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Discussion Starter · #1 ·
Is Richardson the next pay-for-play star?

posted at 1:44 pm on December 15, 2008 by Ed Morrissey


According to Bloomberg, federal investigators have begun an investigation into Bill Richardson's connections to a consultancy already linked to a pay-for-play scandal in Alabama. Richardson, selected by Barack Obama for Secretary of Commerce, may have directed state funds to CDR in exchange for political work at the 2004 Democratic convention and in voter-registration efforts in support of Richardson's re-election as governor (via Jim Geraghty):
A federal grand jury is investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in U.S. history, did similar work in New Mexico after making contributions to Governor Bill Richardson's political action committees.
The grand jury in Albuquerque is looking into Beverly Hills, California-based CDR Financial Products Inc., which received almost $1.5 million in fees from the New Mexico Finance Authority in 2004 after donating $100,000 to Richardson's efforts to register Hispanic and American Indian voters and pay for expenses at the Democratic National Convention in 2004, people familiar with the matter said.
The Federal Bureau of Investigation asked current and former officials from the state agency if any staff members in the governor's office influenced CDR's hiring, said the people, who declined to be identified because the proceedings are secret. Richardson, who is President-elect Barack Obama's designate for Commerce Secretary, has a staff of at least 30 people.
"They're looking at everything related to CDR," William Sisneros, the finance agency's chief executive officer, said of the FBI probe. "They're just trying to evaluate all the relationships to see what CDR was doing for the money."
CDR was linked to the Birmingham scandal and the indictment of Mayor Larry Langford on corruption charges. Langford solicited hundreds of thousands of dollars from bond underwriter Blount Parrish & Co, and CDR advised Langford on the transactions. Blount Parrish managed to secure over seven million dollars in these bond services to Jefferson County, a hefty take from the $235,000 Langford demanded in loans, clothes, and jewelry.
Apparently, federal investigators have discovered a booming market in municipal-bond corruption. The empanelment of a grand jury in New Mexico means that the investigation has reached the stage where criminal charges could get produced. They may not have a difficult time in finding connections, either. CDR's president donated tens of thousands of dollars to a Richardson PAC as well as to Si Se Puede Boston 2004, which helped fund the Democratic convention while Richardson chaired the committee that ran it. The payment to Moving America Forward came in 2003, before their selection as a consultant to the state, while their donation to Si Se Puede Boston 2004 apparently came shortly afterward.
Obama hardly needs another scandal associated with his close advisers. He's already got his chief of staff backpedaling and stonewalling over the Blagojevich pay-for-play scandal, and now one of his Cabinet secretaries has links to another corruption probe. Most presidents go through two entire terms without having this many links to political payoffs, and Obama hasn't even taken the oath of office yet.

OOPS.......Again!
 

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Discussion Starter · #3 ·
Didn't mean to brek you away from your high class left wing bilge.

Hot Air posts are always so well sourced it probably confuses you cool aid drenched mind.......

Heres the bloomberg article since you can't seem to follow a link!

Grand Jury Probes Richardson Donor's New Mexico Financing Fee
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By Martin Z. Braun and William Selway


