Federal prosecutors are asking whether David Contarino, a man Gov. Bill Richardson once described as the “strategic mind” of his administration and “my most senior and trusted aide,” was involved in the alleged pay-to-play scheme that derailed the governor’s nomination for commerce secretary days ago, writers at Bloomberg are reporting.

One unnamed witness who testified before the federal grand jury investigating the allegations was quoted by the news organization as saying he was asked if Contarino, Richardson’s former chief of staff, ordered officials with the New Mexico Finance Authority to hire CDR Financial Products for a lucrative state contract. And “another person familiar with the investigation” was quoted as saying that Contarino “is a subject of the inquiry and that prosecutors are looking at whether he solicited contributions from firms that worked on finance authority bond deals.”

Contarino, who is 47 and owns a title company in Santa Fe, developed policy and managed Richardson’s  political and governmental staffs from 2003 through April 2006, He also ran both of Richardson’s campaigns for governor and his unsuccessful run for president last year.  Contarino left the chief of staff job in 2006 to work on Richardson’s re-election campaign the governor called Contarino  his most trusted aide.

It was already known publicly that the ongoing federal investigation revolves around whether any staffers in Richardson’s office engaged in pay-to-play politics on the CDR deal, but none had been publicly named before the Bloomberg article was published late Tuesday night.

The Bloomberg report threatens to increase the level of suspicion surrounding Richardson, who has bowed out of his appointment to be commerce secretary. It was already known publicly that the ongoing federal investigation centers on whether any staffers in Richardson’s office engaged in pay-to-play politics on the CDR deal, but none had been publicly named before the Bloomberg article was published shortly after 10 p.m. New Mexico time on Tuesday.

Last August Contarino told The New Mexico Independent, sister site to TWI, that he had not been subpoenaed by investigators.

Today Contarino provided this statement via e-mail to the news organization:

“As chief of staff and co-chairman of the Governor’s Finance Council, it was my job to be involved in GRIP [the contract in question] and many of the administration’s economic and financial initiatives,” he said. “In all of my actions, I acted appropriately and I am confident that the investigation will bear out that fact.”

GRIP, or Governor Richardson’s Investment Partnership, is the state contract at the center of the probe. CDR was paid almost $1.5 million in 2004 advising the finance authority on interest-rate swaps and restructuring escrow funds for $1.6 billion in GRIP bonds. Meanwhile, in 2003 and 2004, CDR Financial gave $75,000 to Richardson’s political action committee Si Se Puede!, and the company’s head, David Rubin, gave $25,000 to Moving America Forward, another Richardson PAC.

‘He never ordered me to do anything with CDR’

Ed Romero, finance chairman for Richardson’s presidential campaign, and a former ambassador to Spain, was was quoted by Bloomberg as calling Contarino a “very effective political professional” and said he would be surprised if Contarino did anything improper.

Bill Sisneros, who has headed the finance authority since about three months after CDR was hired and was not involved in that decision, told Bloomberg.com that Contarino never told him to choose CDR for other work.

“Dave and I, we’ve talked about CDR but he never ordered me to do anything with CDR,” the article quoted Sisneros as saying. “I’ve never spoken to Bill Richardson about CDR.”

Contarino has remained involved in Richardson’s political activities since the governor’s presidential campaign ended. In July, a fundraiser Richardson hosted to help Hillary Clinton retire her presidential campaign’s debt was held at Contarino’s Santa Fe home.

Scrutiny increases

The news about Contarino was one of several reports that put Richardson and President-elect Barack Obama under increased scrutiny.

ABC News was the first to report on Tuesday that David Rubin, head of CDR, had also contributed more than $30,000 to the Obama campaign and a joint Obama-Democratic National Committee fund formed to help elect Obama. Using the investigation of the Richardson administration as a springboard, the Pittsburgh Tribune-Review published an article about that state’s governor, Ed Rendell, receiving $35,000 in contributions from Rubin, whose company has made nearly $600,000 from a contract with that state.

And Bloomberg reported in a separate article published earlier Tuesday that one of Richardson’s senior political advisers, Denver political strategist Michael Stratton, lobbied the state of New Mexico on behalf of J.P. Morgan, which won a contract related to the bond deals that are the subject of the federal investigation into CDR. Stratton was paid $269,000 by J.P. Morgan for its work on behalf of that company.

J.P. Morgan officials have already testified before the grand jury in the CDR case.

The later Bloomberg article about Contarino quoted Sisneros as saying that Stratton also lobbied the finance authority on behalf of CDR. Stratton, a senior adviser and bundler for Richardson’s presidential campaign, declined to comment to Bloomberg.com.

Stratton has also remained active in Richardson’s political activities since the governor’s presidential campaign ended. In December, he co-hosted a fundraiser in Washington to help Richardson retire his campaign’s debt.

‘Putting this matter to rest’

Meanwhile, Richardson has scheduled several public events for today and Thursday in Albuquerque and Santa Fe unrelated to the federal investigation as he attempts to move past the scandal. And, as reported by the Albuquerque Journal, Richardson “appears to have embarked on a national damage-control campaign via e-mails to supporters of his own yearlong presidential bid.”

“Thank you for your past and continued support. I look forward to putting this matter to rest and in the meantime I am preparing for the upcoming New Mexico legislative session,” states a Monday e-mail from Richardson to supporters. The e-mail also states that it was paid for by Richardson’s now-defunct presidential campaign, which has still not retired all of its debt.


Trip Jennings is a reporter for the New Mexico Independent, one of TWI’s sister sites. Since August, Jennings has been covering the federal investigation in New Mexico that led to Gov. Bill Richardson’s decision to withdraw his name for the commerce secretary position.