Management & Labor

Scandals at Home Weaken New Mexico's Governor

When federal officials let it be known that New Mexico Governor Bill Richardson would not be indicted in the pay-to-play scandal that cost him a...
by | August 31, 2009
 

When federal officials let it be known that New Mexico Governor Bill Richardson would not be indicted in the pay-to-play scandal that cost him a post in the Obama cabinet, the news obviously came as a relief. Richardson had already ridden out the worst of the political storm at home, but it was clear that the scandal had hurt his political career and had damaged his prospects.

In January, a lawsuit charged that New Mexico's investment decisions were made largely to reward Richardson's political allies. The allegations grew out of an investigation into "finder's fees" paid to third-party consultants who arrange deals between state pension funds and investment brokers.

Money managers who have donated more than $640,000 to Richardson's campaigns and committees have obtained a significant share of New Mexico's investment business. Marc Correra, whose father is a major Richardson contributor, has received about $22 million in third-party placement fees. All of this triggered investigations by the FBI and Justice Department.

Richardson, who consistently denied wrongdoing for months before the feds finally cleared his name, has directed the state's two main investment boards to stop doing business with firms that use third-party agents and also banned campaign contributions from those seeking money-management deals. Still, the scandal has been the source of unending comment from his political enemies. The chairman of the state Republican Party had predicted that Richardson wouldn't even finish his term, although that prediction now looks wrong in light of the lack of any legal action against the governor. But with two former state treasurers and a former state Senate president in prison on unrelated corruption charges, ethics will inevitably be a major part of next year's gubernatorial election.

Richardson remains an assertive governor. This year, he put forward ambitious proposals in education and strong measures to combat drunk driving. But his influence already has been limited, not only by the scandal but also by relations with the legislature that were contentious even before pay-to-play became an issue.

Richardson took office as one of the most impressive members of his 2002 gubernatorial class. His unique combination of congressional, executive and foreign policy experience -- combined with his status as a highly visible Hispanic Democrat -- made him an instant player on the national stage. But the scandal, while not resulting in either criminal charges or resignation, does seem certain to place a ceiling on any future opportunities. "His chance of landing another big-time national position," says political scientist Gilbert Sanchez of the University of New Mexico, "has come and gone."

(Note: This version has been updated from the version appearing in print to reflect events that occurred after press time.)

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