CDR Financial Products Inc. is the Beverly Hills-based financial service firm that is the subject of the federal investigation that derailed Richardson’s nomination as secretary of commerce. The Los Angeles Times reported Tuesday that 20 municipalities are now suing CDR on the grounds that it advised them to make deals with banks that paid kickbacks to the firm.

A New Mexico Independent survey of news reports from around the country shows that CDR gained business with governmental entities via entertaining and close connections with major investment banks such as JP Morgan and Bear Stearns.

While Richardson and David Harris, the former executive director of the New Mexico Finance Authority have denied any wrongdoing, federal law enforcement officials are probing CDR’s dealings with Democratic officials in several states. It is alleged that some of the officials took contributions from CDR and gave work and/or seats on boards and commissions to the firm’s founder, David Rubin.

In 2004, when CDR was looking to do business with the city of Philadelphia, it gave Superbowl tickets and limo rides to a Democratic fund raiser — whose date for the game was Philadelphia City Teasurer Corey Kemp. The pair flew to Los Angeles in a private plane, stayed in a fancy hotel and took a limo to the game, mostly on CDR’s tab, according to an October 2006 story in Philadelphia Magazine.

Only 16 days after the game, Bloomberg reported that “Kemp [said] that city Finance Director Janice Davis agreed to ‘move fast forward’ on a $150,000 swap advisory contract for CDR.” Although the indictments didn’t specifically mention CDR, they did mention the company’s gifts to Kemp, apparently in return for work. In the end, Kemp was convicted on 27 counts of fraud and extortion and sentenced to 10 years in prison.

The indictments against Kemp came in June 2004, the same month that CDR donated $75,000 to Richardson’s Si Se Puede! Boston 2004 political action committee, but a few months after CDR had been selected to do work for the finance authority. But the work came without a formal contract.

“I think it might have been JP Morgan who recommended them,” Bill Sisneros, executive director of the NMFA, told The Santa Fe New Mexican.

JP Morgan and CDR also worked together to advise Jefferson County, Ala., on municipal bond debts. But that didn’t work out so well, either. The county ended up paying firms, including Bear Stearns and JP Morgan, $120 million in fees on bond swap deals, which the county’s current adviser says was $100 million too much. Interest rates soared, the deals went sour, everyone’s being investigated and the county is now on the verge of a bankruptcy. Earlier this month, a federal grand jury handed down three indictments and the mayor, who was president of the county commission at the time of the deals, was arrested on charges of taking kickbacks on the deals.

Kyle Whitmore, a staff writer at Birmingham Weekly who has been covering the story, said in a phone interview that when it comes to the county’s financial woes, there’s plenty of blame to go around.

We’re on the precipice of bankruptcy and a lot of that is because our public officials were looking the other way, out of laziness or worse. While their swap advisors, including CDR, were telling them that these were good deals, I don’t think anyone ever explained what was in the fine print and it came back to hurt them in the end. … CDR should have been the ones sounding the alarm bells for us. Everyone thought [the deals] could do no harm but yeah, well, we learned the hard way.

Other cities have also learned hard lessons from CDR and municipal bond deals.

In 2004, the Internal Revenue Service informed the city of Fargo, N.D., that it was investigating problems with nearly $50 million in bonds that were supposed to pay for a water treatment plant. At risk was the bond’s tax-exempt status and millions of dollars in interest. According to Bloomberg, the IRS pointed the finger at Bear Sterns and CDR, which had worked together on ways of sharing profits on municipal finance deals. But apparently they were a little too creative; the IRS said the deal could have ended up costing Fargo $3 million.

Today, folks in Fargo who were involved in the deal and its aftermath are reluctant to talk about it.

“We were involved in a yield-burning transaction and CDR was one of the parties to that transaction, but it has since been settled with the IRS,” Kent Costin, finance director for the city of Fargo, told NMI Monday. Costin refused to comment further.

“As I recall, the city’s bond counsel said, ‘We don’t think it’s OK,’ so they went to another counsel who advised them on that,” said a source familiar with the case. “There were warning signals all over. If you’ve got to switch counsels, then you should have known,” the source told NMI.

