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.”

One unnamed witness who testified before the federal grand jury investigating the allegations was quoted by the news organization as saying he was asked if Contarino, Richardson’s former chief of staff, ordered officials with the New Mexico Finance Authority to hire CDR Financial Products for a lucrative state contract. And “another personal familiar with the investigation” was quoted as saying that Contarino “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.”

Contarino, who is 47 and owns a title company in Santa Fe, developed policy and managed Richardson’s political and governmental staffs from 2003 through April 2006, He also ran both of Richardson’s campaigns for governor and his unsuccessful run for president last year. When Contarino left the chief of staff job in 2006 to work on Richardson’s re-election campaign the governor called Contarino his most trusted aide.

It was already known publicly that the ongoing federal investigation centers around whether any staffers in Richardson’s office engaged in pay-to-play politics on the CDR deal, but none had been publicly named before the Bloomberg.com article was published shortly after 10 p.m. New Mexico time on Tuesday.

The Bloomberg.com report threatens to increase the level of scandal surrounding Richardson, who has bowed out of his appointment to be Commerce Secretary. It was already known publicly that the ongoing federal investigation centers on whether any staffers in Richardson’s office engaged in pay-to-play politics on the CDR deal, but none had been publicly named before the Bloomberg.com article was published shortly after 10 p.m. New Mexico time on Tuesday.

Last August Contarino told NMI that he had not been subpoenaed by investigators.

Today Contarino provided this statement via e-mail to the news organization:

“As chief of staff and co-chairman of the Governor’s Finance Council, it was my job to be involved in GRIP and many of the administration’s economic and financial initiatives,” he said. “In all of my actions, I acted appropriately and I am confident that the investigation will bear out that fact.”

GRIP, or Governor Richardson’s Investment Partnership, is the state contract at the center of the probe. CDR was paid almost $1.5 million in 2004 advising the finance authority on interest-rate swaps and restructuring escrow funds for $1.6 billion in GRIP bonds. Meanwhile, in 2003 and 2004, CDR Financial gave $75,000 to Richardson’s political action committee Si Se Puede!, and the company’s head, David Rubin, gave $25,000 to Moving America Forward, another Richardson PAC.

‘He never ordered me to do anything with CDR’

Ed Romero, a former ambassador to Spain who was finance chairman for Richardson’s presidential campaign, was quoted by Bloomberg.com as calling Contarino a “very effective political professional” and said he would be surprised if Contarino did anything improper.

Bill Sisneros, who has headed the finance authority since about three months after CDR was hired and was not involved in that decision, told Bloomberg.com that Contarino never told him to choose CDR for other work.

“Dave and I, we’ve talked about CDR but he never ordered me to do anything with CDR,” the article quoted Sisneros as saying. “I’ve never spoken to Bill Richardson about CDR.”

Contarino has remained involved in Richardson’s political activities since the governor’s presidential campaign ended. In July, a fundraiser Richardson hosted to help Hillary Clinton retire her presidential campaign’s debt was held at Contarino’s Santa Fe home.

Scrutiny increases

The news about Contarino came in one of several Tuesday reports that indicated an increased level of scrutiny on Richardson and President-elect Barack Obama following the national embarrassment caused when Richardson withdrew his nomination to be commerce secretary over the weekend because of the ongoing probe.

ABC News was the first to report on Tuesday that David Rubin, head of CDR, had also contributed more than $30,000 to the Obama campaign and a joint Obama-Democratic National Committee fund formed to help elect Obama. Using the investigation of the Richardson administration as a springboard, the Pittsburgh Tribune-Review published an article about that state’s governor, Ed Rendell, receiving $35,000 in contributions from Rubin, whose company has made nearly $600,000 from a contract with that state.

And Bloomberg.com reported in a separate article published earlier Tuesday that one of Richardson’s senior political advisers, Denver political strategist Michael Stratton, lobbied the state of New Mexico on behalf of J.P. Morgan, which won a contract related to the bond deals that are the subject of the federal investigation into CDR. Stratton was paid $269,000 by J.P. Morgan for its work on behalf of that company.

