Governor withholds records on CDR
Pay-to-play probe: Officials cite grand jury investigation in denying documents regarding L.A. firm

Steve Terrell and Kate Nash | The New Mexican
Posted: Friday, January 30, 2009
- 1/31/09
     
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Gov. Bill Richardson's office is refusing to release documents requested by The New Mexican regarding its dealings with CDR Financial Products, the Los Angeles firm at the center of a federal grand jury investigation.

One request was for any and all records of a May 2004 trip to meet CDR officials by Richardson's then-chief of staff Dave Contarino and David Harris, who at the time was executive director of New Mexico Finance Authority. The request also sought any correspondence between the Governor's Office and CDR in May 2004.

Earlier this month, Bloomberg.com news reported that prosecutors were inquiring about a trip that Contarino and Harris took to Los Angeles in May 2004 after a state bond sale.

Bloomberg quoted unnamed sources as saying that Contarino and Harris met with CDR officials, attended a Los Angeles Lakers basketball game and ate dinner at the Palm restaurant, a posh Los Angeles steakhouse.

"Your request is denied," wrote Marcie Maestas, Richardson's records custodian. "You have requested documents that relate to a matter that is currently before a grand jury. The office is prohibited from releasing records of this nature pursuant to the federal rules governing grand juries. There are countervailing public policy considerations that warrant denial of your request as well, including, but not limited to this office's effort to cooperate and not unduly interfere with the federal grand jury investigation."

The office sent an identical response to another reporter's request, which didn't specify a time frame for any correspondence between the Governor's Office and CDR.

CDR was paid nearly $1.5 million for work it did for the finance authority related to Governor Richardson's Investment Partnership, a bond-funded program of transportation projects.

Richardson's political action committees received about $110,000 from CDR.

Although the Governor's Office's said it couldn't release any documents related to the grand jury investigation, last week Bloomberg.com published an article based on information from a Sept. 22 subpoena from the grand jury, "obtained from the governor's office under the state's open records law."

Asked why Richardson's office could give that information, directly related to the grand jury, and not the documents requested by The New Mexican, Richardson spokesman Gilbert Gallegos replied in an e-mail, "Your requests were different than the request from Bloomberg."

The subpoena, Bloomberg reported, shows "the grand jury's interest in the roles that former Richardson chief of staff David Contarino, political adviser Michael Stratton, and JPMorgan Chase & Co. banker Chris Romer may have played in the hiring of CDR Financial Products Inc."

Contarino and Stratton have declined to comment on the investigation.

Leonard DeLayo, executive director of the New Mexico Foundation for Open Government, said the state Open Records Act has some exemptions in regard to documents that are part of a criminal investigation. But he said he's not sure whether the law would apply to the documents requested by the newspaper. He said he would know more after studying the requests and responses.

Told about Richardson's office providing Bloomberg with a grand jury subpoena, DeLayo said, "That kind of amazes me."

Meanwhile, the Lieutenant Governor's Office said in a response to a similar document request, that it "does not maintain any records that pertain to your request."

The New Mexico Finance Authority responded to a request for records by saying it had located "some of your requested documents" but that the agency needed more time to continue looking for additional documents.

While the letters don't provide any clues as to what communication, if any, took place between the company and state government, another request by The New Mexican did yield one answer. The paper asked for a copy of any contract between CDR and the Department of Finance and Administration, or consultant fees paid to the company by the department in the past 10 years.

DFA records custodian Nicole Gillespie wrote that for the period of Jan. 5, 1999 to Jan. 5, 2009, the department had no record of any contract between it and CDR, nor of any payment to the California firm made by a state agency.

The agency reviews state professional services contracts. But Gillespie said that not all agencies have their professional services contracts reviewed by the department's Contracts Review Bureau or have their payment vouchers and payments approved by the department's Financial Control Division.

She went on in her letter to point out that the New Mexico Finance Authority, in particular, is exempt from state statues that require review and approval by the Contracts Review Bureau and Financial Controls Division.

Besides the work that CDR did for the New Mexico Finance Authority, the only other known work the company has done for the state was for The University of New Mexico in 2002 and 2003. A UNM spokeswoman confirmed this month that CDR is mentioned in some documents the university gave to the U.S. Justice Department in response to a subpoena from a federal prosecutor in New York in September. CDR was paid $56,000 by UNM in November 2002 for its bond work.

That subpoena apparently is unrelated to the work of the Albuquerque grand jury. National financial publications reported that the UNM subpoena was part of a wide-scale Justice Department investigation into interest-rate swaps and contracts to invest bond-sale proceeds.

Requests by The New Mexican to the city and county of Santa Fe for any correspondence between those local governments and CDR did not turn up any information.

Contact Steve Terrell at 986-3037 or sterrell@sfnewmexican.com. Contact Kate Nash at 986-3036 or knash@sfnewmexican.com.






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