In an ongoing saga that looked to have run out of steam a month ago after four of five felony counts against Murphy were dismissed, Smith’s reversal marks a victory of sorts for District Attorney Matt Chandler of Clovis, whose office has accused Murphy of informing a prospective judicial candidate that she needed to pay for a seat on the bench. Allegedly, she also told another judge about a $4,000 donation made in 2006 to to ensure his judgeship appointment.

Smith said yesterday that he reinstated the past four felony charges because he’d been unaware prosecutors had not participated in the immunity hearing overseen by Robinson. “Failing to provide complete information,” Smith warned both attorneys in the case, “can be just as misleading to a court as purposefully giving inaccurate information.”

Murphy has denied any wrongdoing, but taped conversations between himself and another Las Cruces judge, Lisa Schultz, have begun to haunt not just Murphy but other judges and former judges throughout the state whose names have also come up in the case — as either witnesses or those who have knowledge of some of the events and conversations leading up to Murphy’s indictment in May.

For example, in a 43-minute conversation between Murphy and Schultz from November 10 of last year, which had been secretly recorded by Schultz, Murphy expressed several times to Schultz her reasons for a chief judge candidate he wanted elected and why doing so would be in her best interest. Chandler has argued that these remarks signified attempted bribery. Murphy’s attorney Michael Stout has maintained that Murphy was simply lobbying, and therefore there was no wrongdoing or unlawful intent.

That lone remaining charge had been all that had been left of the overall charges against Murphy until yesterday.

New Mexico Gov. Bill Richardson and former high-ranking members of his administration won’t be criminally charged in a yearlong federal investigation into pay-to-play allegations involving one of the Democratic governor’s large political donors, someone familiar with the case said.

The decision not to pursue indictments was made by top Justice Department officials, according to a person familiar with the investigation, who asked not to be identified because federal officials had not disclosed results of the probe.

“It’s over. There’s nothing. It was killed in Washington,” the person told The Associated Press.

A federal grand jury began an investigation in 2008 into a possible pay-to-play scheme in which lucrative work on state bond deals went to a Richardson donor.

News of the probe forced Richardson to withdraw his nomination to be President Obama’s commerce secretary in January.

Update: The New Mexico Independent, which has been following this story from the beginning, has the background.

The [New Mexico] Independent sought to view documents from the governor’s office from January through August 2006 that would have divulged with whom he had met in the months prior to the costly investment that benefited the son of the governor’s friend to the tune of millions of dollars.

But the governor’s office isn’t saying or allowing access to the documents. Its rationale: The governor’s calendars, datebooks and other documents that would shed light on his schedule are protected by executive privilege. [...]

The Independent’s goal was to see if Richardson had met with Marc Correra, the son of Anthony Correra, a Richardson friend, in the months prior to two state boards investing in $90 million with Vanderbilt Financial Trust. The state lost all $90 million in the investment. Correra is said to have been paid $2 million as a third-party marketer, a kind of middleman in the investment world.

In case you’ve forgotten, executive privilege is the legal principle that exists to ensure the quality of the advice some government officials (such as presidents or governors) receive by shielding advisers from being forced to testify about the advice they give. It was frequently cited by the Bush administration to prevent adviser Karl Rove and White House Counsel Harriet Miers from testifying before Congress on the firings of nine U.S. attorneys.

Richardson, a former Clinton administration official and presidential candidate, is currently embroiled in a federal pay-to-play investigation.

You can stay up to date on all the happenings in the Land of Enchantment over at The New Mexico Independent.

Richardson heads the State Investment Council (SIC), which manages the state’s investments. In October 2005, the SIC voted to invest $20 million with Quadrangle Group LLC, according to minutes of the meeting. At the time of the 2002 and 2006 campaign contributions, Rattner was a managing principal in the company, which he left in February of this year to take the auto-bailout job.

Though he hasn’t been charged with any wrongdoing, Rattner has been identified by national media outlets as the unnamed person in federal documents who allegedly arranged in late 2004 for Quadrangle to pay $1.1 million in exchange for business with the state of New York.

While neither Quadrangle nor Rattner have been accused of any wrongdoing in New York or New Mexico, this certainly doesn’t look good for Richardson.

You can read Heath’s full story here.

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The New Mexico Independent and TWI are members of the Center for Independent Media network.

“The Governor is fully supportive of Dave Contarino and is confident that he always acted ethically and appropriately during his time as chief of staff. Dave was a key part of the progress in New Mexico under Governor Richardson’s leadership.”

As NMI’s Trip Jennings explains, Contarino is the subject of a federal probe examining the possible “pay-to-play” scheme that prompted Richardson to withdraw his nomination for secretary of commerce in the Obama administration.

You can follow NMI’s ongoing coverage of the investigation here.