J.P. Morgan officials have already testified before the grand jury in the CDR case.

The later Bloomberg.com article about Contarino quoted Sisneros as saying that Stratton also lobbied the finance authority on behalf of CDR. Stratton, a senior adviser and bundler for Richardson’s presidential campaign, declined to comment to Bloomberg.com.

Stratton has also remained active in Richardson’s political activities since the governor’s presidential campaign ended. In December, he co-hosted a fundraiser in Washington to help Richardson retire his campaign’s debt.

‘Putting this matter to rest’

Meanwhile, Richardson has scheduled several public events for today and Thursday in Albuquerque and Santa Fe unrelated to the federal investigation as he attempts to move past the scandal. And, as reported by the Albuquerque Journal, Richardson “appears to have embarked on a national damage-control campaign via e-mails to supporters of his own yearlong presidential bid.”

“Thank you for your past and continued support. I look forward to putting this matter to rest and in the meantime I am preparing for the upcoming New Mexico legislative session,” states a Monday e-mail from Richardson to supporters. The e-mail also states that it was paid for by Richardson’s now-defunct presidential campaign, which has still not retired all of its debt.

Mayor Steve Brockett and First National Bank President Pete Cook will also deliver a pair of speeches at the meeting, where they are expected to talk about serving on Lt. Gov. Diane Denish’s transition team.Brockett is one of 18 people on Denish’s government efficiency and finance committee, while Cook is serving on the economic stability committee.

This raises an obvious question — if there is no transition, can there really be a transition team?

But as the New Mexico Independent noted yesterday, to Denish, such a transition hasn’t been canceled, but merely postponed.

“Gov. Richardson postponed taking a position in the administration to ensure that President Obama and the American people face no delays in getting to work to fix our ailing economy, and the president-elect said he looks forward to Gov. Richardson joining his administration in the days ahead,” Denish said in the statement on Richardson’s withdrawal from the position of secretary of commerce.

This means the transition will, apparently, go on.

Brockett said he learned late Sunday night, via e-mail, that Denish still wanted to continue with the transition meetings.”That was fine with me,” he said. “We already had invested quite a bit of time in it. I was glad to see it continue. The recommendations we’re making is a good start, regardless of who the governor is.”

The group is meeting to make recommendations on how to improve government.

To quote the titular character in “Alice in Wonderland,” Louis Carroll’s famous book, “Curiouser and curiouser!”

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:

Flickr/Richard Soderberg

ALBUQUERQUE — “Pay-to-Play.”

It’s a catch-all phrase, much in the news these days, to describe the kind of corruption in which payment of some sort is made to a power-broker to make something happen.

Illinois Gov. Rod Blagojevich’s tape-recorded musings about how contributions to his campaign might be rewarded with an appointment to the U.S. Senate was a classic example from a city known for political graft.

Federal investigators are probing whether a similar deal was afoot here in New Mexico when a California company, CDR Financial Products, Inc., was awarded a state contract from the New Mexico Finance Authority in 2004 after two large contributions — totaling $100,000 — were made to Gov. Bill Richardson’s political action committees in 2003 and 2004. Last week, the investigation derailed Richardson’s nomination to be commerce secretary in the Obama administration.

Whatever the consequences for Richardson personally, his withdrawal from the commerce secretary post raises serious questions about how business is done in New Mexico. It’s not the first time that the shadow of corruption has hung over the state, but this story has the potential to be the most damaging because it could involve not just him, but people who worked for Richardson as well.

For years, I’ve heard people whisper about pay-to-play as a way of doing business with Richardson’s administration. Most of these people, though, have some kind of relationship with the state government and won’t kill the prospects of getting state contracts by complaining out loud about the political arm-twisters seeking large campaign contributions.

