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Friday, August 27, 2010
Gov. Commerce Vetting Led to 2nd Probe
By Mike Gallagher
Copyright © 2010 Albuquerque Journal
Journal Investigative Reporter
Questions about whether President-elect Barack Obama's transition team was misled during the vetting process for Gov. Bill Richardson's nomination for commerce secretary were investigated by a federal grand jury that recently ended its term without returning an indictment.
Obama nominated Richardson after the November 2008 election, but the governor withdrew his name two months later in the midst of a different federal grand jury probe. That investigation involved contributions to Richardson-affiliated political organizations by a California firm that was awarded lucrative state contracts.
Documents generated as part of a heated legal battle over what evidence the grand jury in the Commerce inquiry would be allowed to review enabled the Journal to piece together the existence of that investigation.
The issue involved what information the governor and his staff had in their possession, and what they disclosed, about the ongoing contract investigation at the time Richardson went through the vetting process for Commerce.
The U.S. 10th Circuit Court of Appeals published two heavily redacted opinions on Aug. 18 dealing with several claims, including attorney-client privilege, raised by defense lawyers, in the Commerce matter.
The appeals court reversed a lower court ruling that prevented grand jurors from reviewing certain documents and information; dismissed claims of prosecutorial misconduct and affirmed the lower court's ruling that two attorneys in the case would be required to answer nine specific questions from the grand jury.
The appellate judges decided to publish the redacted opinions because of the need "to advance the law on certain issues."
"The district court's approach treads upon the grand jury's broad investigatory powers, undermines its secrecy and causes unnecessary delay, as has amply been demonstrated in this case," one of the opinions said.
All names were taken out and replaced with "Attorney #1", "Attorney#2", "employee #1" and "Subject" of the investigation. The state of New Mexico is not mentioned nor do the opinions list the names of the attorneys involved.
The appeals court noted that "the subject of the Grand Jury has filed an objection to the publication of these two opinions. Alternatively, the subject of the investigation has suggested redactions ... and reported that those suggested redactions were agreeable to the United States Attorney."
The U.S. Attorney's Office wouldn't comment. Richardson's attorney, Peter Schoenburg, didn't return a telephone message asking about the opinions, and Richardson's spokesman said in an e-mail that he didn't know anything about them.
However, several people familiar with the broad outlines of the case confirmed that the documents deal with an inquiry into information on forms required for Richardson's nomination as Obama's commerce secretary.
The forms are usually completed by the nominee's staff and/or lawyers. They require detailed information about the nominee, his family, finances, personal history and legal problems and are signed under penalty of perjury by the nominee.
The issue was the nominee's characterization of a federal investigation at that time into how a California financial firm landed lucrative business deals with the state while making political contributions to Richardson political committees in 2004.
That investigation ended last summer, also with no indictment. However, the U.S. attorney at the time wrote a letter saying the Richardson administration had corrupted the procurement process and that subjects of the investigation should not view the lack of an indictment as exoneration.
After Richardson withdrew his name from consideration for Commerce in January 2009, a brief flurry of stories followed on the national scene about whether Richardson's responses to the so-called vetting process failed to make the seriousness of the federal investigation clear to Obama's team.
Richardson's staff denied that was the case.
CDR probe
A federal investigation into how CDR Financial of California and its owner David Rubin obtained a bond advisory contract with the New Mexico Finance Authority in 2004 became public in the late summer of 2008.
The probe focused on bid procedures used by the finance authority to award CDR contracts and their relationship to political donations made by Rubin and his company to Richardson political committees at or near the time the company got the contracts.
By the time the New Mexico investigation became public in 2008, CDR and Rubin had been under investigation by several federal law enforcement and regulatory agencies for years.
Richardson's office was served with a grand jury subpoena for records in late September 2008.
The Governor's office later provided the Journal with a copy of the subpoena in response to a public records request and that document provided an official glimpse into the scope of the investigation.
The subpoena sought any correspondence between CDR officials and top Richardson advisers. It didn't make clear who, if anyone, was the target of the investigation.
The subpoena also asked for records concerning political contributions to Richardson's gubernatorial and presidential campaigns, along with contributions made to three Richardson-affiliated political organizations: Moving America Forward, Si Se Puede Boston 2004! and the Democratic Governors Association.
A month after Richardson pulled his name from the Commerce position, then-state Democratic Party Chairman Brian Colón wrote an op-ed column published in the Albuquerque Journal criticizing the federal grand jury investigation.
Colón was board treasurer for the Moving America Forward Foundation, according to a spokesman for the Denish-Colon campaign.
It was a separate organization from Richardson's Moving America Forward political action committee to which Rubin contributed. Its purpose, according to IRS filings, was to increase voter registration and leadership training for Latinos, Hispanics and Native Americans.
The foundation never revealed the names of those who donated $1.7 million to the IRS-approved charity.
Colón is the current candidate for lieutenant governor on the Democratic ticket headed by Diane Denish, after winning his party's primary election.
Colón argued in his op-ed piece published Feb. 20, 2009, that the governor was being unfairly pursued in a politically motivated federal investigation by the U.S. attorney and provided specific details about the conduct of the investigation.
That was the CDR investigation, which ultimately led Richardson to pull his name as Obama's pick for Commerce when it became clear the FBI probe and grand jury testimony could take some time.
CDR President David Rubin and his firm contributed $110,000 to the Richardson-affiliated political groups in 2003-2004.
Colón didn't return a telephone message and his campaign couldn't reach him for comment Thursday.
The CDR investigation ended last August when the statute of limitations expired, but in a letter to attorneys for Richardson, Rubin and others, then-U.S. Attorney Greg Fouratt said the lack of prosecution should not be considered exoneration.
Fouratt went on to say the investigation revealed that CDR and its officers made substantial contributions to Richardson's political organizations while the company was seeking the work and that "pressure from the governor's office resulted in corruption of the procurement process so that CDR would be awarded such work."
At that time, that letter was called "sour grapes" by a Richardson spokesman.
Rubin and other CDR officials have pleaded not guilty in New York to wide-ranging federal charges of rigging municipal bond bids over the course of several years.
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