It was a friendly audience, one composed of state and local officials, with a few regular people mixed in, the kind of audience that Richardson clearly enjoys. And it showed. The governor cracked jokes, he told funny stories, he even ribbed Rio Rancho Mayor Thomas Swisstack about stealing away James Jimenez, a very smart, competent guy who was hired to be city manager after having replaced Dave Contarino as the governor’s chief of staff.

“You paid him better, I hear you treat him better and that’s unacceptable,” he said to Swisstack. The crowd, packed like sardines into a tent to guard against raging winds, laughed. But the governor wasn’t done. When everyone started looking around for Jimenez, Richardson cracked, “James is a little guy, so you can’t see him.” Another huge laugh.

But that line wasn’t the most popular with the crowd.

No, the line that killed was topical, timely, and made Richardson appear as if he hadn’t a care in the world.

It came as Richardson was touting the more than 1,300 jobs Hewlett Packard will bring to New Mexico. Which, of course, is good news for the state’s chief executive, who hasn’t had much to celebrate since Sunday, when he withdrew from President-elect Barack Obama’s Cabinet because of a federal investigation that now appears to include his ex-chief of staff, Contarino.

“And I am told, but I’m not going to say it here,” Richardson said, “that maybe if we behave, they’ll bring more jobs.”

People began to laugh.

“I guess they are kind of looking at me there,” Richardson quipped to an explosion of laughter. The governor tried to fight back a big smile and continued. “This is great news,” he said. Then almost as if an aside, he added, “It’s not so funny.”

Haven't seen a smile like that in a while, have we?

Gov. Bill Richardson’s former chief of staff, David Contarino, is a subject of the federal investigation into whether Richardson pressured the New Mexico Finance Authority to give a lucrative contract to a California firm that contributed significantly to Richardson PACs, according to Bloomberg.

That story broke late last night and we’ve got our take, too. But for now, here’s the ugly part: “[A] person familiar with the investigation said Contarino, 47, 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.”

Former NMFA director of intergovernmental relations Carlos Romero was interviewed by the FBI and has given testimony to the grand jury in the GRIPgate investigation (Yes, we’re going with GRIPgate!), KRQE reports. Romero is an associate vice president at UNM, as is his former NMFA boss, David Harris, who was also interviewed by the FBI.

Another person who has talked to the FBI in GRIPgate (get used to it, people!) is Colorado state Sen. Chris Romer. Romer told the Denver Post yesterday that he talked to the FBI voluntarily last fall. How is Romer connected? Romer was the lead banker at JPMorgan, the financial services firm that underwrote the majority of the $1.6 billion in bonds for Richardson’s GRIP transportation projects. Read more on the Colorado connection here.

That’s the big stuff for now. Keep reading and we’ll be updating all day!

Don't forget to duck!

In all the madness of GRIPgate, we barely had time yesterday to look over a new report from the Pew Research Center. The report compares public opinion from surveys done eight years ago, just after George W. Bush’s election, and now. (Spoiler alert!) The results show that a mere 13 percent of Americans are now satisfied with the way things are going in the country, compared with 55 percent who said the same thing as Clinton was leaving office.

And now for a chart. Because we know you love charts as much as we do!

It's as if President Bush has cooties or something.

Although Americans do seem to think the president wadded up our economy and used it for Kleenex, they have not all become cynics. No, no. Read on:

Still, if anything, Americans’ trademark optimism has been strengthened by adversity. A 56 percent majority expects their own family finances to improve over the coming year — essentially the same proportion who thought that eight years ago, and fully 68 percent agree that Americans can always solve their problems — a sizable increase from the 59% who espoused that view in the fall of 2000. And despite the headline-making business scandals of the period — from Enron to Madoff — the public remains split (47 percent to 43 percent) on whether government regulation is needed to protect the public interest or usually does more harm than good, a divide essentially unchanged since the turn of the century.

See? It’s a sad story, but it’s got a happy ending! For more charts and graphs and numbers, see the full report here.

As we’ve mentioned, CDR received a lucrative contract with NMFA, despite the fact that it did not rank highest among the firms that responded to the agency’s request for proposals. Smith Barney/Ryan Labs scored highest, with 99 points, but the staff evaluation team of former NMFA chief financial officer Keith Mellor and controller Joe Gosline, recommended that the services be split between the two companies.

CDR got the SWAP and GIC advisement and brokerage work, while Smith Barney/Ryan Labs got a contract to provide other investment advisory services. The interesting part is that CDR did not receive a contract, but a “contingency arrangement,” in which the company would be used only for SWAP/GIC services only after receiving board approval.

