Gov. Bill Richardson's office Thursday would neither confirm nor deny reports the governor has hired a lawyer to represent him in a grand jury investigation over a possible "pay-to-play" scheme involving a state transportation and highway program.

KRQE, Channel 13, reported Wednesday that Richardson had hired Albuquerque lawyer Peter Schoenburg as his legal counsel in the grand jury case. The grand jury, as reported by The Associated Press and other news organizations this week, is looking into a possible connection between a Beverly Hills, Calif., financial company's large contributions to Richardson political action committees and nearly $1.5 million the company received for work on a state road-building program.

Schoenburg, who was not in his office Thursday, couldn't be reached for comment.

Richardson's spokesman, Gilbert Gallegos, responded, "No Comment," when asked whether the governor had hired Schoenberg. Asked by e-mail whether the news report was false, Gallegos responded, "I'm not confirming anything. I have no comment."

Schoenberg represented former Albuquerque Mayor Ken Schultz in the Albuquerque Metro Court corruption case, which led to the conviction of former state Senate leader Manny Aragon. Schultz took a plea deal, agreeing to testify against Aragon and others in that case. Schultz has yet to be sentenced.

Richardson, who is President-elect Barack Obama's nominee for U.S. commerce secretary, has not answered media questions about the grand jury case. Gallegos has issued a statement saying the governor is aware the federal government is investigating, and he expects members of his administration to cooperate.

The New Mexico Finance Authority in 2004 awarded a contract to CDR Financial Products Inc., making it part of a team of financial consultants that would put together a bond-financing deal for GRIP (Governor Richardson's Investment Partnership), a state road-building program.

The Associated Press reported in August that CDR and its chief executive officer, David Rubin, contributed at least $110,000 to three political action committees formed by Richardson.

A person familiar with the proceedings told The Associated Press this week that the grand jury is looking into dealings between CDR Financial Products and someone in a position to push the contract through with the state of New Mexico. The source asked not to be named because the proceedings are secret.

The grand jury follows an FBI probe in which agents sought documents from the NMFA. The FBI interviewed former and current authority officials about New Mexico's 2004 contract with CDR for the $1.6 billion transportation program.

A CDR spokesman this week denied any connection between the contributions and the state contract.

Contact Steve Terrell at 986-3037 or sterrell@sfnewmexican.com.