Bloomberg advances the ball a bit on the progress of the federal investigation in New Mexico into CDR Financial Products, which derailed Bill Richardson’s bid to be Commerce Secretary.
It sounds like the probe is focusing on Richardson’s former top aide. Reports Bloomberg:
A witness who testified before a federal grand jury in Albuquerque last month said he was asked if David Contarino, the former chief of staff, ordered New Mexico Finance Authority officials to hire Beverly Hills, California-based CDR Financial Products Inc. Another person familiar with the investigation said Contarino, 47, 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, who managed Richardson’s presidential run last year, released the following statement:
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,” Contarino said in an e-mail statement. “In all of my actions, I acted appropriately and I am confident that the investigation will bear out that fact.
Bloomberg also raises preliminary questions about another Richardson aide:
Michael Stratton, a senior political adviser to Richardson, lobbied the authority on CDR’s behalf, [Finance Authority CEO Bill] Sisneros said.
Stratton was also paid $269,000 by JPMorgan Chase & Co. in 2003 and 2004 to help win public finance business in New Mexico, according to Municipal Securities Rulemaking Board records. JPMorgan served as lead underwriter on about $1 billion of transportation bond deals for Richardson’s transportation program.
And Bloomberg adds additional detail about how CDR got one of the contracts under issue in the first place. In a nutshell, after CDR’s 2003 bid received the second top score, the then-chief financial officer of the finance agency recommended splitting the job between the top two candidates.
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 of the New York companies Salomon Smith Barney Inc., a unit of Citigroup Inc., and 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 job. The agency gave the swap adviser assignment to CDR, which received the same score as the Smith Barney/Ryan Labs team on the swap section of the proposals, authority records show.