When the dust settled, the city ended up owing the IRS $1.7 million. But the city only paid part; most of the money was paid by “third parties involved in the bond sale,” reported a Fargo newspaper (subscription only). Because the details of the settlement were secret, exactly who paid how much is not known.

Harrisburg, Pa., and Johnson City, Tenn,. went through similar dramas.

“In all three cases, which together account for $105 million of bond issues, the IRS said it was concerned about the relationship between Bear Stearns and CDR,” Bloomberg reported.

Why didn’t New Mexico hear the warning signals? Well, maybe state officials should have, but the investigations and lawsuits surrounding CDR didn’t start erupting until 2004, just after the deals here were done.

Also, observers say, municipal bond finance issues are difficult for most people to understand. News outlets don’t generally cover the intimate details because they’re not interesting until they go wrong.

“The newspaper here got into it a little bit, but then got out because they thought, you know, nobody understands this,” a former Fargo city commissioner said Monday.

Heinrich cosponsored the Paycheck Fairness Act and the Lily Ledbetter Fair Pay Act of 2009.

“It’s a disgrace that a woman only makes 78 cents for every dollar earned by a man. Especially in these tough economic times, we must do all we can to ensure true economic equality,” said Heinrich in a statement.

The Paycheck Fairness Act will “strengthen the Equal Pay Act and close the loopholes that have allowed employers to avoid responsibility for discriminatory pay.”

The legislation is sponsored by Rep. Rosa DeLauro, D-Conn., and has 175 cosponsors signed on.

The Lilly Ledbetter Fairpay Act of 2009 “is a direct response to the United States Supreme Court’s 2007 decision, Ledbetter v. Goodyear Tire & Rubber Co., which held that Lily Ledbetter could not receive appropriate damages for years of gender-based pay discrimination despite the fact that Ledbetter filed a charge with the U.S. Equal Employment Opportunity Commission as soon as she learned of the disparity.”

The Lilly Ledbetter Fairpay Act is a priority for the Barack Obama administration and many in Congress. The New York Times writes:

President-elect Barack Obama and Democrats in Congress are planning swift action to overturn a Supreme Court decision that made it much harder for people to challenge discrimination in employment, education, housing and other fields.

The New York Times notes the Supreme Court decision was used as justification for discrimination beyond gender discrimination.

“It’s incredibly unfair that victims of gender pay discrimination should be punished for not knowing they were being discriminated against,” stated Heinrich. “Everyone deserves fair treatment in the workplace and this bill restores that right.”

Last year, the bill passed the House, but failed by three votes in the U.S. Senate to reach 60 votes. With new Democratic senators, including Sen. Tom Udall, coming in to office, Senate Democrats are confident it will pass without much trouble.

Former Rep. Heather Wilson, an Albuquerque Republican and Heinrich’s predecessor, voted against the bill. Udall voted for the bill while in the House. Ex-Sen. Pete Domenici, Udall’s predecessor, voted against the bill in the Senate.

ALBUQUERQUE — Gov. Bill Richardson on Wednesday vigorously defended his former presidential campaign chairman and ex-chief of staff.

Dave Contarino, the governor said, has the “utmost integrity, talent” and is “responsible for some of the successes of my administration.”

But when questions were put to the governor himself about a federal investigation that has seemingly hijacked the news in New Mexico, Richardson became terse.

“I’m not going to make any more statements,” Richardson said after a reporter asked if he were a target, a witness or a suspect in a federal inquiry that cost him a cabinet post in President-elect Barack Obama’s administration.

The investigation in question appears to have shoved its way into the governor’s office if reports are to be believed that federal prosecutors are asking whether Contarino, 47, a man Gov. Bill Richardson once described as “my most senior and trusted aide,” might be involved in the alleged pay-to-play scheme.

Contarino served as Richardson’s chief of staff from 2003 to April 2006 and has run several of Richardson’s campaigns.

“Dave Contarino is an outstanding public servant who has served in federal government, in the Congress he was my chief of staff,” Richardson told the reporters over the cacophony of bustling traffic on nearby streets and the cars cruising overhead on the soaring roadways of the Big I. “So I have the highest respect and regard for Dave Contarino.”