Dec. 15 (Bloomberg) -- A federal grand jury is investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in U.S. history, did similar work in New Mexico after making contributions to Governor Bill Richardson's political action committees.
The grand jury in Albuquerque is looking into Beverly Hills, California-based CDR Financial Products Inc., which received almost $1.5 million in fees from the New Mexico Finance Authority in 2004 after donating $100,000 to Richardson's efforts to register Hispanic and American Indian voters and pay for expenses at the Democratic National Convention in 2004, people familiar with the matter said.
The Federal Bureau of Investigation asked current and former officials from the state agency if any staff members in the governor's office influenced CDR's hiring, said the people, who declined to be identified because the proceedings are secret. Richardson, who is President-elect Barack Obama's designate for Commerce Secretary, has a staff of at least 30 people.
"They're looking at everything related to CDR," William Sisneros, the finance agency's chief executive officer, said of the FBI probe. "They're just trying to evaluate all the relationships to see what CDR was doing for the money."
Nationwide Investigation
The investigation reflects another front in nationwide efforts by U.S. prosecutors to investigate so-called pay- to-play in the municipal bond market. The term refers to banks and advisers who make political contributions or personal gifts to public officials in return for fee-paying financing assignments.
On Dec. 1, Birmingham, Alabama's mayor, Larry Langford, was charged by federal prosecutors with soliciting $235,000 in loans, expensive clothes and jewelry from Montgomery, Alabama-based bond underwriter Blount Parrish & Co. Langford, the former president of the Jefferson County Commission, included the firm on bond and derivative deals that netted it about $7.1 million. CDR, which wasn't named in that indictment, advised Jefferson County on the derivatives.
The New Mexico probe comes two years after the FBI searched CDR's offices as part of a nationwide investigation into whether banks and advisers conspired to overcharge local governments on financing deals. That probe by the New York office of the U.S. Department of Justice's Antitrust Division is ongoing, and CDR says it is cooperating.
No Complaints
A company spokesman denied wrongdoing in New Mexico.
"To suggest that there's a pay for play element is just inaccurate," said CDR's Allan Ripp. "There was no involvement by the governor. CDR knows for certain that they were selected on the basis of their track record."
New Mexico finance authority officials haven't complained about the company's advisory work.
Richardson, a 61-year-old Democrat, is a former U.S. Energy Secretary who ran for president in 2008. He served 15 years in Congress and was the U.S. ambassador to the United Nations in 1997-98. He was a consultant to Salomon Smith Barney Inc., a unit of New York-based Citigroup Inc., from July 2001 to January 2003.
Elected New Mexico's governor in 2002 and re-elected in 2006, Richardson appoints five directors to the New Mexico Finance Authority's 12-member board, including the chairman. Five other directors are members of his cabinet.
CDR's Contributions
CDR made $1.48 million advising the authority on interest-rate swaps and restructuring escrow funds for $1.6 billion of transportation bonds issued by the agency, according to state records.
Interest-rate swaps are derivatives, or contracts whose value is derived from assets including stocks, bonds, currencies and commodities, or from events such as changes in interest rates or the weather. Borrowers use them to lower costs and reduce their exposure to swings in interest rates.
In October 2003, CDR President David Rubin gave $25,000 to Moving America Forward Inc., a political action committee formed by Richardson, disclosure forms show. Seven months later, CDR, known then as Chambers, Dunhill, Rubin & Co., gave $75,000 to ¡Si Se Puede! Boston 2004 Inc., formed to help pay expenses at the 2004 Democratic National Convention in Boston, where Richardson was chairman.
Cooperation Expected
"The Governor's Office is aware of questions surrounding some financial transactions at the New Mexico Finance Authority," said Gilbert Gallegos, a spokesman for Richardson. "We expect any state agency that is approached with federal officials" to cooperate, he said, declining to comment further. Calls to Richardson were directed to Gallegos.
Darrin Jones, an FBI spokesman, declined to comment, as did Norman Cairns, a spokesman for the U.S. Attorney's office in Albuquerque. CDR's lawyer, Richard Beckler, a partner at Howrey LLP in Washington, declined to comment. Obama spokeswoman Jen Psaki declined to comment.
A member of the agency's board, Craig Reeves, said he was asked by federal agents about hiring CDR and whether the donations had any role.
'Many Things Discussed'
"That was one of many things we discussed," he said, declining to comment on the specific scope of the investigation. He said no one at the governor's office discussed retaining CDR with him when the decision was made.
One of the people called to testify before the Albuquerque grand jury said federal investigators asked if Richardson's office directed the state agency to select CDR. Investigators also asked about how responses to a request for investment advisory services were scored.
Another person familiar with the probe said the thrust of the investigation is whether people in Richardson's office influenced the selection of CDR. The person said the U.S. Attorney identified subjects of the investigation, not targets, which means prosecutors have yet to gather substantial evidence linking anyone to a crime.
To be charged with a felony, a person has the right to be indicted by a grand jury, the U.S. Constitution says. The panel of 16 to 23 people is meant to act as a buffer between prosecutors and their suspects, said James Montana, a former federal prosecutor and partner with Chicago-based law firm Vedder Price.
Grand Jury
Acting in secrecy mandated by law, grand juries review documents and hear evidence from victims, witnesses and occasionally the subjects of the investigation.
While the Justice Department will sometimes give a target notice of an investigation and invite that person to appear, neither step is required and such appearances are "extremely rare," said Montana. To indict, 12 of the grand jurors must agree there is probable cause a crime was committed.
CDR advised the New Mexico Finance Authority on the purchase of swaps from New York-based Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., JPMorgan Chase & Co., UBS AG of Zurich and Royal Bank of Canada in Toronto as part of Richardson's $1.6 billion transportation proposal in 2003.
GRIP Bonds
Richardson's plan -- known as GRIP, Governor Richardson's Investment Partnership -- called for refinancing more than $400 million of the state's existing transportation debt and selling new bonds through the finance agency to pay for improvement projects. CDR earned $951,566 for advising on derivatives tied to the bond issues and $443,265 for restructuring the escrow funds of the refunded bonds, agency documents show.
