Federal probe fuels Capitol buzz
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1/7/2009 - 1/8/09
Less than two weeks before the state Legislature starts a 60-day session, the state Capitol is a little quieter than usual.Staffers are getting in final vacation days before legislators arrive, and many interim committees have finished their work.
But that doesn't mean there isn't whispering — and plenty of it — about the federal grand jury that reportedly is looking into a possible "pay-to-play" scandal, an investigation that prompted Gov. Bill Richardson on Sunday to drop his bid to be President-elect Barack Obama's commerce secretary.
Some of the political chatter has shifted to what that means for the state's 2010 gubernatorial race.
Richardson's withdrawal means Lt. Gov. Diane Denish won't be moving into the governor's office as soon as she had planned. Some say Denish was expected to win election to the seat fairly easily, in part because of experience she would have gained this year and next.
Even though Denish hasn't been accused of any wrongdoing, Republicans seem likely to use the Richardson situation against Democrats in 2010.
State Republican Party chairman Allen Weh predicted a lively primary season in the next gubernatorial race.
"What does New Mexico want in its government? Does it want one-party corruption, or does it want transparency and accountability?" he said. "I have to believe and want to believe that at least 60-plus percent are bipartisan enough in their desire for honest government that they want accountability and will vote for it."
While Denish's main potential Republican opponent right now looks to be former U.S. Rep. Heather Wilson of Albuquerque, others are undoubtedly watching the Richardson situation.
The grand jury in Albuquerque is said to be looking into a possible connection between a Beverly Hills financial company's large contributions to Richardson political action committees and nearly $1.5 million the firm received for work on a state construction program dubbed the Governor Richardson Investment Partnership.
CDR Financial Services, like Richardson, has denied any wrongdoing.
Despite that, in the Roundhouse and beyond, the whispers continue about the developing story, about how far it reaches and how long it will last.
Richardson on Wednesday tended to his gubernatorial duties, attending a groundbreaking at a Hewlett Packard facility in Rio Rancho. Later in the day, he announced a cable and satellite network, ReelzChannel, is moving to Albuquerque.
But news on the investigation kept coming.
KRQE, Channel 13 on Tuesday night reported that Carlos Romero, a former New Mexico Finance Authority official, had been questioned by FBI agents conducting the investigation, and a grand jury later took testimony from him.
Romero declined to comment when reached Wednesday, saying, "I don't wish to talk about that at this time."
The TV station reported Romero was the state finance authority's director of intergovernmental relations four years ago and is now an associate vice president at The University of New Mexico.
Bloomberg News, meanwhile, reported that people familiar with the matter said federal prosecutors are asking if Dave Contarino, Richardson's former chief of staff, told a state agency to hire a bond adviser that donated $100,000 to Richardson political committees.
According to the news service, a witness who testified before a federal grand jury in Albuquerque in December said he was asked if Contarino ordered New Mexico Finance Authority officials to hire CDR. Bloomberg said "another person familiar with the investigation said 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 didn't return a call seeking comment Wednesday but said in a statement to the news agency that he acted appropriately. "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 the statement. "In all of my actions, I acted appropriately and I am confident that the investigation will bear out that fact."
Richardson spokesman Gilbert Gallegos also said Contarino did nothing wrong. "The governor is fully supportive of Dave Contarino and is confident that he always acted ethically and appropriately during his time as chief of staff," Gallegos said in a statement. Dave was a key part of the progress in New Mexico under Governor Richardson's leadership."
Also on Wednesday, the Denver Post reported on two other political figures apparently involved in the controversial bond contracts, longtime Richardson friend and consultant Mike Stratton, and Colorado state Sen. Chris Romer.
Neither have been accused of wrongdoing.
The Post cites a story by Bloomberg News saying Stratton was paid $269,000 in 2003 and 2004 by JPMorgan Chase to help win public-finance business in the state.
According to the Post, "the banking giant was the financier that underwrote the bulk of the $1.6 billion in bonds that are part of a reported grand jury investigation of whether political contributions netted state business."
Romer was the lead banker for JPMorgan on the bond deals, according to the Post. He was contacted by the office of the U.S. Attorney for New Mexico, Greg Fourrat, the paper said.
"I voluntarily interviewed with federal investigators last fall," Romer told the paper.
Neither Stratton, Romer's office or the U.S. Attorney's Office returned calls seeking comment Wednesday.
Contact Kate Nash at 986-3036 or knash@sfnewmexican.com. Read her blog at www.greenchilechatter.com.