The twist? This scandal involves New Mexico Gov. Bill Richardson, whom President-elect Barack Obama tapped as his choice for commerce secretary. Richardson withdrew his nomination for the post Sunday, citing an ongoing federal probe examining the state’s dealings with a California financial company that made large donations to a pair of political action committees founded by Richardson.

From The Washington Post:

A grand jury in Albuquerque is looking into whether CDR Financial Products received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees. CDR made $1.48 million advising the authority on interest-rate swaps and refinancing of funds related to $1.6 billion in transportation bonds, state officials confirmed.

The Beverly Hills-based firm and its president, David Rubin, together gave $100,000 to Sí Se Puede and Moving America Forward, both PACs started by Richardson, shortly before winning the lucrative state contract, records show. [...]

CDR’s selection drew FBI interest because the firm did not make an initial list of the most qualified bidders. The bidding was reopened for review, and a state committee headed by one of Richardson’s former top aides later helped select CDR.

A legal source familiar with the investigation said yesterday that FBI agents, working on the Senate’s behalf and conducting a background check of Richardson for the Commerce job, conveyed to Obama’s transition team the seriousness and significance of the Albuquerque grand jury probe.

The agents are said to have communicated that the governor’s top aides — and even Richardson’s actions — were under scrutiny. At least two sources familiar with the investigation said some evidence raises concern about the propriety of the Richardson administration’s interactions with a donor.

The New Mexico Independent, TWI’s sister site, has been following the investigation since August and shares a few more details about the PAC donations.

[I]n 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.

Richardson formed Si Se Puede! to pay travel expenses for him and staffers who were attending the 2004 Democratic National Convention, which he chaired. Moving America Forward was a voter-registration group.

Si Se Puede!, according to a 2004 Associated Press article, raised $191,000. Of that, $130,000 — including the $75,000 from CDR Financial — came from companies working on the GRIP bonds.

According to The New Mexico Independent, Richardson and his staff have largely remained mum about the investigation, until yesterday.

As The Washington Post points out, Richardson’s withdrawal from consideration for a cabinet post raises questions about the thoroughness of the Obama transition team’s vetting process.

The New Mexico investigation had been publicized since the summer, yet aides to the president-elect said yesterday that they were not aware of the matter when Richardson was nominated. Richardson advisers insisted that the governor had relayed information about the investigation to transition officials before his name was announced.

The episode provides another early embarrassment for the incoming administration — it now has the dubious distinction of being touched by two Democratic pay-to-play investigations — but it doesn’t appear to pose any lasting harm to Obama.

Richardson, on the other hand, may have more to worry about. According to The Post, his spokesman said Richardson “was hopeful that his name would be cleared and it would be wrapped up before his confirmation hearing,” and Richardson decided to withdraw when it became clear it would not.

Perhaps this is the case, but even if Obama’s team didn’t know about the investigation before Obama made the nomination, Richardson certainly did. Cynics can be forgiven for speculating that Richardson’s decision might be indicative that the tenor of the probe has become more serious and Richardson could be withdrawing now to spare the new administration a larger headache in the future. Whatever the truth, it appears likely that we haven’t heard the end of this story.

The report, released late Tuesday, does provide some new information. Rahm Emanuel, Obama’s chief of staff, had “one or two telephone calls” with Blagojevich between Nov. 6 (two days after Election Day) and Nov. 8, according to the report. Greg Craig, Obama’s incoming chief counsel and author of the report, explained in a conference call with reporters that coincided with the release that the uncertainty arises from Emanuel’s inability to recall whether it was one call or two. Craig said Emanuel gave the same information to the U.S. attorney, and whether there were multiple calls is irrelevant because the calls were appropriate.

Here are the details, from the report:

Soon after he decided to accept the President-Elect’s offer to serve as Chief of Staff in the White House, Mr. Emanuel placed a call to the Governor to give him a heads up that he was taking the Chief of Staff’s position in the White House, and to advise him that he would be resigning his seat in the House of Representatives. They spoke about Mr. Emanuel’s House seat, when he would be resigning and potential candidates to replace him. He also had a brief discussion with the Governor about the Senate seat and the merits of various people whom the Governor might consider. Mr. Emanuel and the Governor did not discuss a cabinet position, 501c(4), a private sector position for the Governor or any other personal benefit for the Governor.

In those early conversations with the Governor, Mr. Emanuel recommended Valarie Jarrett because he knew she was interested in the seat. He did so before learning — in further conversations with the President-Elect — that the President-Elect had ruled out communicating a preference for any one candidate. As noted above, the President-Elect believed it appropriate to provide the names of multiple candidates to be considered, along with others, who were qualified to hold the seat and able to retain it in a future election. The following week, Mr. Emanuel learned that the President-Elect and Ms. Jarrett with the President’s strong encouragement had decided that she would take a position in the White House.

