- Associated Press - Tuesday, June 24, 2014

SANTA FE, N.M. (AP) - New Mexico will receive $1 million from a private equity firm to settle allegations that political connections to former Gov. Bill Richardson improperly influenced the awarding of a public investment deal, the State Investment Council announced Tuesday.

Markstone Capital Group, which has offices in Los Angeles and Tel Aviv, Israel, denied any wrongdoing as part of the settlement with the state agency. The council manages investments of New Mexico endowment funds valued at about $19 billion.

Former Michigan Democratic Rep. Bob Carr, who served with Richardson in Congress, received a $100,000 fee as a placement agent to help Markstone secure a $20 million state investment in 2004.

In 2011, the agency sued financial firms, brokers and others, including former state investment officer Gary Bland, alleging a pay-to-play scheme in which politically influenced state investments benefited Richardson’s supporters and friends.

No criminal charges have been brought.

Bland, Richardson and others, including Carr, have denied any wrongdoing. Carr previously settled with the council and agreed to cooperate with its efforts to recover money from others.

With the Markstone settlement, the council has collected nearly $28 million in settlements with financial firms and placement agents that helped broker state investment deals.

Richardson left office at the end of 2010. His former chief of staff, David Contarino, once served as Carr’s campaign manager.

The council said in its lawsuit that Carr provided information in late 2003 about Markstone to a Richardson staff member and that Carr also contacted Bland describing himself as a “friend of Bill Richardson and yours.”

Approval of the Markstone investment came after “political pressure” was applied to Bland, according to the lawsuit.

Carr left Congress in 1995, working in Washington, D.C., as a lawyer, lobbyist and consultant. He was not a registered broker-dealer during his involvement in the Markstone investment, according to the council’s lawsuit.

Markstone former chairman Elliott Broidy, a former finance chairman of the Republican National Committee, pleaded guilty in 2009 to a felony charge in New York for helping to secure a pension-fund investment in that state by giving nearly $1 million worth of illegal gifts to state officials.

Broidy co-founded Markstone with Israeli partners.

New Mexico remains invested in Markstone, but the value of the state’s holdings have deteriorated to less than $17 million, said Charles Wollmann, a spokesman for the council. Markstone focused on corporate-buyout investments in Israeli businesses.


Follow Barry Massey on Twitter at https://twitter.com/bmasseyAP

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