But University of New Mexico political science professor Lonna Atkeson told the Independent the perception that pay-to-play is rampant in New Mexico results from the way our government itself is set up, at all levels — local, state and federal.

“There’s a lot of pressure that stems from the design of our government itself for people to give. Even if the politician doesn’t demand it, maybe people think its expected that they’ll contribute. What they receive may not be what they want. So are they actually buying access or something else? It can create the appearance of corruption even when it doesn’t exist.”

Steve Allen, executive director of the good-government group Common Cause New Mexico, said, “The way it works is very subtle and, frankly, not illegal.”

“A politician notices who gives — and the contributors gain access,” he explained. “Politicians are more likely to return phone calls to their big contributors. Then, through the development of relationships with the politician and his staff, the contributor might be the beneficiary of favors.”

“Most politicians aren’t on the take,” he continued, “but when you have a state that has no contribution limits whatsoever, and you have companies able to fork out tens and in some cases hundreds of thousands of dollars, it invites conflict of interest that is not good for the politicians themselves, much less the public.”

Change we can believe in?

Flickr/Eyeliam

There are two ways to correct these systemic problems, Allen said: contribution limits and public financing mechanisms — which together would go a long way toward taking the money out of politics.

Currently, New Mexico is one of only five states that place no limits on contributions to political candidates or political action committees, so denying that favors are being traded for large contributions is made a lot easier than it otherwise would be.

The other four states without campaign contribution limits are Illinois, Oregon, Utah and Virginia.

Public financing laws, however, have made some headway in the past five years. Atkeson thinks this shows that many in New Mexico recognize the need to create safeguards against pay-to-play schemes.

In 2003, the Public Regulations Commission was placed under a publicly financed elections system. The state’s appellate judgeships were given public financing in 2007. Allen said the reasons for both of these changes were very clear cut — it was unseemly to have elected officials accept campaign contributions from those who also had direct business with them, or were regulated by them.

Additionally, Albuquerque has public financing for municipal elections, and Santa Fe will have such a system in place soon — the voters approved it last March.

Allen said while he doesn’t know who will be sponsoring it yet, a public financing bill will most likely be introduced during the 2009 legislative session for the big money races of New Mexico’s executive branch: the governor, lieutenant governor, secretary of state, attorney general and state land commissioner.

In addition, Rep. Joseph Cervantes, D-Las Cruces, told the Independent that New Mexico doesn’t have enough “clear statutory direction” regarding elected officials and the awarding of state contracts.

“The line between what is acceptable and unacceptable is blurred to some people,” he said in an interview. “One of my objectives through legislation is to demarcate that line as clearly as possible.”

In 2007, Cervantes passed a bill that amended the Governmental Conduct Act to place more stringent restrictions on state employees when it came to the awarding of state contracts. That bill was signed into law by Richardson. He also gained approval of a “whistleblower” bill to protect and potentially reward people who come forward to expose corruption.

This year Cervantes will re-introduce bills to open conference committees to the public, and to create an ethics commission. He is also introducing a package of bills in collaboration with New Mexico Attorney General Gary King geared toward giving the public greater access to information about how government operates and to make government more transparent.

When it comes to the federal investigation underway, Richardson has strongly denied any wrongdoing by his administration, and said he fully expects the investigators to conclude the same in the end.

CDR Financial Inc. President David Rubin also vigorously denied that the contributions to Richardson were designed to gain the state contract. In a statement on the firm’s Web site, he said:

For the record, CDR has never practiced pay-for-play, on any playing field where we do business. With respect to the work we did for the New Mexico Finance Authority, we underwent a rigorous vetting process that involved multiple steps to ensure that CDR was, in fact, qualified for the job of assisting the state in managing its interest rate swap transactions…

It is true that I have made contributions to political causes and candidates in New Mexico — including contributions directly to Bill Richardson’s gubernatorial campaign and to organizations supporting voter registration drives and other aspects of the electoral process. That support was given with full compliance of state and federal laws…

Anyone who knows me knows that I have been an unabashed supporter of Democratic causes and public figures, especially those like Gov. Richardson, who support a liberal, inclusive agenda.

