U.S. Attorney: Richardson Not "Exonerated"

New Mexico's top federal prosecutor confirmed Friday that no charges will be brought against Democratic Gov. Bill Richardson and his former top aides after a probe of an alleged pay-to-play scheme prompted him to withdraw his nomination as U.S. commerce secretary.

But U.S. Attorney Greg Fouratt said the decision not to bring charges "is not to be interpreted as an exoneration of any party's conduct."

In a letter sent to defense attorneys, Fouratt said a yearlong federal investigation "revealed that pressure from the governor's office resulted in the corruption of the procurement process" so that state bond deal work went to a Richardson political donor in 2004.

At a news conference in Havana, where he was wrapping up a weeklong trade mission, Richardson refused to comment on the Justice Department investigation, saying only "I'm not talking about that."

Richardson spokesman Gilbert Gallegos said in a statement Friday that Fouratt's letter "is wrong on the facts and appears to be nothing more than sour grapes."

On Thursday, before seeing Fouratt's letter, Gallegos had said Richardson was "gratified that this yearlong investigation has ended with the vindication of his administration."

The decision not to seek indictments was made by Justice Department officials in Washington, according to two people familiar with the case who spoke to the AP before defense lawyers received Fouratt's letter late Thursday. The sources spoke on condition of anonymity because they were not authorized to comment publicly about the case.

However, Attorney General Eric Holder was not involved in the decision to end the case, according to a Justice Department official, speaking on condition of anonymity because the person was not authorized to discuss the decision.

Fouratt didn't return telephone messages seeking further comment.

After 11 years as a federal prosecutor, Fouratt was elevated to U.S. attorney in January 2008 when a panel of New Mexico federal judges, addressing a vacancy, determined a presidential appointment wasn't imminent and exercised its authority to seat the position.

Joseph diGenova, a Republican and former U.S. Attorney during the Reagan administration, called Fouratt's letter "stupid" because it makes allegations of corruption after the case is over.

"That letter is an outrage and the U.S. Attorney who wrote it should be fired. The case is closed. If he had charges, bring them. Otherwise, he should shut up. He's being a politician now, not a prosecutor," diGenova said.

Richardson took office as governor in 2003, having served as a congressman from New Mexico, a roving diplomatic troubleshooter and as President Bill Clinton's energy secretary and U.N. ambassador.

Recently, Richardson has returned to the diplomatic limelight, meeting with a delegation of North Koreans earlier this month in Santa Fe and the governor was in Cuba this week for a trade mission.

The U.S. attorney office in New Mexico began an investigation last year into the hiring of a Richardson political donor, Beverly Hills-based CDR Financial Products Inc., as a financial adviser on state transportation bond deals. The state work generated almost $1.5 million in fees for CDR in 2004-2005.

CDR chief executive David Rubin and his firm contributed $110,000 to Richardson political committees from 2003 to 2005. The largest of those contributions, $75,000, was made less than a week before CDR was selected in June 2004 by the New Mexico Finance Authority to handle the reinvestment of idle bond proceeds.

Investigators reviewed whether Richardson's former chief of staff, David Contarino, played a role in the hiring of CDR. A grand jury subpoenaed records from the governor's office about CDR and former Richardson aide David Harris and Mike Stratton, a political adviser.

Harris served as Richardson's deputy chief of staff and then became executive director of the Finance Authority, which selected CDR for the bond financing work.

Stratton, a Denver-based political consultant, served as a senior adviser to Richardson's 2008 presidential campaign and was a consultant to CDR and another financial firm when the state put together the transportation bond deals in 2004.

Contarino has said they acted "appropriately and ethically at all times and a fair." Stratton did not respond to telephone messages seeking comment.

Paul Kennedy, a lawyer for Harris, said Friday that his client was "obviously much relieved that this ordeal is over for him."

The Richardson administration continues to face pay-to-play allegations in a whistleblower lawsuit brought in state court.

A former chief investment officer for the state's educational retirement program alleges that political considerations influenced state investment decisions. Contarino and other Richardson appointees are named as defendants in the lawsuit. They say there was no wrongdoing.

Federal agents also have questioned New Mexico investment and pension agency staff about a financial adviser entangled in a New York state pension fund scandal, and a federal grand jury has subpoenaed documents related to third-party placement agents on New Mexico investments. One of those marketing agents was the son of a Richardson political supporter who earned nearly $22 million in fees for helping money management firms win state investments. Officials with the State Investment Council and the educational pension program told legislators this week that the agencies are not the subject of the federal investigation.