Pay to Play:  Firm receives gov't contract after donating to Richardson

ALBUQUERQUE, N.M. -- A federal grand jury is investigating how a California firm that contributed to the political activities of New Mexico Gov. Bill Richardson, the nominee to head the Commerce Department, won a lucrative government contract.

A person familiar with the proceedings told The Associated Press on Tuesday that the panel is looking into possible "pay-to-play" dealings between CDR Financial Products and someone in a position to push the contract through with the state of New Mexico. The person asked not to be named because the proceedings are secret.

The proceedings follow an FBI probe in which investigators sought documents from the New Mexico Finance Authority. Investigators also interviewed former and current authority officials about New Mexico's 2004 contract with CDR for the $1.6 billion transportation program.

CDR was paid a total of $1.48 million in 2004 and 2005 for its work, according to documents provided by the state.

Asked whether the probe focused only on CDR's actions in securing or executing the contract, the person with knowledge of the investigation said, "It is more than that."

Richardson ignored two shouted questions about the company at his afternoon news conference in Santa Fe and left the room.

Richardson drops bid for commerce secretary post

Richardson's withdrawal was the first disruption of Obama's Cabinet process and the second "pay-to-play" investigation that has touched Obama's transition to the presidency. The president-elect has remained above the fray in both the case of arrested Illinois Gov. Rod Blagojevich and the New Mexico case.

A federal grand jury is investigating how a California company that contributed to Richardson's political activities won a New Mexico transportation contract worth nearly $1.5 million. Richardson said in a statement issued by the Obama transition office that the investigation could take weeks or months but expressed confidence it will show he and his administration acted properly.