David Harris, the executive director of the state finance agency when the interest-rate swaps were done, was Richardson's deputy chief of staff before he was appointed to the agency. He was also interviewed by the FBI, said Paul Kennedy, his lawyer. Kennedy declined to comment further.
CDR was hired after responding to a Dec. 30, 2003, request for proposals from the New Mexico Finance Authority for investment advisory services.
Splitting the Mandate
Six companies answered the request, which contained two questions out of 39 items related to experience with interest-rate swaps and guaranteed investment contracts. A joint venture from Smith Barney and New York-based Ryan Labs Inc. received the top score of 99 percent. CDR had the second-highest score of 97 percent, authority records show.
Rather than select the Smith Barney/Ryan Labs team as both investment and swap adviser, the authority's then- Chief Financial Officer, Keith Mellor, recommended splitting the mandate. The agency gave the swap adviser job to CDR, which received the same score as the Smith Barney/Ryan Labs team on the swap section of the proposals, authority records show.
The chair of the committee that recommended CDR's selection, Rick Homans, declined to comment. At the time, Homans was the Secretary of New Mexico's Economic Development Department. He now serves as the secretary of the Taxation and Revenue Department.
IRS, SEC
In a March 10, 2004, memo to the finance authority's board, Mellor said the agency chose CDR as swap adviser because it specialized in assisting state and local governments, including the University of New Mexico, with derivatives. The authority's board approved the selections at its meeting later that month.
"It may not be surprising that the state would have split the assignment based on what they measured or assessed to be respective strengths," CDR spokesman Ripp said.
CDR, which Rubin founded in 1986, has been involved in investigations by the Internal Revenue Service, Securities and Exchange Commission and Department of Justice into whether banks and brokers conspired to rig bids on municipal derivatives and profit from deals at the expense of U.S. taxpayers.
The IRS probed whether CDR and banks including Charlotte, North Carolina-based Bank of America Corp. and the former Bear Stearns Cos. of New York conspired to overcharge municipalities such as Atlanta; Fargo, North Dakota; and Johnson City, Tennessee, for contracts to invest bond proceeds and then split the profits.
Philadelphia Fees
In 2002, Bank of America fired an employee in its municipal derivatives department after he told his manager that he paid $182,393 to CDR and two rival banks and another adviser on transactions in which they played no role, according to records from the NASD and North Carolina's state court in Mecklenburg County.
Bank of America said in February 2007 it would cooperate with the Justice Department in its national investigation of bid-rigging and price fixing in the municipal derivatives market.
CDR also advised states and local governments on the purchase of interest-rate swaps.
In April 2001, CDR hired Ron White, a bond lawyer and chief fundraiser for Philadelphia Mayor John Street, as a consultant, paying him a $5,000 retainer to help the company win business with the city. Rubin donated $15,000 to Street between December 2000 and June 2003, according to Pennsylvania state filings.
'Move Fast Forward'
In addition, CDR gave White three tickets to the 2003 Super Bowl in San Diego and provided a limo ride to the game. White brought along Philadelphia treasurer Corey Kemp, according to a federal criminal indictment brought against White and Kemp in 2004.
On Feb. 11, 16 days after the game, Kemp told White that city Finance Director Janice Davis agreed to "move fast forward" on a $150,000 swap advisory contract for CDR, according to transcripts of FBI wiretaps.
Banks paid CDR, which wasn't accused of wrongdoing, at least $515,000 from profits they earned on transactions with the city, documents show.
"The firm has never participated in any pay for play," CDR's Ripp said. "Contributions are publicly disclosed. The firm contributes to candidates and campaigns it supports."
Mayor Arrested
CDR also was paid $1.8 million to advise Jefferson County, Alabama, on more than $5 billion of interest-rate swaps, meant to lower borrowing costs on $3.2 billion of sewer bonds.
A combination of soaring rates on the bonds and interest-rate swaps is threatening the county with a bankruptcy that would exceed Orange County, California's default in 1994. Jefferson County paid JPMorgan and a group of banks $120.2 million in fees for derivatives that were supposed to protect it from the risk of rising interest rates.
Those fees were about $100 million more than they should have been based on prevailing rates, according to James White, an adviser the county hired in 2007, after the SEC said it was investigating the deals.
Ripp has said CDR stands by the pricing of the swaps and said White's estimates were incorrect because they didn't take into account the county's credit profile, collateral provisions between the county and the banks and the precise time of the derivative trades.
Proud of Work
CDR's Ripp declined to comment on the arrests in Jefferson County, saying "the firm is certainly proud of its work for the county." Langford, the Birmingham, Alabama, mayor, has denied wrongdoing in connection with the county's bond deals. Langford's attorney, Thomas Baddley, didn't return a call seeking comment. A telephone call to William Blount, the chairman of Blount Parrish & Co., wasn't immediately returned Sunday.
The IRS challenged the tax exemptions on municipal bond deals that CDR worked on, including one for a New Mexico housing agency, and proposed the bonds be subject to federal income tax. The IRS said in April 2007 that the company pocketed fees drawn from earnings on invested bond proceeds that should have been paid to the U.S. Treasury.
"As in all lease-to-own transactions, this was a unique, customized structured financing that was vetted and scrutinized closely by bond counsel as well as the issuer and all deal participants," CDR has said.
'Massive Boxes'
In September 2007, CDR settled allegations by the SEC that it committed securities fraud for failing to disclose that it received secret fees on Florida bond deals from New York-based American International Group Inc., the insurer rescued this year by the Federal Reserve in Washington. CDR and AIG neither admitted nor denied wrongdoing.
In New Mexico, the finance agency was first contacted by the FBI in August, said Sisneros, who was appointed after the CDR deals were done.
The agency, which is cooperating, has given investigators "massive boxes" of documents related to the bond and swap deals, he said. Investigators called with follow-up questions as recently as three weeks ago, said Rey Romero, the agency's general counsel.
Sisneros and board chairman Stephen Flance, a developer, met with investigators in August.
"None of the board members are under suspicion as far as I know," said Flance, who said he hadn't been subpoenaed.
To contact the reporters on this story: Martin Z. Braun in New York at [email protected]; William Selway in San Francisco at [email protected].
Last Updated: December 15, 2008 00:01 EST
 

