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The Man Obama Double-Crossed
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The president’s staffing nightmares began with Bill Richardson, the erstwhile Commerce nominee, who has told confidants that he was promised the secretary of State job. Now, with looming investigations and sinking polls, Richardson may be lucky to hang on as governor of New Mexico.
Just over a year ago, Bill Richardson was a credible, if dark horse, Democratic presidential candidate and possible Barack Obama vice-presidential running mate. Five months ago, he was stunned when he did not become Obama's secretary of State; several people close to him say he thought he had been promised it. Then, in a humiliating and historically ironic slight to the man who had helped Obama win the Iowa caucuses and then the primary election, Obama passed over Richardson for State in favor of their mutual nemesis, Hillary Clinton. Still reeling from what he considered a double cross—Richardson told confidants he had been promised secretary of State—he gamely accepted the consolation prize, secretary of Commerce. But even that was to elude him. In early January, amid revelations that a federal grand jury was investigating a pay-to-play scheme involving a California-based financial company and Richardson’s political action committee, Richardson withdrew his nomination.
Richardson is now the lamest of lame ducks; his in-state approval ratings have plummeted to his all-time low of 41 percent.
In the span of a few short months, Richardson has gone from a luminous star in America’s political galaxy to a powerless pariah in the twilight zone. The second-term governor of New Mexico, whose term does not expire until 2011, is now plagued by the aura of scandal and is the lamest of lame ducks. Fending off a plethora of accusations, Richardson has watched his in-state approval ratings plummet to his all-time low of 41 percent. His political clout with the state legislature is severely weakened, and party leaders are discreetly lobbying for his resignation so that Democratic Lieutenant Governor Diane Denish can ascend as planned. “His popularity has really declined in the state,” says Democrat Timothy Jennings, the state senate’s president pro tempore.
Dubbed GRIPGate—for Governor Richardson’s Investment Partnership, which he formed to fund public-transportation projects—the pay-to-play probe is part of a larger national investigation of bid rigging in the municipal-bond market. The federal grand jury seated in Albuquerque has subpoenaed correspondence and political contribution records from Richardson’s office dating back to 2002, including records from the Democratic Governors Association during the period of 2005 to 2006, when Richardson served as its chairman. That subpoena focuses particularly on the records of two of Richardson’s top aides, as well as correspondence with two Colorado men: Chris Romer and Michael Stratton. Romer, a Colorado state senator and the son of former Colorado Gov. Roy Romer Jr., was the lead executive for JPMorgan Chase, which was the senior underwriter on $1 billion in bonds sold by the state to pay for Richardson’s GRIP transportation projects. Stratton, who was the senior political adviser to Richardson’s presidential campaign, owns a Denver-based consulting firm that was hired by JPMorgan to lobby the Richardson administration.
At the heart of the investigation are charges that CDR Financial Products paid contributions into Richardson’s political coffers in exchange for state contracts, as well as kickbacks to the financial advisory firms that submitted questionable “low” bids for bond-underwriting services. Federal investigators are looking at how CDR “came to be selected as the ‘swap adviser’” for Richardson’s GRIP, according to the New York Times.
While the CDR pay-to-play case is a serious problem facing Richardson, prompting the governor to hire an Albuquerque criminal-defense attorney, it is but one of several investigations dogging the governor in what local reporters refer to as Richardson’s perfect storm. In January, Frank Foy, the former chief investment officer of New Mexico’s Education Retirement Board, filed a “whistleblower” civil lawsuit. He claims he was pressured by the Richardson administration to invest with a Chicago-based company called Vanderbilt Capital Advisors after Vanderbilt contributed to Richardson’s presidential campaign. That investment, according to Foy, resulted in a $90 million loss for the state. Co-defendants in the case include JPMorgan Chase and several other financial-services firms. “The bottom line is the fix was in,” said Foy’s attorney.
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robjh1
It seems President Obama promised the position of Secretary of State to a lot of people. But why bring it up? It only serves to divide the party. As for Gov. Richardson, did he really think he had a chance to become President? The man has such a sketchy personal and professional life. He should lay low.
d49nj00
This is a non story.
Banjo1
An open-borders fanatic like Pancho Richardson may deserve a cabinet position, but only in the Mexican government.
stephenfox
Watch what the Federal Grand Jury does vis a vis Richardson's associate, Michael Stratton, who was not only a lobbyist for CDR, but for the world's largest aspartame and m.s.g. maker, Japan's Ajinomoto, the new monstrous corporations joining Monsanto as one of the worst and most malevolent in the world.
