SANTA FE, N.M. - Gov. Bill Richardson's long career earned him several nicks as he moved up the political ladder from congressman and diplomat to governor: He played roles in the Monica Lewinsky scandal and led the Energy Department during the Chinese theft of America's most sophisticated miniaturized nuclear warhead.
But his biggest challenge may be in play now. After backing out of consideration for U.S. Commerce secretary, Richardson faced a murky political future as a grand jury probes a possible pay-to-play deal involving one of his big political donors.
Among the looming questions: Was a $1.5 million state contract awarded to that California donor in exchange for political contributions? And if so, how close was Richardson or his staff to any illicit dealmaking?
Richardson, who has hired a prominent white-collar attorney to represent him in the probe, declined to comment on the scandal Monday citing the ongoing investigation.
He has maintained he would be cleared in the probe, and said stepping down from the Obama administration had pained him.
"Yesterday, I was hurting over this decision," Richardson said Monday. "I lost a Cabinet appointment. While this decision was a difficult one, I think it was the right thing to do."
The inquiry is centered on Beverly Hills-based CDR Financial Products and its chief executive David Rubin. Rubin and CDR contributed $100,000 in 2003-04 to Richardson's political committees before and after CDR won a state contract to help finance $1.4 billion for highway and transportation projects.
The largest donation, $75,000, was given less than two weeks before a state board made a deal with the company to reinvest bond proceeds. The company earned more than $443,000 in fees.
In a statement issued Sunday night, Rubin said CDR "adamantly doesn't practice pay-for-play under any circumstance on any playing field."
CDR was hired to be part of a team of banking, investment and financial advisers selected by the New Mexico Finance Authority to assemble 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.
Authority officials maintain there was no wrongdoing in hiring CDR. The company was an adviser for so-called interest rate swaps that allowed the state to obtain lower interest costs for the bonds.
"I personally feel that the proper protocol was followed," said Stephen Flance, chairman of the authority board, which approved the firm's selection.
Flance said Monday that he's unaware of any effort by the governor's office to influence the selection of CDR.
Richardson's former deputy chief of staff, David Harris, served as executive director of the Finance Authority when CDR was selected in March 2003 after a competitive bid process. Harris left the job shortly after that to work at a state university.