Catastrophe - Dick Morris [113]
But it appears that Governor Richardson may also have been in the pay-to-play game—and that he, like Ed Rendell, may have favored a California financial firm with some important New Mexico state business at a time when that firm’s leader was arranging to send more than $100,000 in campaign contributions his way.413
On March 19, 2004, CDR Financial Products of California—the same firm that gave Ed Rendell $45,000—was approved by the State of New Mexico to advise it on complex bond swaps. Six days later, according to the New Mexico Independent, its chief, David Rubin, gave the Democratic Governors Association—chaired by Bill Richardson—a $10,000 donation.414 Three months later, another firm controlled by Rubin gave $75,000 to a PAC controlled by Richardson.415 Later that same year, Rubin gave $25,000 to another Richardson PAC, Moving America Forward.416 As the Independent reports, “over the same time period CDR [Rubin’s firm] pocketed more than $1 million from the state.”417
Richardson hired Rubin and his firm to advise him on how to raise $1.5 billion for road and rail construction in his state. Rubin’s firm made $1.5 million (1 percent of the deal) for this advice.418
In 2006, CDR and two other firms were raided by the FBI. By January 2008, they were under investigation by the Justice Department, the Internal Revenue Service, and the Securities and Exchange Commission.419
With this investigation pending, with FBI having raided CDR, and with the money trail leading straight to the governor, how on earth could Obama even have considered him as a potential commerce secretary?
It’s bad enough that Richardson’s name had surfaced in connection with a pay-to-play scandal involving bond issues. But he may really have crossed the line if it turns out, as has been alleged, that he tried to corrupt the state auditing process—the very protocol that is intended to prevent corruption in the state’s bookkeeping.
From 1998 to 2003, before Richardson became governor, the firm of Meyners & Company handled a quarter of a million dollars in state auditing work. After Richardson’s election, however, the firm’s fortunes took a turn for the better. From 2003 to 2008, it won “nearly $7.8 million in public auditing contracts,” according to the New Mexico Independent.420
How did Meyners manage to collect such a windfall of new work? Ask the head of the firm: Bill Richardson’s friend Bruce Malott, who served as the treasurer of Richardson’s 2002 gubernatorial primary campaign. Another principal at Malott’s firm, Reta D. Jones, had served as his campaign treasurer in the 2002 general election; she filled the same position in his 2006 reelection campaign and his 2008 presidential campaign. Jones is now chair of the State Lottery Authority; Malott has been appointed to the New Mexico State Retiree Health Care Authority, the Education Retirement Board, and the New Mexico Public Accountancy Board (from which he retired at the end of 2008).421
In all, Malott’s firm conducted almost one hundred audits of state agencies, passing out clean bills of health to nearly every one. But some of the recipients of Malott’s firm’s blessing were later found to have been knee deep in corruption.
For example, Meyners failed to notice that the Region III Housing Authority, a state agency it audited, was so shaky financially that it defaulted on $5 million in bonds it owed the state.422 It also failed to notice abuses at another state housing agency—abuses so extensive that they’ve led to a grand jury investigation by the state attorney general. A 2006 State Investment Council report “revealed widespread misuse of the bond money [by the housing agency,] a number of questionable expenditures and transactions and an extreme lack of documentation for financial records—documentation that was never kept or was taken or destroyed,” according to the New Mexico