The governor didn’t respond directly when asked if he and Contarino had talked about the inquiry, or whether Contarino had told him personally that he had done nothing improper.

Instead, Richardson went out of his way to defend state officials involved in the deal federal prosecutors are now investigating –- lucrative work given to a California company that gave sizable contributions to two political action committees Richardson started.

“In my view the state, state officials, have done nothing wrong,” Richardson said. “They’ve behaved with the best intentions, the best conduct. This contract was achieved through a competitive basis,” he said.

Richardson repeatedly was asked how he knew that no one in his administration had acted improperly. The question of whether an internal investigation has been ordered to ensure that nothing was done improperly was put to him five times Wednesday. But he ignored it each time it was asked, as he did Monday when he twice refused to answer that question.

The inquiry that has Richardson facing questions is focusing on work awarded to California-based CDR Financial Products, Inc. The work the company did fell into separate areas and not every service was competitively bid, as Richardson suggested Wednesday.

One area CDR did work for the state included “SWAP and GIC brokerage, advisory and management services.” That project was competitively bid in early 2004, but it appears from state documents, including e-mail, that no contract was signed for the work done.

The other work CDR performed for the state was related to the escrow fund for GRIP, short for Governor Richardson’s Investment Partnership, for which CDR received a “one-time sole source” contract, according to the minutes from New Mexico Finance Authority’s June 30, 2004 meeting.

A sole source contract is one that is not competitively bid.

Richardson appeared not to want to face the media’s questions Wednesday. He gave the slip to several reporters wanting to ask questions at the second of three public appearances he made.

But it was beneath the Big I, at the junction of I-25 and I-40 and the third of the governor’s three public appearances, that Richardson finally faced reporters to acknowledge the big news of the day.

He took questions for about a minute and a half before he cut the impromptu press conference short.

While the question and answer session was short, Richardson did surprise some reporters with one response he gave.

Richardson has repeatedly said that he wouldn’t discuss the federal inquiry. But on Wednesday he let some of his frustration show vis-a-vis the investigation.

“I’m concerned about a lot of leaks coming out,” he told reporters. “It’s important that we remember one thing: no one has been accused of any wrongdoing; it’s an inquiry.”

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.”

The Teague office announced in a press release that the freshman Democrat supports eliminating the 2010 congressional pay raise. In 1989, Congress voted to give congressional pay raises every year unless Congress specifically voted against doing so.

“The country’s economy is hurting right now and my constituents are counting on me to do the right thing,” Teague said the statement. “Nearly two million Americans lost their jobs this past year. Congress giving itself an automatic pay raise at a time like this is just plain wrong. I’d much rather see us giving middle-class Americans a tax cut — that would help them and help the economy.”

The statement claims that the co-sponsorship of 63 members of Congress from both parties “signals the strongest demonstration of Congressional support to block the automatic pay hike in recent years.”

Each member of Congress is scheduled to receive a $4,700 salary increase this January.

The legislation is sponsored by Harry Mitchell, an Arizona Democrat.

The story is a little convoluted, so I’ll hit the highlights: the governor makes promises at the day’s first stop to take questions at the day’s second stop, which takes place in an auditorium that unbeknownst to reporters has a side door that the guv and his entourage then use to dodge the pesky scribes who chase the governor but who are left in the dust of his black SUV as it squeals away before a question is shouted out.

The slip was a troubling development in a day that had started off quite innocently.

Richardson, coming off a bad few days public-relations wise, scheduled three public events Wednesday in Rio Rancho and Albuquerque for what his press office no doubt thought was good news: to break ground for a Hewlett Packard plant in Rio Rancho, to announce that ReelzChannel will re-locate its headquarters to New Mexico; and an event to unveil landscaping at the Big I at the junction of I-25 and I-40 in Albuquerque.

Unfortunately for the guv and his press office, the day admittedly didn’t start off great. News broke late Tuesday night that his ex-Chief of Staff Dave Contarino figures into the federal investigation that cost Richardson a cabinet post in President-elect Barack Obama’s administration.

