Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

March 12, 2009


Sally Denton, Daily Beast - Just over a year ago, Bill Richardson was a credible, if dark horse, Democratic presidential candidate and possible Barack Obama vice-presidential running mate. Five months ago, he was stunned when he did not become Obama's Secretary of State; several people close to him say he thought he had been promised it. Then, in a humiliating and historically ironic slight to the man who had helped Obama win the Iowa caucuses and then the primary election, Obama passed over Richardson for State in favor of their mutual nemesis, Hillary Clinton. Still reeling from what he considered a double cross - Richardson told confidants he had been promised secretary of State - he gamely accepted the consolation prize, secretary of Commerce. But even that was to elude him. In early January, amid revelations that a federal grand jury was investigating a pay-to-play scheme involving a California-based financial company and Richardson's political action committee, Richardson withdrew his nomination.

In the span of a few short months, Richardson has gone from a luminous star in America's political galaxy to a powerless pariah in the twilight zone. The second-term governor of New Mexico, whose term does not expire until 2011, is now plagued by the aura of scandal and is the lamest of lame ducks. Fending off a plethora of accusations, Richardson has watched his in-state approval ratings plummet to his all-time low of 41 percent. . .

The federal grand jury seated in Albuquerque has subpoenaed correspondence and political contribution records from Richardson's office dating back to 2002, including records from the Democratic Governors Association during the period of 2005 to 2006, when Richardson served as its chairman. That subpoena focuses particularly on the records of two of Richardson's top aides, as well as correspondence with two Colorado men: Chris Romer and Michael Stratton. Romer, a Colorado state senator and the son of former Colorado Gov. Roy Romer Jr., was the lead executive for JPMorgan Chase, which was the senior underwriter on $1 billion in bonds sold by the state to pay for Richardson's GRIP transportation projects. Stratton, who was the senior political adviser to Richardson's presidential campaign, owns a Denver-based consulting firm that was hired by JPMorgan to lobby the Richardson administration.

At the heart of the investigation are charges that CDR Financial Products paid contributions into Richardson's political coffers in exchange for state contracts, as well as kickbacks to the financial advisory firms that submitted questionable 'low' bids for bond-underwriting services. Federal investigators are looking at how CDR “came to be selected as the ‘swap adviser’” for Richardson’s GRIP, according to the New York Times.


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