Probe of Richardson to end without charges

SANTA FE, N.M. | A dark cloud over Gov. Bill Richardson’s political future has lifted after the federal government’s decision against indictments in a pay-to-play investigation that prompted the governor to withdraw his nomination as U.S. commerce secretary earlier this year.

Political analysts said the yearlong probe’s end could even revive Mr. Richardson’s chances of finding a place in President Obama’s administration in the future. The governor’s second term expires at the end of 2010, and he can’t seek re-election.

“The cloud over his head has dissipated,” Larry Sabato, director of the University of Virginia’s Center for Politics, said Thursday.

The Democratic governor and former high-ranking members of his administration won’t be criminally charged in an investigation of how lucrative state bond work went to one of the governor’s large political donors, according to two people familiar with the case. The decision not to seek indictments was made by Justice Department officials in Washington, they said, speaking on the condition they not be identified because prosecutors had not disclosed results of the probe.

“It’s over. There’s nothing. It was killed in Washington,” one of the people said.

A department spokesman declined to comment on the case and whether Attorney General Eric H. Holder Jr. played a role in deciding not to pursue charges.

The agency’s silence drew criticism from New Mexico Republican Party Chairman Harvey Yates Jr., who said Mr. Holder should provide “transparent and honest answers” about who was responsible for the decision to end the investigation without indictments.

A spokesman for Mr. Richardson, Gilbert Gallegos, said in a statement Thursday that “while the U.S. Attorney’s Office has not notified Gov. Richardson about the completion of its investigation, it appears that no action will be taken as a result of the year-long inquiry.”

Mr. Gallegos said Mr. Richardson was “gratified that this year-long investigation has ended with the vindication of his administration.”

Mr. Richardson took office as governor in 2003, having served as a congressman from New Mexico, a roving diplomatic troubleshooter and as President Clinton’s energy secretary and U.N. ambassador.

Recently, Mr. Richardson has returned to the diplomatic limelight. He met with a delegation of North Koreans earlier this month in Santa Fe and the governor was in Cuba this week for a trade mission.

The U.S. Attorney’s Office in New Mexico began an investigation last year into the hiring of a Richardson political donor, Beverly Hills-based CDR Financial Products Inc., as a financial adviser on state transportation bond deals. The state work generated almost $1.5 million in fees for CDR in 2004 and 2005.

CDR Chief Executive Officer David Rubin and his firm contributed $110,000 to Richardson political committees in 2003 to 2005. The largest of those contributions, $75,000, was made less than a week before CDR was selected in June 2004 by the New Mexico Finance Authority to handle the reinvestment of idle bond proceeds.

Investigators reviewed whether Mr. Richardson’s former chief of staff, David Contarino, played a role in the hiring of CDR. A grand jury subpoenaed records from the governor’s office about CDR and former Richardson aide David Harris and Mike Stratton, a political adviser.

Mr. Harris served as Mr. Richardson’s deputy chief of staff and then became executive director of the Finance Authority, which selected CDR for the bond financing work.

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