Those of us in the media kind of knew the guv wouldn’t be a happy camper and might refuse to answer questions as he has done before.

So it came somewhat of a surprise when the guv, leaving the day’s first stop, said he’d take questions at the National Hispanic Cultural Center in Albuquerque, the host of the day’s second stop.

Here’s a blow-by-blow exchange.

“Can you take questions on …,” I said as Richardson tried to get into his black SUV waiting to whisk him away from the groundbreaking to the ReelzChannel announcement in Albuquerque.

“Next one,” the governor said, waving his hand.

“OK, next one,” I replied, believing him.

At that moment, a KOAT-TV reporter interjected, “Can I ask you Mr. Governor,” at which point one of Richardson’s press aides informed the TV reporter that questions would be taken at the second event.

Well, as you’ve no doubt gathered, that’s not exactly how it turned out.

At the next stop, the governor, and several other speakers, spoke glowingly of the just-in news that ReelzChannel would re-locate its headquarters to New Mexico. The event’s planners even brought in movie critic Leonard Maltin to sing the praises of the relocation, which, honestly, was kind of cool.

The media dutifully waited at the back of the auditorium for the event to come to a close because the governor and his aides clearly had said he would take questions. Usually this is how it works. The governor walks to the bank of TV cameras and takes questions.

But this time the governor slipped out a side door at the front of the auditorium, provoking much bad language from at least one reporter who, along with a gaggle of other reporters, quickened his pace — and then ran — to catch the governor.

Once outside, all the media saw was a moving black SUV.

We in the media dutifully piled into our cars, some of us still cursing — OK me still cursing — to head toward the third event, which fortunately for us was held under New Mexico’s bright blue sky at the Big I with no secret escape routes. Which, of course, meant Richardson had to take questions. But he obviously is proud because he didn’t say much of anything, and even refused to answer one question that was asked of him six times.

I guess here’s the lesson learned. Don’t believe Richardson when he says he’ll take questions at the next event. Ask him now.

First up, a first-hand account of a new round of layoffs from The Albuquerque Journal.

So far I’ve somehow kept it together, despite losing my job as of an hour & 1/2 ago. I’ve not turned into a screaming crying 2-year old as in the past 3 layoffs. But it’s just below the surface and is growing with each minute. My hands and body are shaking, my neck hurts. I need that shoulder to cry on now for a day or so and then I’ve got to pick myself up and figure out what the hell I’m going to do.

In happier news, Democracy for New Mexico spoke to Rep. Ben Ray Lujan. No more suffix “-elect” for any of those elected in November; it can now hibernate with the word “presumptive”.
Kate Nash wonders if all the FBI agents in Santa Fe researching Bill Richardson (we couldn’t ignore him completely!) will help with hotels in the area.

Nash concludes, “Let’s hope, because we haven’t seen many tourists lately.”

Talking Points Memo notes that a conservative blogging service has hired Joe the Plumber as a war correspondent in the Gaza conflict. No joke.

Albuquerque Journal science writer John Fleck looks at newspapers online. “This is not about doing a good job of delivering news on the web,” Fleck writes. “It’s about the fact that in so doing, there is not enough money to be made to support the people doing it.”

Finally, Avelino Maestas needs some help in entering a photography contest with the Washington, D.C., blog the DCist. Sure, Maestas abandoned us for Washington, D.C., but we won’t hold that against him, right?

Especially since he’s bribing us with a potential free print of one of his great photos. The deadline is tonight at 9:00 p.m. local time.

The average age will be 57 in the House and 63 in the Senate, according to the chambers’ historical offices. In each case, it’s the highest on record.

So how do our new delegations stack up? In the House, the average age of the three new members of the House is 44 years old, well below the average. In the Senate, with 65-year-old Jeff Bingaman and 60-year-old Tom Udall, the average is 62.5 years, right about at the average.

But some more interesting musings on the age of the House delegation here in New Mexico. Ben Ray Lujan, at 36 years, 6 months and 30 days old on the day he was sworn in, is the third-youngest representative in New Mexico history. The youngest was Ed Foreman, who, when sworn in, was just 35 years, 11 days old. Foreman was actually elected to Congress at a younger age — six years earlier, he was elected to Congress in Texas’ 16th Congressional District.

