I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Did New Mexico overpay for CDR’s services?
It has been suggested in a news report that New Mexico overpaid CDR Financial Products Inc. for its services on complex financial transactions.
How CDR came by the work it did for the state, as many know by now, is the focus of a federal investigation. Specifically, prosecutors are investigating how a lucrative state contract to the California company was awarded, and if big contributions it made to political action committees formed by Gov. Bill Richardson played a part.
It is difficult for non-experts to assess if the state overpaid for something so arcane, but here is an example of overpayment that gives one pause. It comes from Bloomberg News.
The authors report:
“Between the timing of those contributions, CDR made $951,566 advising the New Mexico Finance Authority on $420 million of interest rate swaps.
“The fees New Mexico paid CDR were more than double the $400,000 that New York City paid to its derivatives adviser, Investment Management Advisory Group Inc., in 2004. That year, New York City executed $900 million of the contracts.”