According to the report, Emanuel also spoke four times with John Harris, Blagojevich’s chief of staff, who is also a target of the federal investigation. The conversations took place between the time Emanuel accepted Obama’s offer of the chief of staff position and Dec. 8. The report states that after jarrett withdrew her name from consideration, Emanuel, acting on behalf of Obama, gave Harris other names whom Obama believed to be qualified, including Rep. Jan Schakowsky (D-Ill.) and Rep. Jesse Jackson, Jr. (D-Ill.) and Illinois Attorney General Lisa Madigan.

Mr. Harris did not make any effort to extract a personal benefit for the Governor in any of these conversations. There was no discussion of a cabinet position, of 501c(4), of a private sector position or of any other personal benefit to the Governor in exchange for the Senate appointment.

The report also focuses on a conversation between Jarrett and Tom Balanoff, the head of the Illinois chapter of the Service Employees International Union, in which Balanoff suggested Blagojevich was interested in a cabinet position. During the conference call, Craig said Jarrett thought the notion was “ridiculous” because Blagojevich was widely-reported to be the subject of a longstanding federal investigation.

Ms. Jarrett recalls that Mr. Balanoff also told her that the Governor had raised with him the question of whether the Governor might be considered as a possible candidate to head up the Department of Health and Human Services in the new administration. Mr. Balanoff told Ms. Jarrett that he told the Governor that it would never happen. Jarrett concurred.

Mr. Balanoff did not suggest that the Governor, in talking about HHS, was linking a position for himself in the Obama cabinet to the selection of the President-Elect’s successor in the Senate, and Ms. Jarrett did not understand the conversation to suggest that the Governor wanted the cabinet seat as a quid pro quo for selecting any specific candidate to be the President-Elect’s replacement. At no time did Balanoff say anything to her about offering Blagojevich a union position.

The report corroborates incoming senior adviser David Axelrod’s statements that he mispoke when he told Fox News that Obama had spoken personally with Blagojevich about the appointment and clarifies that contacts regarding the seat were made by Emanuel. The report also states that Obama, Emanuel and Jarrett were interviewed by the U.S. attorney’s office last week. Federal prosecutor Patrick Fitzgerald emphasized during a press conference about Blagojevich’s arrest earlier this month that nobody affiliated with the transition is suspected of any wrongdoing.

While the story is far from over, unless the FBI’s recordings of Blagojevich’s phone conversations reveal something new about Obama, his staff or associates, the transition is unlikely to have much additional new information to offer on the subject.

The Chicago Tribune reports that businessmen with ties to both Jackson and Illinois’ Democratic Gov. Rod Blagojevich discussed raising $1 million for Blagojevich’s campaign fund and then held a fund-raiser on the governor’s behalf in an effort to bolster Jackson’s chances for an appointment to President-elect Barack Obama’s vacated Senate seat. Blagojevich was arrested Tuesday on federal corruption charges for allegedly scheming to “sell” the appointment to Obama’s seat.

Blagojevich made an appearance at an Oct. 31 luncheon meeting at the India House restaurant in Schaumburg sponsored by Oak Brook businessman Raghuveer Nayak, a major Blagojevich supporter who also has fundraising and business ties to the Jackson family, according to several attendees and public records.

Two businessmen who attended the meeting and spoke to the Tribune on the condition of anonymity said that Nayak and Blagojevich aide Rajinder Bedi privately told many of the more than two dozen attendees the fundraising effort was aimed at supporting Jackson’s bid for the Senate.

Among the attendees was a Blagojevich fundraiser already under scrutiny by federal investigators, Joliet pharmacist Harish Bhatt.

That meeting led to a Blagojevich fundraiser Saturday in Elmhurst, co-sponsored by Nayak and attended by Jesse Jackson Jr.’s brother, Jonathan, as well as Blagojevich, according to several people who were there. Nayak and Jonathan Jackson go back years and the two even went into business together years ago as part of a land purchase on the South Side.

Blagojevich and the congressman met to discuss the Senate seat on Monday, one day before federal prosecutors arrested Blagojevich and charged him with trying to sell the U.S. Senate seat vacated by President-elect Barack Obama. As part of the charges, prosecutors alleged that Blagojevich was considering awarding the seat to a politician identified as “Senate Candidate 5″ because emissaries for that candidate were promising to raise as much as $1.5 million for Blagojevich’s campaign fund.

The Tribune has identified Jesse Jackson Jr. as “Senate Candidate 5.”

In a press conference Wednesday, Jackson denied any wrongdoing and said he is not a target of the federal investigation into Blagojevich’s activities.

It is obviously too early to draw conclusions, but if the report is correct, it is very difficult to imagine a positive spin for Jackson. Perhaps it’s possible that the businessmen were freelancing, but that would seem to be extremely risky, for precisely this reason — if you get caught, it looks really bad for your favored candidate.

However, the report suggests that there is a lot more yet to be uncovered about the Blagojevich affair. It places Jackson a degree closer to this explosive scandal, and in politics, that’s never a good thing.