Here’s the memo from Mellor that spells it all out:

Why do we care? Because JPMorgan was the firm that underwrote most of the bonds sold to finance Richardson’s GRIP transportation projects. And maybe this is just too many people in bed together? This is how it all plays out:

JPMorgan paid Michael Stratton, president of Denver-based Stratton & Associates, $269,000 in 2003 and 2004 to help win public finance business relating to “state, county, and local government and corporate entities” in New Mexico, according to records filed with the Municipal Securities Rulemaking Board. Stratton’s firm gave $2,000 to Richardson’s first gubernatorial bid in 2002, and Stratton advised the governor on his 2008 presidential campaign, according to New Mexico records and the firm’s Web site.

Stratton made another $160,000 from 2005 and 2006, working for Richardson when he was head of the Democratic Governors Association, the story says.

Oh, but there’s more!

JPMorgan’s lead banker on the deals was Chris Romer, 49, whose father was governor of Colorado from 1987 until 1999. On Aug. 21, JPMorgan told regulators about an investigation being conducted by the U.S. Attorney for New Mexico involving the municipal securities business, according to Romer’s brokerage records with the Financial Industry Regulatory Authority.

CDR’s [owner David] Rubin and three other employees of the firm donated $6,000 to Smart Government Inc., a Denver political organization overseen by Thomas Romer, Chris Romer’s brother. Stratton & Associates and Chris Romer also donated to the group.

JPMorgan was also among the five banks that sold the authority interest-rate swaps tied to the bonds. The other institutions were Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., UBS and the Royal Bank of Canada.

CDR advised the authority on the purchase of the swaps.

Also, in December, Michael Stratton was one of the hosts of a Washington, D.C., fundraiser held to help Richardson retire debt from his presidential campaign.

(Actually, we’re open to suggestions, hopefully some that don’t involve -gate or -water. Post them in the comments.)

In the meantime, Muckety.com has posted a fascinating interactive map of the investigation that caused Richardson to withdraw as nominee for the Secretary of Commerce.

Click around in the map and see how the parties are related to each other. If the map explodes and you suddenly see way more names than you can decipher, just click “reset map” in the top right corner.

On another topic, the state is looking into ways to avert people from jumping to their deaths from the Rio Grande Gorge bridge, the Santa Fe New Mexican reports.

And down south, a new sales tax to help pay for the state’s spaceport went into effect Thursday in Doña Ana and Sierra counties, according to the Las Cruces Sun-News.

We will emerge from recession in 2009 or fall into Great Depression II. But we’re not likely to take steps toward restoring economic democracy, though. Free market fundamentalists still man the barricades, promoting their delusions. It’s understandable that the affluent should subscribe to doctrines generally consistent with their self-interest. For non-wealthy fans, laissez-faire is religious belief, a matter of faith, resistant by definition to reason.

What’s worse — and what I find difficult to grasp — is liberals who still grovel before a god that’s failed.

We were told, back in Reagan’s time, to cut taxes, stomp inflation, deregulate, emasculate organized labor, privatize and, well, the “free market” would do the rest.

The tellers included the best and brightest academicians (economics departments violate the “all faculty are liberal” rule) and foundation scholars. Milton Friedman, Paul Craig Roberts, Jude Wanniski, Arthur Laffer, George Gilder and others channeled (they said) prophets like Adam Smith, David Ricardo and Friedrich von Hayek.

Thirty years later, their gifts have turned out to be, like so many toys from China, poisonous. We’re on the road to Third World status, with huge disparities of wealth, huge personal and national debts, rampant corruption at the highest levels. Unemployment soars, health declines, dependency on foreign lenders swells — even as our leaders play at empire.

The financial bust could mark the end. James Galbraith reports in “The Predator State” that conservative economists are disillusioned, it’s hard to find dedicated monetarists (money supply is everything!) or supply-siders. And, true, Alan Greenspan, the Ayn Rand acolyte, is on the record doubting his own dogma.

But I find free market fanaticism lingers on, like a hangover, in the print press and on the Web. Faced with the utter failure of their ideology, some fundamentalists deny, some prate about “greed,” some blame the victims. And liberals still talk respectfully of discredited doctrines.

Why? How many “free market” busts does it take?

As Arianna Huffington recently pointed out, the collapse of the communist political system killed Marxist ideology. “But while laissez-faire capitalism has been a monumental failure in practice, and soundly defeated at the polls,” she writes, “the ideology is still alive and kicking.”

