Financial affairs: Bill Richardson’s ethics deficit

Bill Richardson had an admirable career as a member of the United States House of Representatives and an ambassador to the United Nations, where he was one of the country’s most capable negotiators in complex and sometimes dangerous international situations. Unfortunately, the ex-governor of New Mexico’s accomplishments have been undermined by his questionable dealings with campaign financing in previous years, and a new investigation has made Richardson the focus of inquiry once again.

On Thursday, news broke that Richardson (pictured, right) was being investigated for the use of campaign contributions to buy the silence of a woman with whom he’d allegedly had an affair. The woman, who reportedly worked for the state of the New Mexico during Richardson’s time as governor and during his 2008 presidential run, is said to have received $250,000 from Richardson’s presidential campaign funds, which was meant to prevent her from suing her former lover and employer.

Richardson’s scandal, first reported in the Wall Street Journal, is likened to that of another one-time Democratic presidential candidate, John Edwards , who will soon face trial for violating campaign finance laws related to his own mistress. But the New Mexican politician has already been tarnished by an earlier, serious, if less sexy, scandal related to money and power.

Richardson’s sudden fall from grace in January 2009 was largely obscured by the run-up to Barack Obama’s inauguration as president. Obama had asked Richardson, then the sitting New Mexico governor, to take the important cabinet position of Commerce Secretary. But, mere weeks before his appointment, a lingering ethical problem from Richardson’s past caught up to him. 

Richardson’s trouble, which caused him to withdraw from consideration for a job in Obama’s cabinet, was related to an accusation of pay-to-play politicking during his 2006 gubernatorial reelection campaign. According to the Los Angeles Times, New Mexico entered into a lucrative contract with a firm called CDR Financial Products not long after the company and its president, David Rubin, had given upwards of $100,000 to Richardson’s campaign and two of Richardson’s political action committees.

New Mexico’s contract with CDR Financial called upon the investment firm to package a $1.6 billion bond deal involving construction projects for the state’s highways and transportation. For its work on the project, CDR Financial collected $1.5 million from the state.

According to the National Institute on Money in State Politics (NIMSP), Rubin (pictured, right) and his company were no strangers to cozying up to state-level politicians. Data from the NIMSP revealed that CDR and its president had contributed $102,000 to governors or gubernatorial candidates, including $35,000 to former Pennsylvania Governor Ed Rendell. Proving that they were spreading money in the West, Northeast and South, Rubin and CDR also contributed a total of $5,000 each to a candidate for Tennesse governor and a candidate for the Tennessee House Senate  Democratic Caucus; another $10,000 was parceled out to 17 Tennessee legislative candidates.

Richardson and Rubin -- who said he simply supported “liberal, inclusive” candidates -- both denied any accusations of pay-to-play, but the appearance of influence peddling was enough to force Richardson out of national service.  Federal prosecutors later decided not to bring criminal charges against Richardson. (Rubin hasn't been so lucky: He and two other CDR executives were later indicted, and are now facing trial for defrauding government agencies in a "bid-rigging" scheme which allegedly involved kickbacks to CDR.)

But the scandal was enough to force real change within the state of New Mexico. During the 2009 legislature, lawmakers tightened the state’s existing campaign finance laws, becoming the 46th American state to enact limits on campaign contributions to individual candidates.

Before the bill could become law, it needed a signature from the man whose questionable financial dealings inspired the legislation, and has once again put him back in the spotlight: Bill Richardson.

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