Reports that the U.S. Justice Department has decided not to seek indictments of Gov. Bill Richardson and his top aides in an alleged pay-to-play scheme have pundits speculating on Richardson's future — and how the news will effect the state's political landscape.

The Associated Press, quoting two unnamed sources "familiar with the case," reported that the Justice Department decided against pressing charges against Richardson and others in the investigation of CDR, a California firm that made about $1.5 million for handling state transportation bonds about the same time it donated $110,000 to Richardson's political action committees.

"It's over. There's nothing. It was killed in Washington," one of the sources told The Associated Press on Thursday.

Justice Department spokeswoman Laura Sweeney on Thursday declined to confirm or deny the report or to answer questions about the investigation.

The Governor's Office on Thursday released a statement saying that Richardson had not been notified that the investigation was over. However, the news release went on to say, "Gov. Richardson has known all along that neither he nor any staff members committed any transgressions during their successful fundraising back in 2004. The U.S. Attorney's thorough and lengthy investigation has apparently determined the same thing — that no indiscretions occurred.

"Although patience was difficult while Gov. Richardson and his administration were being falsely accused and were the subject of rumors and speculation through the news media, Gov. Richardson chose to remain silent and let the justice system run its course," the statement said. "Gov. Richardson is gratified that this year-long investigation has ended with the vindication of his administration."

The investigation cost Richardson a Cabinet appointment. In January, just weeks after Barack Obama, then president elect, nominated him for secretary of commerce, Richardson withdrew the nomination. Richardson said at the time the CDR investigation would hold up his confirmation hearings in the Senate.

What next for Richardson?

After Richardson withdrew his Cabinet nomination, Larry Sabato, director of the Virginia Center for Politics, told The New Mexican, "If Richardson is cleared, it's very likely he'll join the Obama administration at some point after his term as governor ends."

On Thursday, Sabato stood by that prediction. "I still think that's likely as long as Richardson wants to do further public service," Sabato said in an e-mail. "Given his long diplomatic résumé, it makes sense that he would be called upon at some point by Obama."

Obama himself raised the possibility in January after Richardson withdrew his nomination for secretary of commerce. "Although we must move quickly to fill the void left by Gov. Richardson's decision, I look forward to his future service to our country and in my administration."

Lonna Atkeson, a political science professor at The University of New Mexico, agreed that some kind of job with the Obama administration is a real possibility, though she predicted Richardson would finish the remaining 16 months of his term as governor.

Atkeson said to expect seeing Richardson's face more and more on the cable news shows. "He'll be putting himself more and more in the public eye." She noted that the governor's appearances on national television decreased greatly after the CDR investigation forced him to withdraw his Cabinet nomination.

But longtime New Mexico pollster Brian Sanderoff on Thursday noted that there still are other federal investigations of New Mexico state government investments, and until it's certain that Richardson and other administration figures will not be implicated in any of these cases he won't be getting any high-level appointments.

Federal prosecutors have subpoenaed documents from the State Investment Council and Educational Retirement Board dealing with Aldus Equity, a Dallas company at the center of an investment scandal in New York. Aldus advised those New Mexico agencies on investments. There's been no indication that Richardson or other New Mexico officials are targets in the investigation.

"I don't see (a federal position for Richardson) happening immediately," Sanderoff said. But assuming there are no legal bombshells in the governor's future, Sanderoff said he could envision Richardson getting special assignments from the Obama administration as a special envoy or special emissary.

But Sabato noted that a diplomatic appointment might be politically tricky. "It's doubtful that (Secretary of State) Hillary Clinton will be asking him to undertake any missions! One gets the clear sense that the Clintons are still very sore at Richardson for his endorsement of Obama last year."

The ripple effect

Sanderoff said Thursday that besides Richardson, Contarino and others who were under investigation, the chief beneficiary of the news that there will be no indictments is Lt. Gov. Diane Denish, who is running for governor.

Denish in a written statement said, "Assuming news reports are accurate this is good news for the people of New Mexico. But the fact remains that public confidence has been eroded by the numerous investigations into possible wrongdoings by other government officials. We need strong ethics reform to make state government more open and accountable and I will continue to lead that fight."

Republicans will still stress the corruption issue, Sanderoff predicted, "but an indictment of Richardson and his top aides would have made it a lot tougher on her," he said. "Clearly part of (the Republican) strategy is to link Denish to Richardson. An indictment would have been a very dark, dark shadow."

Atkeson also said she expects state Republicans to keep hitting the corruption issue in 2010 because of the sheer number of past and present state officials, all Democrats, to be implicated in corruption cases in recent months. Former state treasurers Robert Vigil and Michael Montoya and former state Senate powerhouse Manny Aragon have been convicted on corruption charges.

Former Secretary of State Rebecca Vigil-Giron, Public Regulation Commissioner Jerome Block Jr. and former affordable housing official Vincent "Smiley" Gallegos are facing criminal charges. All maintain their innocence.

"It's a legitimate issue," said Atkeson. But she said to make it work the Republicans would have to stay focused on that issue and not start attacking each other.

State Republican Party Chairman Harvey Yates on Thursday said the apparent decision not to prosecute Richardson raises questions whether the decision was based on political consideration on the part of the Obama administration. "Did Obama's political appointees dispute the results of the FBI investigation?" In an interview, he called on the government to make public the FBI and U.S. Attorney files in the case.

State Democratic Party executive director Josh Geise responded in his own statement, saying Yates was trying to politicize the case. "The fact is the U.S. Attorney's Office sent the case to the Department of Justice in Washington, as is customary in high-profile cases — without any recommendation — despite a year of investigations, countless subpoenas, and multiple grand juries. In short, this is a total vindication of Governor Richardson and his senior advisers who have been subjected to a year of unfounded rumors, leaks and attacks. Enough politics!"

Contact Steve Terrell at 986-3037 or sterrell@sfnewmexican.com. Read his political blog at roundhouseroundup.com.