It all starts with language, of course. Words never fully capture what they purport to describe, but in economics (more properly, political economy) we employ language that’s parsecs from reality.

Take “market.” Buying fruits and vegetables and chatting with folks at the Downtown Growers’ Market, I note that the City of Albuquerque provides the park (subsidy) and many growers accept WIC food stamps (subsidy). Also, I pay for what I take home, according to contract law and the police power behind it. Society makes my favorite market possible; it’s neither pure nor free.

So, too, the metaphorical “free market.” As for “free trade,” it’s a pipe-dream, that’s not how nations do business. Silliest yet is “free enterprise.” How does that describe the National Labs? Pete Domenici’s beloved nuclear industry? Federal research transferred to industries ranging from pharmaceuticals to weaponry? Well, they do “freely” use public money for private gain.

Conclusions based on these words so boldly misstate how we get and spend that we should shelve them under “fiction.”

Liberals must reject conservative myths to get at bedrock issues. Who gets what? And how? Answer: corporate America employs government, under Democrats as well as Republicans, to redistribute wealth upward.

As we tiptoe into 2009, Washington has bailed out big businesses. Obama’s upcoming stimulus package may jump-start activity, but it won’t restore economic or political democracy. To do that, we must understand how ridiculous and how dangerous free market fundamentalism remains.

And in the beginning is the word.

First, combined reporting is a term used for a law that would require multistate corporations to report the income they make in New Mexico so that they can be taxed on it here. Currently, New Mexico doesn’t require this, so many multistate corporations report their income in another state and pay no corporate income tax here.

Advocates want to change that, saying it’s a tax loophole that creates an unfair advantage for these multistate corporations over local New Mexico firms, and that also deprives the state of the tax revenue it needs. New Mexico Voices for Children’s Board President, Donald Simonson, wrote an opinion piece for the Albuquerque Journal to that effect on Dec. 19, in which he pointed out that New Mexico and Oklahoma are the only states “west of the Mississippi” that don’t have such combined reporting rules. Plus, he said such a law would raise about $90 million in revenue for the state.

This was followed by a letter to the editor by Dick Minzer, disputing that a combined reporting law would be fair or desirable. Minzer said that such a law would actually unfairly tax part of the income of the out-of-state corporation that was not earned in New Mexico, and he said it would negatively impact economic development efforts in the state. If such shifting of corporate income tax out of New Mexico does happen, he said, there are other “more targeted ways to address it.” However, he does not explain what those other options would be.

The Albuquerque Journal tacked on an editor’s note explaining that “Ex-legislator Minzner chaired the House Taxation and Revenue Committee before appointment as secretary of the Taxation and Revenue Department in 1991.”

What the Journal did not say, however, is that Minzer is currently a lobbyist for quite a few big multistate corporations doing business in New Mexico.

Here is the list I have — you can click on the links to see for yourself:

• AMBASSADOR FINANCIAL SERVICES INC 02/15/2007 TO 12/31/2008
• AMERICAN COUNCIL OF LIFE INSURERS 01/19/1995 TO 12/31/2008
• FOREST CITY COVINGTON NM LLC 12/06/2005 TO 12/31/2008
• FPL ENERGY, LLC 02/22/2005 TO 12/31/2008
• MESILLA VALLEY HOSPITAL 09/19/2007 TO 12/31/2008
• NEUTRON ENERGY INC. 01/02/2008 TO 12/31/2008
• NEW MEXICO BOYS AND GIRLS RANCHES 02/05/1997 TO 12/31/2008
• PSYCHIATRICS SOLUTIONS INC 07/16/2007 TO 12/31/2008
• RANNEY RANCH PARTNERSHIP LIMITED PARTNERSHIP 01/02/2008 TO 12/31/2008
• SITHE GLOBAL POWER LLC 12/22/2005 TO 12/31/2008
• TRI-STATE GENERATION & TRANSMISSION ASSOCIATION, INC. 02/02/2006 TO 12/31/2008
• UNIVERSITY OF NEW MEXICO 01/19/1999 TO 12/31/2008
• WESTLAND DEVCO LP 12/10/2007 TO 12/31/2008

Illustration by Keith Lewis

ALBUQUERQUE — For a look back on 2008 from an environmental perspective, I made an extremely unscientific poll of green leaders who were unlucky enough to get caught by my phone calls this week as they were stuck in the office, walking through shopping malls, dealing with screaming children or merely trying to have a nice breakfast at the coffee shop that I call my office.