Personally, I don't think Richardson is culpable. I believe he will be exonerated, and then all of this bad press will go up in smoke. We will see. The press has cannibalized him, rather unfairly, I believe, and I know it pained him deeply to stem down from consideration for Commerce Secretary, because of the Senate Confirmation process and him not wanting to cloud either his own future nor Obama's with any kind of grand jury investigation. Those things are convened for a full year; at the end of the year, they are reconvened; they didn't finish in 2008, so another was convened in 2009; that is why he pulled out of Commerce consideration Jan.4; I know, because I was in his office for the Press Conference the next day.
A talented and superb populist at heart, he sometimes walks the line with corporations that NM is courting for various things, like locating here, and at that, he has been tops. As another New Mexican, I can't agree that he is "finished," no not at all. As to what Tim Jennings has to say about his popularity decline and his therefore having to resign: Poppycock! Have a little faith in the guy; I certainly do, and I have known him for 32 years, when he was working in the Senate Foreign Relations Committee for Humphrey and McGovern.
Best wishes,
Stephen Fox, Editor, New Mexico Sun News
Santa Fe, NM
estcruzer
This is an interesting story about Richardson, nothing to do with Obama except that his staff background investigation on Richardson was way to shallow. Something that has plagued his picks intermittently. Surely the title is misleading re the contents and should be reversed as Richardsons double-cross of Obama - actually that might be a more interesting story.
sippewissett
Where's the doublecross? CAN the sensationalism in the headlines (a bad habit of The Beast) and focus on the fact that while Richardson did support Obama mightily during the campaign, we are not privy to what might have been promised.
As it was -- politically -- it was more important for Obama to assuage Hillary's large voting base than it was to reward Richardson with a plum. That's how rough federal politics are.
I have been a long-time fan of Richardson because of his considerable foreign-affairs background and thought he'd be a terrific Secretary of State nominee. However, the news that he could be under indictment in his home state made him an instant pariah in D.C. I'm not happy it happened to him, but am happy that there is more transpareny in Obama's appointments. We don't need another "Brownie" in D.C.
Bulldoglover100
LOL Obama's people KNEW what was going on with Richardson and you want to slam him for not giving Richardson the biggest prize?? Are you serious? You want to turn this around to be about Obama? LOL Grow a brain and realise that the najority? KNOW why Obama did not give it to Richardson. It was for the same reason he is now unpopular in his own state.
I like Richardson but he should have been happy Obama gave him anything after what he has done.
Pupster
While I see little blame in Obama choosing Hilary over Richardson as SoS, the idea of a political prosecution and persecution of Richardson shouldn't be dismissed so easily. From what we've learned of the Justice Department, under Bush, Gonzales and the raft of incompetent theocons (Monica Goodling, anyone?), we know that there was a consistent message of taking down those who opposed Bush policies. And the story of Don Siegelman shows that even a governor is not safe from these kinds of political hit jobs.
Until there is uncontrovertible proven evidence (and frankly, after Siegelman, I still might not trust it), I'm willing to give Richardson the benefit of the doubt.
menckenlite
sippewissett asks, "Where's the doublecross?" Few Americans think logically and fewer politically. Is this a comment by the Richardson Attack Machine? Richardson is a member of the upper class, like Obama. Children of the upper class benefit from affirmative action, getting privileges they do not need, denying them to poor persons who need help.
mindlessmissy
Why promise someone a position he was NEVER going to be confirmed for in the first place ...
At least with the commerce post, any scandal ultimately would NOT become an International Affair ...
Great call on the President's path ...
flyoverland
I'd go back to the beard.
vwade22
Have any of you noticed all the wonderful things that have happened to the Hillary backstabbers? Richardson, Dean, Kerry, Caroline, Teddy etc....I think it's hilarious that they sold their soul for political gain and came out with nothing.
joymars
This blog is wretched journalism. Makes Faux News look responsible.
Watch you headlines. Or do you love wallowing in yellow journalism?
flyoverland
Breaking news another Obama appointees former office just raided by the FBI. Who is charge of vetting these people, somebody from Chicago, or what? I don't like Obama, but his own people are really not serving him well.
sonofloud
Richardson double crossed HIllary.
What goes around comes around.
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