New Mexico Gov. Bill Richardson (D) has withdrawn from his nomination as Dept. of Commerce Secretary in President-elect Barack Obama’s cabinet. In a Jan. 5 news conference, Richardson stated that an ongoing federal grand jury investigation into a state contract related to Governor Richardson’s Investment Partnership (GRIP) won by Beverly Hills, Calif.-based CDR Financial Products “would have forced an untenable delay in the confirmation process.”
The investigation centers around a $1.48-million consulting contract CDR won in 2004 with the New Mexico Finance Authority, a state instrumentality that finances infrastructure projects by providing low-cost funds and technical assistance. CDR was part of a team of financial services firms that advised NMFA on interest rate swaps and refinancing of funds related to the $1.6 billion GRIP bond program, which was approved by the New Mexico legislature in 2003 to fund numerous highway and transportation projects. The $400 million Rail Runner commuter train, which began passenger service last month on its second phase connecting Albuquerque and Santa Fe, was one such project funded through GRIP.
CDR made contributions to several Political Action Committees associated with Richardson right around the same time it won the NMFA contract. Several of Richardson’s state cabinet members sit on the NMFA board.
Richardson denies any ‘pay-for-play’ arrangements, saying that the CDR contract “was thoroughly scrutinized through a rigorous procurement process.”
“I want to emphasize that I acted properly and my administration acted appropriately,” he says. “A fair and impartial review of the facts will bear that out.”
David Rubin, CEO of CDR, says in a statement that his firm underwent a rigorous vetting process and “has never practiced pay-for-play, on any playing field where we do business.”