And an editorial in the Seattle Times sums up the “anger and frustration” of Richardson supporters, as well as the puzzlement that such a skilled politician could be “anywhere near a cheesy scandal that forced him to withdraw his name to be President-elect Obama’s commerce secretary.”

Well, in the end, maybe its simply due to the fact that he’s the governor of a state that is in serious need of ethics reform.

As the mayoral election of 2009 approaches in the midst of the gravest economic crisis of last 75 years, I’m wondering if we’ll hear candidates parrot the old line about “inevitable” material growth, or if they’ll really start to explore steady state sustainability.

Steady state economics emphasizes qualitative growth over quantitative growth. A steady state economy grows quality of life, not population, not geographic size, not material consumption. It is based, to some extent, on a mature concept of a satisfying “enough” replacing a dangerous too much.

Qualitative growth, of course, is subjective. But it is also quantifiable. It stresses wages over profits, rewarded effort over exploited labor, local business over international trade run by rootless enterprises. It has its focus on the arts, education, a high quality of public life, local entrepreneurism, on food, on discourse, parks, libraries and on resource conservation.

It’s not surprising that steady state economic theories are are moving back into American consciousness during these dire times.

Adbusters magazine’s current issue — “The Big Ideas of 2009″ — has awarded the great spokesman of steady state economics, Herman Daly, the Man of the Year award for 2008. Since the 1970s, Daly has been attacking orthodox economics for its “critical flaw,” failing “to take into account how economic processes consume resources and generate wastes.” Daly sees orthodox economic activity, Adbusters wrote, as a “growing sub-set, of a non-growing planet.”

Daly wrote that “current economic growth has uncoupled itself from the world and has become irrelevant. Worse, it has become a blind guide.”

Daly’s book “Steady State Economics,” was first published in l977. It had a powerful influence on the environmental movement of the time. But was always considered a “fringe” idea by those ran the show.

But Daly is not crank. He’s a professor at the University of Maryland’s School of Public Policy, a former senior economist at the World Bank, working on environmental economics, and the winner of numerous international awards, including the Honorary Right Livelihood Award, which has been described as an “alternative Nobel Prize.”

A discussion of steady state economics sounds like just the topic Albuquerque’s 2009 mayoral race needs if it hopes to become serious about the troubled world we’re living in.

I don’t mean, though, an idealized about face in our local approach to livelihood. I do mean, however, a discussion on how we can infuse our local economic thinking with steady state ideas, incentives, and solutions to problems.

I’m wondering if we’ll hear any new ideas this year from any candidate? Will candidates directly address the current, and sure to be long-lived, recession? Or will they talk about the present as if it were the past, urging growth, growth and more growth, offering TIDDS to every developer, vowing to create lustrous new urbanist settlements in the wild open spaces miles and miles from town? Or will some candidate catch our imagination, and step up to address the crisis that this city, along with every other city in America, is in?

What would stepping up mean? Might it mean being brave enough to discuss economics as if reality mattered? Might it mean proposing a moratorium on sprawl development, realistic water rationing, incentives for infill development, empowering neighborhoods to protect themselves from predatory builders, public investment in more and more mass transit, resurrecting the regional stock exchanges of the 1930s to support local business and agriculture, actually cleaning up Cold War water pollution from Kirtland and Sandia Labs, working arrangements with local banks to finance recycling operations with the city as a guaranteed customer, creating a local senior teaching core to stimulate younger students to think productively about the future.

Would stepping up mean, perhaps, actually giving serious consideration to embracing at least some ideas from the concept of a steady state economy in Albuquerque, allowing us to grow qualitatively, if not quantitatively, as this world-changing economic and environmental crisis unfolds?