The second-youngest was current Gov. Bill Richardson, who was 35 years, one month and 19 days old when sworn in. Martin Heinrich edges his predecessor Heather Wilson four fourth-youngest. At 37 years, 2 months and 20 days old when sworn in, he was 3 months and 4 days younger than Heather Wilson when she was sworn in in 1998 after a special election.

The oldest to be sworn in for a first term? John E. Miles was 64 years old when sworn in for his only term back in 1949.

However, Lujan is just the fourth-youngest Democrat in this year’s freshman class according to the blog Future Majority. Heinrich ranks fifth youngest among Democrats. Both are old men compared to Illinois Republican Aaron Schock, who is the first representative in Congress to be born in the 1980s (May 28, 1981).

Jeb Bush: Disliked as far away as Ireland. Photo by the Labour Party

You needed a little bit of good news this morning, didn’t you? Well here it is: “Dousing Republican hopes that a political giant would enter the U.S. Senate race, Jeb Bush said Tuesday that he will not run,” says a St. Petersburg Times story this morning. Oh, but it gets better.

That is if you’re among the vast majority of Americans who never want to hear the name Bush again, ever:

“Jeb’s decision probably marks the end of the Bush era in Florida,” said Brian Crowley, a veteran former political writer for The Palm Beach Post. “If Jeb stays on the sidelines in 2010, a future presidential race may be out of the question. By 2012, he will have been out of office for six years and he risks becoming — Jeb who?”

Want to know more? The story has a little pre-game analysis, too:

“On the Democratic side, [the state of Florida's] Chief Financial Officer Alex Sink would be the clear favorite, and Bush’s departure should make the race more inviting for her. Spokeswoman Tara Klimek said Sink, 60, is focused on the Legislature’s budget deficit deliberations and has not made a decision.

“It’s a huge game-changer for the Republicans, not as much for us,” Democratic state Sen. Dan Gelber of Miami, another likely contender, said of Bush’s decision, noting that Bush didn’t scare off Democrats as much as Republicans.

U.S. Sen. Tom Udall

While there will still be a massive drop in seniority from Pete Domenici, who served six terms in the Senate, to freshman Sen. Tom Udall, at least Udall will not have to start at the very bottom of the pecking order.

According to CQ Politics, Tom Udall will only trail his Colorado cousin Mark Udall in terms of seniority — among freshmen, at least. Seven new freshman senators were sworn in on Tuesday with a few more on the way.

The Senate refused to seat Roland Burris as Illinois’ junior senator Tuesday morning, and the fate of the Minnesota Senate seat still has not been resolved. Add to that Vice President-elect Joe Biden’s Delaware Senate seat (which he will resign in the next few weeks) and the seats of Secretary of Interior-designate Ken Salazar and Secretary of State-designate Hillary Clinton, and there will be a total of 14 new senators. New Mexico’s Udall will be ahead of 12 of them in seniority.

Why does seniority matter? Legislators in both houses with more seniority are generally given better committee assignments and, usually, lawmakers with more seniority are given the committee chairmanship. A recent exception is Rep. Henry Waxman, who successfully wrested control of the House Energy and Commerce Committee from his fellow Democrat, Rep. John Dingell of Michigan, late last year.

Other benefits include having a desk closer to the floor of the Senate and a better office when those higher up the seniority food chain vacate their offices. You can ask Udall about his first office in Washington, D.C., when he was first elected to Congress. Or you can ask freshman Rep. Ben Ray Lujan — he was given the same office this year.

Udall’s seniority is a far cry from Pete Domenici’s, however. Domenici would have been the most senior Republican in the Senate, had he decided to run for another term as senator. And had he won, of course.

In fact, Domenici would have been fourth behind just Sens. Robert Byrd (D-W.V.), Ted Kennedy (D-Mass.) and Daniel Inouye (D-Hawaii) in terms of seniority had he retained his seat.

But it could be worse for Udall. If the Minnesota case drags on for months as expected, Al Franken will come into the Senate as 100th in seniority out of 100 senators.