- The Washington Times - Wednesday, January 7, 2009

The political donor at the center of a corruption investigation that scuttled Bill Richardson’s Cabinet nomination gave $28,500 to President-elect Barack Obama and the Democratic Party in September, one month after the existence of the investigation was already public, records show.

The money from businessman David Rubin, chief executive of Los Angeles-based CDR Financial Products Inc., raised new questions Tuesday about how thoroughly Mr. Obama’s campaign and the Democratic Party vet their donors, an issue that has dogged the party since a 1990s Clinton-era fundraising scandal.

Mr. Richardson, the New Mexico governor, withdrew his nomination Sunday to be Mr. Obama’s Commerce Department secretary, citing a federal grand jury investigation into whether any of Mr. Rubin’s political donations in New Mexico influenced state government contracts awarded by Mr. Richardson’s gubernatorial administration. Both Mr. Richardson and Mr. Rubin deny wrongdoing.

At the time Mr. Richardson withdrew his nomination, the Obama transition team made no mention of the fact that Mr. Rubin had donated $2,300 to Mr. Obama’s campaign and $26,200 to the Democratic Party at a joint Obama Victory Fund fundraiser at a posh mansion in Beverly Hills, Calif., on Sept. 17.

On Tuesday, Obama transition spokesman Tommy Vietor declined to answer any questions about the donations, including how Mr. Richardson was vetted, what was Mr. Obama’s reaction to the investigation and the donations’ timing. The transition also declined to say whether they checked Mr. Rubin’s background at any time after receiving the donations.

But a campaign finance watchdog said the episode demonstrates anew how little effort political campaigns make in vetting donors or their motives.

“The fact that people who want something out of government are giving lots of money is a recipe for exactly what’s happening to Bill Richardson,” said Mary Boyle, a spokeswoman for the nonpartisan ethics watchdog Common Cause. “I have no idea if this is a quid pro quo situation, but the fact is when you have special interests giving a lot of money to a politician, there are always going to be questions asked.

“People are under a tremendous amount of pressure to raise money, and so you tend not to be really picky when somebody wants to give,” she said.

It’s not the first time questions have surfaced over the Obama campaign’s screening of donors. The Washington Times reported in October on dozens of donors listed with clearly questionable information, including more than 100 from donors identified as “anonymous,” another from “JFGGJJFGJ” and one listing an occupation as “white collar drone.”

According to FEC records, Mr. Rubin listed both CDR Financial and Chambers Dunhill & Rubin as his place of employment in the donations. Company officials have acknowledged that there are no partners named Chambers or Dunhill and that they were added to make the one-man shop sound more established.

Mr. Obama expressed regret on Sunday concerning Mr. Richardson’s withdrawal, but made no specific comments concerning the New Mexico investigation.

On Sept. 17, Mr. Rubin attended a fundraiser in Los Angeles for Mr. Obama at the Beverly Hills Greystone Mansion, where those in attendance gave tens of thousands of dollars, which later was split among the Democratic National Committee and state-level campaign groups supporting Mr. Obama and Democratic candidates. The $28,500 donation by Mr. Rubin is listed in campaign records with a date of Sept. 19.

The Albuquerque Journal reported a month earlier that the FBI had requested documents from the New Mexico Finance Authority and interviewed former and current Richardson administration officials about the contract with CDR Financial. The newspaper said Mr. Rubin had contributed to three political committees formed by Mr. Richardson.

The ongoing probe has continued to focus on CDR Financial and Mr. Rubin, whose company was the recipient of a lucrative New Mexico state contract after he contributed more than $100,000 to the three political committees formed by Mr. Richardson back in 2003 and 2004.

Mr. Richardson said this week that while he had not done anything wrong, he withdrew his Cabinet nomination because the inquiry “would have forced an untenable delay in the confirmation process.”

He had been the highest-profile Hispanic pick for Mr. Obama’s Cabinet. While his withdrawal defuses what could have become messy confirmation hearings, it also was the first major crack in what had been a successful Cabinet rollout for Mr. Obama.

Since 1994, Mr. Rubin has donated nearly $200,000 to the Democratic National Committee, the Democratic Congressional Campaign Committee, several Democratic candidates and a number of Democratic political committees, including those supporting Mr. Richardson, the FEC records show.

The donations under investigation in New Mexico came before and after CDR Financial was awarded a state contract in New Mexico to help finance $1.4 billion in highway and transportation projects. That contract brought in $1.5 million for the firm.

Mr. Rubin, in a statement released by his company, said that in withdrawing his name from nomination, Mr. Richardson had cited an ongoing “investigation of a company that had done business with the New Mexico state government.”

“CDR is the company in question, and the investigation concerns alleged political patronage in the state - in particular the contributions I made in 2004 to Gov. Richardson’s election campaign and to a voter registration organization affiliated with him [that] might have been made in order to obtain favored status for CDR in seeking work as a financial advisor to the state.”

He described the timing of the investigation and the media coverage surrounding it as “extremely unfortunate, not for us, but for Gov. Richardson, an exceptionally able and dedicated public official, who was highly deserving of the opportunity to hold a cabinet-level position in the new Obama Administration.”

Adding that the company is cooperating in the federal probe, Mr. Rubin denied that CDR has ever “practiced pay-for-play, on any playing field where we do business.

“With respect to the work we did for the New Mexico Finance Authority, we underwent a rigorous vetting process that involved multiple steps to ensure that CDR was, in fact, qualified for the job of assisting the state in managing its interest rate swap transactions,” he said.

“That selection process included meetings with state officials, followed by a highly detailed proposal with extensive analysis and discussion of the swaps and derivatives market, followed again by written responses to ‘clarification’ questions posed by the Finance Authority,” he said.

Mr. Rubin, in the statement, also said he had made contributions to political causes and candidates in New Mexico - including contributions directly to Mr. Richardson’s gubernatorial campaign and to organizations supporting voter registration drives and other aspects of the electoral process. But, he said, those donations were given with “full compliance of state and federal laws.”

“I have been an unabashed supporter of Democratic causes and public figures, especially those like Gov. Richardson, who support a liberal, inclusive agenda,” he said.

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