Qualitative growth is not negative; it’s not a failure caused by material hardship. It is another way to make a living while making a life that better fits the environmental and economic realities of our times.

I can think of nothing I’d like better than to see candidates talk meaningfully about the economic analyses of Herman Daly.

Adbusters describes Daly’s views: Humanity, he argued, “had to shift to a steady-state economy, one in which demands placed on the ecosystem would remain safely in bounds. This would imply shifting economic policy from a focus on stoking growth, where the scale of physical demands on ecosystems perpetually increased, to a focus on development, meaning humanity would have to learn to make wiser use of a modest and more stable level of material taken from the environment.”

By contrasting “development” with “growth,” Daly means, I think, emphasizing quality of life, a developmental approach to living, rather than physical and material quantitative growth.

Adbusters believes that “Thanks to the overwhelming evidence natural scientists have amassed demonstrating that if we want to avoid catastrophic climate change, humanity must stop pumping CO2 into the atmosphere, mainstream economists are grudgingly coming to accept the fact that there are ecological limits to our growth afer all.”

On a macro scale, Daly feels bailouts of failing industries are “merely a way to keep the growth economy from failing a little longer while allowing it to continue degrading the planet…. Instead, we need to redesign our laws and institutions to foster an economy that remains within biophysical limits… Of course the growth economists will howl that such measures would slow the growth of the GDP. I say so be it –- growth has become uneconomic, and we have limited time to bring the economy into line with the biosphere’s carrying capacity.”

Daly considers the earth as a whole to be in something like a steady state, not static, but with the inflow of radiant energy from the sun equal to the outflow of energy, until the trapping of greenhouse gases. “The closer the economy approaches the scale of the whole Earth, the more it will have to conform to the physical behavior mode of the Earth,” Daly writes in Adbusters. “That behavior mode is a steady state -– a system that permits qualitative development but not aggregate quantitative growth.”

One practical way of bring that about, Daly says, is to tax “what we want less of [depletion and pollution] and ceasing to tax what we want more of (income…) -– as the bumper sticker puts it ‘tax bads, not goods.’”

It would be a major political stunner to hear a viable candidate for the mayor’s job in Albuquerque proposing to heavily tax what we don’t want -– sprawl development, excessive water use and air and water pollution for starters -– and ceasing to tax, and even giving incentives to, what we want -– water conservation, infill development, local agriculture for starters.

That would be a candidate I could support.

Barely 24 hours earlier Richardson had stirred up Washington’s formidable population of Blackberry users with his withdrawal as President-elect Barack Obama’s commerce secretary-designate because of a federal investigation involving state contracts. The local reporters gathered around Richardson’s favorite venue for parlaying with the press — the big table in the fourth-floor cabinet room of the State Capitol in Santa Fe – expected a revelation or, at the least, a bit of news.

The backslapping, sometimes feisty chief executive instead served up a heap of warmed-up, day-old news. Without a hint of irony, Richardson, 61, read a statement similar to the one he gave Sunday. Then he refused to answer many of the questions put to him.

Though strange to an outsider, Richardson’s performance came as no surprise to local media. Outlets that have covered this scandal since August know that the governor’s style has been to remain tight-lipped even when faced with direct questions. Richardson had managed to stay quiet and fly under the radar of the national press as news of the investigation spread. Taking a look at how Richardson handled himself throughout the months leading up to his resignation helps explain why, nationally, there was so much confusion and surprise at the news.

Many news readers in New Mexico know the story — for months federal prosecutors were looking into the awarding of a lucrative state contract to a California company, CDR Financial, that made big contributions to political action committees formed by Richardson. Specifically, prosecutors are looking for any connection between the work CDR Financial Products won in 2004 and the large political contributions that were given to two PACs started by Richardson. The investigation reportedly centers on whether staffers in Richardson’s office influenced the hiring of CDR.

One PAC, Si Se Puede! Boston 2004, was formed to pay for the governor and his staff to attend the Democratic National Convention in Boston in 2004. The other, Moving America Forward, was formed to register Latino and Native American voters in the run-up to the 2004 presidential election.