I asked all of these people to talk about what they thought were the biggest environmental stories of the year. They mentioned Tax Increment Development Districts, the proposed Desert Rock power plant, river otters, the destruction wrought by all-terrain vehicles in national forests and a new law allowing concealed weapons in national parks. But mostly they wanted to talk politics. Like everyone else, environmentalists were consumed by the 2008 elections and the sea change coming to the Legislature, Congress and the White House.

Here’s their choices for the top environmental story of the year.

The 2008 Elections

Sandy Buffett, executive director of Conservation Voters of New Mexico

“The big winner in the 2008 elections was New Mexico’s air, land and water. There was some coattail effect from Obama in November, but not in the June primaries. The candidates we supported won by talking to voters about clean energy and ensuring we’re not compromising public health, clean water and air. So to now have new friends and champions who understand why we need to protect the resources and special places that make New Mexico great means we can move beyond defense against industry lobbyists and hopefully move toward making positive change. [For example,] in the legislative session there will be a green jobs bill and there will be an attempt to reform the TIDD policies to close the loopholes that allow greenfield sprawl developers to grab subsidies intended for infill development.”

Buh-bye Bush!

Jim Baca, New Mexico Natural Resource Trustee and a director of The Wilderness Society

“There’s no question, Bush leaving office is the biggest story of the year. Electing people like Barack Obama, Tom Udall, Martin Heinrich — that’s big news for the environment. … And we’ll get rid of people like [Vice President Dick] Cheney, who wanted to start drilling in the Valle Vidal. With this election we’ve done a complete reversal of how we’re going to approach these problems. Obama is not a guy who understands western public lands issues, so his appointments will be very important. [Secretary of the Interior nominee Ken] Salazar is neutral — not good or bad — but he’s experienced.

“The next important picks will be for jobs that are not Cabinet-level: the Bureau of Land Management, the Fish and Wildlife Service, the Bureau of Reclamation, the Minerals Management Service. They’re really important, but they don’t get any attention. We’ll know how good Obama’s administration will be [when they're announced]. At the very least I think they’ll stop the bleeding.”

The Economic Crisis

Joanie Quinn, education and marketing coordinator at the New Mexico Organic Commodity Commission

“I think the biggest story of the year has been the effect of what I insist on calling the economic ‘depression’ on efforts to mitigate climate change. To me, that’s the big one. We can either look at this as an opportunity to really start moving in directions that will support carbon reductions as we fight our way out of the economic crisis, or we can be blinded by the crisis and fall into business as usual.”

Drill, Baby, Drill!

Eric Jantz, staff attorney for the New Mexico Environmental Law Center

“Definitely the Santa Fe ordinance for oil and gas development in the Galisteo Basin. That’s huge because it’s one of the first times there’s been a grassroots democratic movement to get government to really regulate the oil and gas industry. The industry has historically had a lot of dispensations from the federal and state government. The Santa Fe County ordinance is one of the first, and best, where a community has said, ‘Look, we’re not necessarily opposed to energy development but we want to do it on our terms.’ The ordinance sets out a long-term plan for oil and gas development in Santa Fe County, rather than the piecemeal development that’s happened in most of the West. It lays out a plan and process for oil and gas developers to follow. It also takes measures to protect public health and safety, and that’s coming more and more to light as oil and gas production expands to communities where people are living. It’s a model for other areas in the state and in the country and it’s easily translatable to other kinds of resource development, like coal mining and uranium mining.”

New Hope for Endangered Species

Nicole Rosmarino, wildlife program director at Wild Earth Guardians

“There really is no more important issue in endangered species than whether you give protection under the Endangered Species Act (ESA) or not. Now we can see the tangible results of [politicization at the Fish and Wildlife Service]: for more than two years no new species were listed. We have 300 species that are awaiting protection and we’ve seen proposals but we’ve seen no new listings. The Bush administration was able to be very successful at accomplishing one of its main goals, which was to fundamentally obstruct ESA enforcement. A void of leadership at the Department of the Interior enabled people to ravage science and deny endangered species protection. Officials were actually competing to take credit for reversing protections on Gunnison’s prairie dog!

[Secretary of the Interior nominee Ken] Salazar will have to clean house. We hope that the next director of Fish and Wildlife does not come from within because that agency is absolutely contaminated. We need an outsider to come in and reform the service. Politics can’t interfere with listing decisions.”