Adviser to Bill Richardson worked for firm at center of federal inquiry

By Carol Eisenberg

January 8, 2009 at 1:21pm

One of Gov. Bill Richardson’s closest advisers worked as a consultant for the Beverly Hills financial advisory firm at the center of a federal “pay-to-play” probe that led the governor to withdraw his name as the Commerce secretary nominee.

Michael J. Stratton did business consulting for CDR Financial Products Inc. at the time the company won $1.5 million worth of work from the New Mexico Finance Authority to advise it on complex financial transactions to fund the governor’s transportation plan, according to Bloomberg News.

Federal investigators are looking at whether an estimated $100,000 in political contributions made by CDR and its chief executive David Rubin to Richardson’s political committees influenced the decision to hire the firm.

Stratton, a longtime Democratic political consultant, has been friends with Richardson for more than 25 years. He advised Richardson during the governor’s failed bid for the 2008 presidential nomination, according to his website.

Denver-based Stratton & Associates worked for CDR as a business development consultant until at least 2007, CDR spokesman Allan Ripp said. He was not sure exactly when Stratton started working for the company, but said it was in the early 2000s. Richardson took office as governor in January 2003 and was re-elected to a second term in 2006.

Stratton’s consulting did not have “anything to do with political contributions,” Ripp said.

Richardson said Wednesday that no wrongdoing was involved in the hiring of CDR.

“In my view, the state and its officials have done nothing wrong,” he said at a news conference in Albuquerque. “They behaved with the best of intentions and the best conduct.”

Richardson has said he declined the Commerce post Jan 4 only because the federal probe threatened to delay his confirmation, leaving the president without a key player at a crucial time.

The largest contribution made to Richardson’s political committees by CDR and Rubin was $75,000 on June 18, 2004, which helped pay expenses for some of the governor’s staff and supporters at the Democratic National Convention, where he was chairman. Stratton worked with the governor during the convention.

That contribution was made just days before CDR was awarded a no-competition state contract to reinvest bond escrow proceeds.

Bill Sisneros, who became CEO of the New Mexico finance authority three months after CDR was selected, told Bloomberg that Stratton lobbied the authority on CDR’s behalf. “He was a hired hand for them,” Sisneros said. “His office would set up meetings with CDR when they’d come into town.”

Stratton had another powerful client: He was paid $269,000 by JPMorgan Chase & Co. in 2003 and 2004 to help win public finance business in New Mexico, Bloomberg reported. JPMorgan served as the lead underwriter on about $1 billion of transportation bond deals for Richardson’s transportation program.

CDR advised the finance authority on the purchase of swaps from New York-based Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., JPMorgan Chase & Co., UBS AG of Zurich and Royal Bank of Canada in Toronto as part of Richardson’s $1.6 billion transportation proposal.

Stratton describes himself on the firm’s website as “a prominent Colorado civic and business leader” and one of the nation’s best-known political consultants.

“Notable political leaders represented by Stratton include; Bill Clinton, Gary Hart, Michael Dukakis, Bob Kerrey, Christopher Dodd, Floyd Haskell, Roy Romer, Ron Brown, Federico Pena, Wellington Webb, and Bill Richardson,” according to the website. “In 1990, Stratton helped arrange and advance Nelson Mandela’s first trip to the U.S. following his release from prison in South Africa.”

In addition to political consulting, the firm is also involved in business consulting and real-estate development, according to its site.

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