Businessman Linked to Richardson Donated to Obama

January 7, 2009 - 8:31 AM
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Washington (AP) - A prominent businessman caught up in a grand jury probe whose political donations ended any role for New Mexico Gov. Bill Richardson in the Obama administration also was a generous contributor in support of the president-elect.
 
David Rubin gave $26,200 to the Democratic Party on Sept. 19 and $2,300 to Barack Obama's campaign on Sept. 30, according to records filed with the Federal Election Commission. Last February, Rubin gave another $1,000 to Obama's campaign.
 
Rubin and his company donated $100,000 in 2003-2004 to the political committees of Richardson. The contributions came both before and after Rubin's company won a state contract in New Mexico to help finance $1.4 billion for highway and transportation projects, a contract that brought $1.5 million in business for the company, CDR Financial Products.
 
While the CDR investigation has put CDR in the spotlight in New Mexico, CDR has been under investigation for its business practices around the country by the Justice Department's Antitrust Division, the Internal Revenue Service and the Securities and Exchange Commission.
 
On Sunday, Richardson withdrew from consideration as commerce secretary amid the grand jury investigation. The federal criminal investigation of CDR's work for the state of New Mexico had been the subject of reports in the news media since August.
 
In a statement, CDR says the grand jury investigation concerns whether Rubin's contributions might have been made in order to obtain favored status for the company, CDR, in seeking work as a financial adviser to the state.
 
Rubin has given over $200,000 in federal election campaigns since 1995, almost all of it to Democrats, according to the Center for Responsive Politics, a non-profit group that tracks political donations.
 
"CDR has never practiced pay-for-play, on any playing field where we do business," the company's statement said.
 
Obama spokesman Ben LaBolt declined to comment.
 
On Sept. 17, two days before the donation to the DNC, Rubin was on a list of participants in an $11 million Hollywood fundraiser on behalf of Obama, which also included numerous celebrities. Leonardo DiCaprio and Jeffrey Katzenberg were among the hundreds of luminaries, according to Entertainment Weekly.
 
Beverly Hills-based CDR Financial Products was hired to be part of a team of banking, investment and financial advisers selected by the New Mexico Finance Authority that assembled a complex bond financing deal for a highway and transportation construction program. The Finance Authority is a quasi-public agency that issues bonds and provides other financing to state and local governments.
 
The contributions to Richardson by CDR and Rubin went to a political committee that helped pay for expenses of Richardson staff and supporters to attend the 2004 Democratic National Convention and another committee that Richardson formed to help register Hispanics and American Indians to vote.
 
The IRS is examining more than 20 deals between 1996 and 2005 that center on CDR's involvement in bid-rigging and price-fixing issues, according to court documents filed in an antitrust case in U.S. District Court in New York's Southern District.
 
Eighteen lawsuits filed by municipalities against CDR and many of the biggest name firms on Wall Street state that the FBI raided CDR's California offices in November 2006, at the start of a government investigation into anti-competitive conduct in the municipal derivatives market.
 
CDR spokesman Allan Ripp declined to discuss the details of the lawsuits or investigations pending against the firm.
 
Some lawsuits are a result of the economic crisis that have sparked a "wave of litigation against every sort of investment adviser," including lawsuits from municipalities trying to get back funds lost in the financial turmoil, he said.
 
"There's never been a question about performance or competency, the professionalism of the firm," he said. "These all seem to be questions about marketing practices and business generation as opposed to business performance."
 
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Heather Clark reported from Albuquerque, N.M.