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.