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Charges Against Richardson in ‘Pay to Play' Probe Unlikely

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By Carrie Johnson
Washington Post Staff Writer
Friday, August 28, 2009

The federal "pay to play" investigation that prompted New Mexico Gov. Bill Richardson (D) to withdraw his nomination as President Obama's commerce secretary is concluding with criminal charges against the governor and his top aides appearing unlikely, according to three sources familiar with the case.

Prosecutors in New Mexico sent their findings to Justice Department headquarters in Washington, where career prosecutors concluded that no indictment was warranted, said the sources, who spoke on the condition of anonymity because they were discussing a law enforcement matter.

Justice Department spokeswoman Laura Sweeney declined to comment on the status of the investigation, which was first reported by the Associated Press in New Mexico. Richardson's office also said it would have no comment.

Another legal source familiar with the criminal investigation said an agreement to extend the statute of limitations on the allegations expired Wednesday without Justice Department officials requesting more time. That signaled that indictments were no longer a possibility, the source said.

Word of the investigation broke weeks after then-Gov. Rod Blagojevich (D) of Illinois was accused of attempting to sell Obama's newly vacant U.S. Senate seat to the highest bidder. Richardson, who had been selected by Obama to lead the Commerce Department, reluctantly stepped aside in January after determining that his Senate confirmation would be slowed for months at a time when the economy was troubled.

The episode raised questions about the rigor of the Obama team's vetting process and about what Richardson had told transition officials about the severity and focus of the probe.

The FBI and a grand jury in Albuquerque have been investigating whether CDR Financial Products, a Beverly Hills-based company, received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees. CDR was paid $1.48 million for advising the authority on investment decisions in 2004.

The firm and its president, David Rubin, together gave $100,000 to Sí Se Puede and Moving America Forward, both PACs started by Richardson, shortly before winning the state contract.

Richardson, who had served as energy secretary and United Nations ambassador during the Clinton administration, had been poised to become the highest-ranking Hispanic member of the Obama Cabinet before the CDR probe intensified. Richardson's second term as governor runs through 2010, and he is prohibited from running for a third term, opening questions about his political future.

The inquiry was part of a nationwide federal investigation of alleged pay-to-play practices in local government bond markets. Federal investigators have been trying to build cases against financial firms and political figures who may have accepted gifts in exchange for high fees on work advising municipal and local governments on investments.

Of the apparent outcome of the investigation into Richardson's office, a source close to the governor said, "It's not official, but it looks good."

"There is a sense of relief," the source said, speaking on the condition of anonymity because of the sensitivity of the matter, "but there is a sense of vindication more importantly."

Staff writers Carol D. Leonnig and Philip Rucker contributed to this report.


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