When president-elect Barack Obama introduced his pick for Commerce secretary last month, he praised him, saying, “As governor of New Mexico, Bill showed how government can act as a partner to support our businesses….”
Those words have a different ring to them now that Bill Richardson has withdrawn from consideration amid an investigation into a donor who won a huge state contract.
Barack Obama’s transition team is coming under fire for failing to unearth the facts on this suspected pay-to-pay deal under investigation, but the problem is more serious than inadequate vetting.
The problem is that Obama has embraced Richardson’s approach to governing, and so even without Richardson, the president-elect is welcoming corruption and corporate influence into his administration.
At the press conference where he was named to the Commerce spot December 3, Richardson said to Obama, “The catchphrases of your economic plan – investment, public-private partnership – that is the Department of Commerce.”
This column explored Richardson’s use of “public-private partnership” a month ago, and argued that the term is often a euphemism for corporate welfare, and always an invitation for corrupt pay-to-play deals. In at least one case, we now know, federal investigators have the same suspicion.
CDR Financial Products Inc. (formerly named Chambers, Dunhill, Rubin & Co., although there never was a Chambers or Dunhill) in 2004 won $1.5 million in contracts from New Mexico’s government while the firm and its president David Rubin donated at least $110,000 to Governor Richardson and his various campaign committees.
At a high-dollar, star-studded Obama fundraiser in Los Angeles over the summer, Rubin also cut a $28,500 check to Obama and other Democrats—not the sort of small-dollar donor Obama typically bragged about when rejecting federal matching funds and the spending limits that go along with them.
Rubin also made two $2,000 contributions to the successful 2004 Senate campaign of Ken Salazar (D-Co.)—a campaign that highlights another connection to Richardson, one that should have raised warning flags to the Obama campaign.
Salazar, currently Obama’s pick for Interior secretary, in 2004 hired as his campaign chairman Michael J. Stratton of Littleton, Colorado. Stratton has long been a senior political advisor to Richardson, and in the 2008 campaign he was also a fundraiser for Richardson’s presidential run.
But Stratton has also been a state and federal lobbyist, with CDR as a client. In 2004, when CDR got the $1.5 million contract from Richardson’s administration, Stratton was representing the firm.
(Stratton is also an alumnus of the Clinton administration’s Commerce Department, and so it’s not too far-fetched to imagine he had a job waiting for him in Richardson’s Commerce.)
So, Richardson’s advisor and fundraiser was lobbying for a firm that was donating to Richardson’s campaigns—and that firm ended up winning a $1.5 million contract for giving financial advice. Nice work if you can get it—and getting work from governments while donating heavily to politicians seems to be at the heart of CDR’s business model.
So far, we’ve found nothing illegal in what CDR has done, and also nothing extraordinary. There are hundreds of companies out there whose lifeblood is taxpayer money and who, fittingly, donate heavily to important politicians. Last month, this column listed three such donors to Richardson who have been enriched by New Mexico’s taxpayers.
So here’s the problem: Obama is promising perhaps a trillion dollars in stimulus spending without giving specifics right now. That’s fine, Obama doesn’t know the details of every public-works need in the country.
The new administration will take advice from knowledgeable people—which will include lobbyists. Whose investments will be most aided by this “stimulus”? Which companies will get the contracts? You can guess the winners of stimulus money will have a strong correlation with who has the best lobbyists.
Increasing the size of government inevitably introduces more opportunities for corruption and insider-dealing. Indeed, it was on an infrastructure project, exactly the sort of the public works Obama wants to massively expand, that CDR got its now-questionable contract.
Obama has made it very clear he wants to increase government’s role in the economy. But he’s also said he wants to curb the influence of corporate lobbyists. The Richardson story points to how those two goals are at odds.
Thanks to the Bush bailouts, we’re already experiencing an explosion in federal lobbying. Bringing Richardson, and his love of public-private partnerships, in to run Commerce would have exacerbated that.
With Richardson having withdrawn, Obama now has a chance to step away from Richardson-style corporate-government relations and towards the good government he promised.
Examiner columnist Timothy P. Carney is editor of the Evans-Novak Political Report. His Examiner column appears on Fridays.
