Pay For Play?

The story of the withdraw of New Mexico Gov. Bill Richardson as commerce secretary for the Obama Administration appears at root to be about contracting gone bad.

Investigators are looking into whether contractors had to pay-to-play -- in other words, provide kickbacks in some form to get state contracts.

Such corruption is as old as the hills. But we've been hearing about it a lot in Iraq, etc. etc.

The focus of the Richardson investigation has an added twist: It involves interest rate swaps, a financial transaction that municipalities across the land have used for many years to earn money on temporarily idle money raised through bonds.

Oh, the layers.

Post reporters Mike Shear and Carol Leonnig had this to say:

"A grand jury in Albuquerque is looking into whether CDR Financial Products received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees. CDR made $1.48 million advising the authority on interest-rate swaps and refinancing of funds related to $1.6 billion in transportation bonds, state officials confirmed.

"The Beverly Hills-based 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 lucrative state contract, records show.

"The federal probe heated up considerably last month, just around the time Obama announced Richardson as his choice for commerce secretary, according to sources familiar with the investigation. New subpoenas were issued, and testimony was scheduled from officials at J.P. Morgan Chase who worked for the state with CDR and from the director of Richardson's political action committees.

"CDR's selection drew FBI interest because the firm did not make an initial list of the most qualified bidders. The bidding was reopened for review, and a state committee headed by one of Richardson's former top aides later helped select CDR."

By Robert O'Harrow |  January 6, 2009; 6:15 AM ET
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