In 2003 and 2004, CDR Financial gave $75,000 to Richardson’s political action committee Si Se Puede! and the company’s head, David Rubin, gave $25,000 to Moving America Forward, another Richardson PAC.

According to numerous reports, in 2004 CDR made $1.48 million advising a small state agency on interest-rate swaps and restructuring escrow funds for the state’s special $1.6 billion transportation program known as GRIP, short for Governor Richardson’s Investment Partnership.

Richardson has rarely commented on the investigation and walked out on a news conference last month as reporters attempted to ask him questions about the inquiry. He also refused to answer NMI’s questions on the subject Dec. 15, the day he took his first ride on the Rail Runner commter train, a project Richardson has described proudly as one of his legacies in New Mexico. It’s been only now, with his withdrawal, that he has begun to speak, but then only to deny any wrongdoing on the part of the administration.

“I have always fully expected that my administration would be cleared of any wrongdoing and it would be clear that nothing improper took place,” Richardson said Monday.

Meanwhile, the president of CDR Financial Products, the company at the center of the inquiry, also defended itself in a post on its website.

At the same time Monday, Richardson refused to answer questions that did not impinge on the federal investigation, a subject he explicitly said he wouldn’t address; for example, had he hired a lawyer and had he demanded an internal investigation to ensure his administration had done nothing improper in letting a state contract to a California company that had given large contributions to two political action committees formed by him. The timing of the contract and the political contributions has sparked the federal investigation that derailed Richardson’s cabinet appointment Sunday.

Richardson did explain Monday that he had held on to the hope of winning a cabinet post until Sunday in the misplaced hope that his administration would be cleared in time for the confirmation process before the U.S. Senate and that he had “underestimated” how long the federal inquiry would take.

That plan appears to make some sense because federal grand juries in New Mexico are usually impaneled for a year, meaning a new grand jury impaneled this year may have to take up the case all over again, including witness testimony, although the term for a grand jury can be extended.

And for the record, Richardson has hired Peter Schoenburg, a prominent white-collar crime attorney in New Mexico.

Questions About Vetting

The citing of the federal investigation for Richardson’s withdrawal raises questions about the vetting done by the Obama transition team, and whether indeed Richardson pulled the plug as he has said.

Obama’s people have said Richardson told them about the investigation before his nomination last month and gave them assurances that he would come out fine. The scandal received little attention nationally and Richardson was surviving a potentially embarrassing situation just fine.

But as the investigation progressed, and no resolution occurred, it became clear that the clean bill of health that Richardson wanted wouldn’t come in time for the confirmation process. According to some reports, that made Obama’s team nervous and concerned that the investigation was a bigger problem than indicated.

University of New Mexico political scientist Lonna Atkeson, who has followed Richardson’s career for years, told the New Mexico Independent on Sunday that it didn’t sound like Richardson’s style to bow out.

“Richardson’s the type to say, let’s let things run their course,” Atkeson said. “So I think there had to be pressure from the Obama team.”

In light of the scandal involving Gov. Rod Blagojevich in Illinois, the federal investigation in New Mexico would not be a welcome headline.

Richardson’s Reputation

While the governor expects his administration to pass prosecutorial muster, Richardson’s withdrawal from the Commerce Dept. post has once again raised questions about how business is done in the state.

New Mexico, in fact, has endured a series of scandals involving public officials. Over the past three years, two former state treasurers, a state deputy insurance superintendent and a former president of the state senate all have pleaded guilty to or been convicted on corruption charges.

Meanwhile, people have whispered about pay-to-play as a way of doing business in New Mexico. And steadily those whisperings have included the Richardson administration.

Not unlike the current scandal plaguing Richardson, at the time the governor and his spokespeople said he had done nothing wrong and flew under the radar of the national press.