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In New Mexico, the finance agency was first contacted by the FBI in August, said Sisneros, who was appointed after the CDR deals were done.
The agency, which is cooperating, has given investigators “massive boxes” of documents related to the bond and swap deals, he said. Investigators called with follow-up questions as recently as three weeks ago, said Rey Romero, the agency’s general counsel.
Sisneros and board chairman Stephen Flance, a developer, met with investigators in August.
“None of the board members are under suspicion as far as I know,” said Flance, who said he hadn’t been subpoenaed. (quote)


How is Richardson culpable for a donation? Did you rant when Enron gave heavily to Bush? Was Bush responsible for investigating each contributor? As usual its just another puppet rant.
 

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Discussion Starter · #9 ·
The theses:

According to Bloomberg, federal investigators have begun an investigation into Bill Richardson's connections to a consultancy already linked to a pay-for-play scandal in Alabama. Richardson, selected by Barack Obama for Secretary of Commerce, may have directed state funds to CDR in exchange for political work at the 2004 Democratic convention and in voter-registration efforts in support of Richardson's re-election as governor (via Jim Geraghty):

The Topic:

Is Richardson the next pay-for-play star

The Question:
Does your senile dementia actually cause you to see Bush's name in text?
 

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The theses:

According to Bloomberg, federal investigators have begun an investigation into Bill Richardson's connections to a consultancy already linked to a pay-for-play scandal in Alabama. Richardson, selected by Barack Obama for Secretary of Commerce, may have directed state funds to CDR in exchange for political work at the 2004 Democratic convention and in voter-registration efforts in support of Richardson's re-election as governor (via Jim Geraghty):

The Topic:

Is Richardson the next pay-for-play star

The Question:
Does your senile dementia actually cause you to see Bush's name in text?
What the article actually says on Bloomberg:

Grand Jury Probes Richardson Donor's New Mexico Financing Fee
Email | Print | A A A

By Martin Z. Braun and William Selway

Dec. 15 (Bloomberg) -- A federal grand jury is investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in U.S. history, did similar work in New Mexico after making contributions to Governor Bill Richardson's political action committees.

2. Bush was not mentioned. I mentioned him as a example of how a donor to a politician does so without investigation...eg Enron to Bush. Sorry it required thought.

Note the Bloomberg article does not say the FBI is investigating Richardson. The contribution went to PAC's. Your lie skewed it to say that Richardson was under FBI investigation.
 

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Until he is out of office he is the representative of the Republican Party. You remember them....three Republican Presidents = A depression. Ong GWB = a massive recession the bottom to which has not yet been plumbed. Republicans = the party the American people threw out lock stock and barrel.
 

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Discussion Starter · #15 ·
Your pointed butt is intact, he did his job.

Your text here does support the fact that you will be much more comfortable with the parsing and non answers of your messiah though.
 

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Don't know about that but I could probably do more damage with a Reebok than you could with that cute little girls gun you were so pumped up about a few months back.
 

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Discussion Starter · #19 ·
LOL, I practice twice a week.

You still haven't volunteered to back up your verbal **** and take a 380 wuss!
 

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I think pay for play could have great benefits. Think about it. You want a senate seat, it cost $50,000. the $50,000 then gets given to a charity. You want a community organizer position, $20,000. Money goes to the local food bank or red cross. You want to be a state rep. $25,000. Money goes to a public school to buy computers.

Yeah it could happen!;-):eek::D:clapping2::yes:
 
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