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Now, feds probe Gov. Richardson of Obama Cabinet for 'pay-to-play'

December 26, 2008 |  1:22 am

It seems that Illinois' legally challenged Gov. Rod Blagojevich is not the only close Barack Obama associate and Democratic governor being investigated by the feds for possibly selling government business in return for campaign contributions.

New Mexico's Gov. Bill Richardson, who is the newly named Secretary of Commerce in Obama's about-to-be Cabinet, is also being investigated by a federal grand jury in his home state for possibly steering state bond business from the New Mexico Financial Authority toward David Rubin, a significant campaign contributor, according to an NBC News report, among others.

President-elect Barack Obama announces his selection of New Mexico Democrat Governor Bill Richardson as his Secretary of Commerce

NBC's Lisa Myers reports that two former state officials say they've recently been questioned by a federal grand jury specifically about allegations that Richardson or aides pushed state business worth nearly $1.5 million in fees toward CDR Financial Products in 2004. The company is headquartered in Beverly Hills.

This was about the same time as CDR's founder, Rubin, donated $100,000 to two of Richardson's political action committees; mainly it appears to cover expenses of the governor and his staff at the Democratic Party's National Convention in Boston that summer.

Rubin also donated another $29,000 to Richardson's unsuccessful presidential campaign this year and last.

The probe is part of a broad national federal exploration of "pay-to-play," in which government officials reap financial or other benefits in return for state business.

Richardson has ignored reporters' questions on the federal investigation, while a spokesman says he's confident the relationship was entirely appropriate and the governor expects state employees to cooperate fully with federal investigators. A CDR spokesman also said the transactions were appropriate.

An Obama transition official has refused to comment on whether the president-elect knew of the investigation before he appointed Richardson to his new Cabinet position.

Obama has called Richardson "my great friend" and said the governor would be a key member of his administration's economic team. Richardson, the first Latino in Obama's Cabinet, described himself the same way.

On Tuesday, the Obama transition team issued a five-page report of its own involvement with Blagojevich, who's charged in a federal criminal complaint with demanding money for state aid, business and his appointment of Obama's Senate replacement.

The Obama team report completely absolved the Obama team of any wrongdoing, as the Ticket reported here. But Obama was already on vacation when the report was issued and has said he won't be talking further about the matter. The president-elect's main Blagojevich contact, new White House chief of staff Rahm Emanuel also happened to be unreachable on a vacation in Africa.

Here's the full video report below.

-- Andrew Malcolm

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Photo credit: Associated Press

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