There have been stories about how executives for companies with state business, including the Rail Runner commuter train, have given large sums to his state and federal campaigns. Then there have been the questions of Richardson’s use of corporate jets while he was a candidate. In some cases, the jets used by Richardson came from companies that do business with the state — a practice that is legal but that raised eyebrows.

And there was the case of the California developers who own land near the town of Belen, south of Albuquerque.

Jim Foster of then RS Investments, now Coast Range, contributed $75,000 to Richardson’s re-election campaign in 2005. The firm’s officials met with administration officials in early 2005 to talk about an exchange on Interstate 25, which runs north-south through New Mexico. And the $75,000 contribution came about a month later.

Foster donated use of his personal jet to the governor for two campaign trips to California that same year.

Since then the governor has been helpful in setting aside money for it. The administration earmarked $4 million in state money for the highway interchange in 2007.

What’s Next for New Mexico

The news of Richardson’s diminished status, and the shadow hanging over his administration, has taken some of the shine off the governor’s reputation while also costing New Mexico a bit of self-respect.

“It really is quite a disappointment,” said University of New Mexico political scientist Christine Sierra in an interview with the New Mexico Independent. “Richardson has been the leading political figure in New Mexico to vault onto the national stage. And he has brought a lot of attention to our state.”

“Regardless whether the allegations or the concerns are valid or not, this is damaging enough to really show poorly on the state,” Sierra added.

It is unclear what effects the inquiry and the perception of taint, fair or unfair, combined with Richardson’s rather exit off the main stage, will have on his future.

As prominent New Mexico pollster Brian Sanderoff said, “It’s really depends on whether the grand jury takes any action against any member of his administration,’ Sanderoff said. “We’ll have to wait and see” — a sentiment Richardson seemed to express Monday when he said “I have faith in the criminal justice process, and we must allow it to run its course.”

Meanwhile, Jose Z. Garcia writes on his blog that Richardson “has lost the capacity to control, once his strongest asset.” He says Richardson “started losing touch with New Mexicans when he decided to run for President two years ago and lost interest in local affairs,” and the “humiliating withdrawal from the Commerce job under the withering glare of the U.S. Attorney’s office … has made closeness to Richardson a net drag, not an asset.”

NMI’s Matt Reichbach has on his own blog a partial transcript of Richardson’s Monday press conference, and it’s an interesting read. And The Santa Fe New Mexican’s Steve Terrell loads up his blog this morning with several interesting links related to the situation.

One aide to Bill Richardson goes so far as to tell WaPo reporters that it was the Obama team that “missed the boat on it.”

Meanwhile, Steve Terrell of the Santa Fe New Mexican has a story on CDR Financial Products, the California firm at the center of the federal inquiry.

And while no one knows what is going to happen, some on the blogosphere are coming out with predictions of what may come next, and it doesn’t look pretty.

Matt Brix, policy director for the Center for Civic Policy, tells the Independent he’s hopeful that the ongoing federal investigation into how CDR Financial Products won more than $1.4 million in state contracts could lead to new momentum for enacting ethics reform legislation in New Mexico.

“I certainly hope the Legislature will see fit to approve much-needed ethics reforms like contribution limits, an independent ethics commission and an expansion of public financing,” Brix wrote in an e-mail to NMI. “After all, New Mexico is one of the last remaining states without contribution limits and independent oversight of both the executive and legislative branches.”

Brix has lobbied for both in recent years, only to come up empty despite strong public support. Asked why he thinks New Mexico politicians have been resistant to basic reforms like contribution limits — or even a more ambitious system of public financing of campaigns — as a way to assure a cynical public that big moneyed interests don’t always control the political process, Brix gave the following explanation:

It’s been difficult because ethics reform is fundamentally about changing the rules of the game. Well-positioned elected leaders have not been interested in changing the rules of the game over the last several legislative sessions. Advocates have had a particularly difficult time advancing reforms like contribution limits, an independent ethics commission and public financing in the Senate.