authority<\/a> says it\u2019s \u201ccooperating fully\u201d with federal investigators who are looking into the dealings between the state and a California<\/st1:place><\/st1:state> firm that was paid almost $1 million under a state contract related to a $1.6 billion transportation program. <\/p>\n

<\/o:p><\/p>\n

Investigators are looking into at least two financial contributions the company involved, CDR Financial Products<\/a>, made to political committees formed by Gov. Bill Richardson<\/a> around the time it won the state contract related to Governor Richardson\u2019s Investment Partnership<\/a> (GRIP) in 2004. The situation was first reported on this morning by the Albuquerque Journal<\/a>.<\/p>\n

<\/o:p><\/p>\n

The NMFA announced its cooperation with federal authorities in a statement sent late this afternoon. The news release confirmed that the investigation relates to \u201cthe 2004 issuance of bonds for the GRIP transportation program\u201d and states that NMFA will make no further comments until the probe is complete.<\/p>\n

<\/o:p><\/p>\n

The GRIP project is a massive undertaking first approved by the Legislature in 2003 to improve roads around the state and build the Rail Runner. According to a 2006 Bloomberg.com article<\/a>, CDR Financial was paid $951,566 \u201cadvising the New Mexico Finance Authority on $420 million of interest-rate swaps in 2004\u201d related to the GRIP project.<\/p>\n

<\/o:p><\/p>\n

Meanwhile, in 2003 and 2004 CDR Financial gave $75,000 to Richardson<\/st1:city><\/st1:place>\u2019s political action committee Si Se Puede!, and the company\u2019s head, David Rubin, gave $25,000 to Moving America Forward, another Richardson PAC.<\/p>\n

<\/o:p><\/p>\n

Richardson<\/st1:place><\/st1:city> formed Si Se Puede! to pay travel expenses for him and staffers who were attending the 2004 Democratic National Convention, which he chaired. Moving America Forward was a voter-registration group.<\/p>\n

<\/o:p><\/p>\n

Si Se Puede!, according to a 2004 Associated Press article, raised $191,000. Of that, $130,000 — including the $75,000 from CDR Financial — came from companies working on the GRIP bonds.<\/p>\n

<\/o:p><\/p>\n

Governor\u2019s office won\u2019t answer specific questions<\/span><\/p>\n

<\/o:p><\/p>\n

Richardson<\/st1:place><\/st1:city> spokesman Gilbert Gallegos refused today to answer specific questions about the investigation, but released this statement:<\/p>\n

<\/o:p><\/p>\n

\u201cThe governor\u2019s office is aware of questions surrounding some financial transactions at the New Mexico Finance Authority,\u201d he said. \u201cWe expect any state agency that is approached with questions to cooperate with federal officials.\u201d<\/p>\n

<\/o:p><\/p>\n

During the special session that recently ended, the Legislature appropriated an additional $200 million to help finish outstanding GRIP projects. Richardson<\/st1:place><\/st1:city> hasn\u2019t signed the bill, and Gallegos refused to comment on whether, in light of the investigation, the governor plans to sign it.<\/p>\n

<\/o:p><\/p>\n

Spokesmen for the U.S. Attorney\u2019s Office and FBI refused to comment on the investigation.<\/p>\n

<\/o:p><\/p>\n

David Harris, who ran NMFA until mid-2004, confirmed to the Journal that he was interviewed by the FBI. His attorney, Paul Kennedy of Albuquerque<\/st1:place><\/st1:city>, told the Journal that Harris \u201cdid nothing wrong\u201d and welcomes a hearing that will vindicate him.<\/p>\n

<\/o:p><\/p>\n

The Journal also quoted William Fulginiti, executive director of the New Mexico Municipal League and member of the NMFA board, who said he has been interviewed in the last week by FBI agents working on the case. He said it was a \u201cfairly quick interview. They just asked some basic questions about the procedures in selecting vendors.\u201d<\/p>\n

<\/o:p><\/p>\n

Richardson<\/st1:place><\/st1:city>\u2019s office told Bloomberg in 2006 that the governor had no role in the hiring of CDR Financial, which was selected through a competitive bidding process. The company\u2019s spokesman told the Journal that all contributions were disclosed at the time they were made, and said he had no further comment \u201cabout the status of any investigation, pending or closed.\u201d<\/p>\n

<\/o:p><\/p>\n

A company under scrutiny<\/span><\/p>\n

<\/o:p><\/p>\n

In a separate case, CDR Financial has been under investigation for almost two years, along with dozens of other banks and financial companies, in relation to an IRS probe that found dozens of municipal bond deals that allegedly \u201crobbed federal taxpayers out of more than $100 million,\u201d 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\u2019t immediately spent.<\/p>\n

<\/o:p><\/p>\n

The Journal reported that, earlier this year, \u201clocal governments in California<\/st1:state>, the city of Chicago<\/st1:place><\/st1:city> and others filed antitrust lawsuits naming 37 banks and financial companies, including CDR, over allegations of bid rigging and fee fixing in local government bonds.\u201d<\/p>\n

<\/o:p><\/p>\n

In addition, the Securities and Exchange Commission sanctioned CDR Financial<\/a> in 2007 for work it did on fee arrangements on government bonds in Florida<\/st1:place><\/st1:state> that put the tax-free status of those bonds at risk. The company admitted no wrongdoing but pledged to not violate SEC rules thereafter.<\/p>\n

<\/o:p><\/p>\n

Trip Jennings<\/st1:place><\/st1:city> of the New Mexico Independent<\/a> contributed to this article.<\/p>\n","protected":false},"excerpt":{"rendered":"

The New Mexico Finance Authority says it\u2019s \u201ccooperating fully\u201d with federal investigators who are looking into the dealings between the state and a California firm that was paid almost $1 million under a state contract related to a $1.6 billion transportation program. Investigators are looking into at least two financial contributions the company involved, CDR […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3647","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/3647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=3647"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/3647\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=3647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=3647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=3647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}