An amended lawsuit filed Thursday (June 30) alleges that the office of former Gov. Bill Richardson was involved — on multiple fronts — in New Mexico’s State Investment Council controversy that reportedly diverted millions of dollars to politically connected figures with ties to Richardson.
A review of the amended lawsuit by Albuquerque Journal investigative reporter Mike Gallagher “outlines a web” of Richardson friends, associates and contributors who were involved in the “pay to play” charges that saw the State Investment Council (SIC) — which currently holds more than $15 billion in state assets — reportedly turn into a taxpayer-supported treasure chest that rewarded political pals, some of whom had questionable investment experience.
Richardson is not named as a defendant in the amended lawsuit and a spokesman for Richardson, Gilbert Gallegos, vehemently defended the former governor:
“After a thorough investigation of state investments, a federal grand jury has not found any wrong-doing by the Governor’s Office. When Gov. Richardson learned of the practice of investment institutions paying large fees to third-party marketers, he convinced the SIC to end the practice. These latest accusations are unfounded, and inaccurate and are politically motivated.”
Gallagher’s story cites a number of new allegations in the SIC case, including:
- Former Democratic National Committee CEO Marvin Rosen received what’s called a “third-party placement fee” (payment to someone who acted as an intermediary between an investment firm offering it services and the SIC board) and attempted to conceal it.
- California political consultant and Richardson contributor Julio Ramirez — who was unlicensed as a placement agent — received more than $2 million in fees from Aldus Equity and helped Aldus become an advisor to the SIC.
- Alfred Jackson of Texas — who served as an officer in a Richardson political committee — also helped grease the wheels for the SIC to hire Aldus Equity as an advisor and received $3.4 million in placement fees from various firms.
- SIC officials hired Fort Washington Capitol Partners LLC in 2004 on the condition that the firm pay a percentage of fees from the SIC to Guy Riordan (a close Richardson advisor and former chairman of the state Game Commission) although — according to the lawsuit — Riordan did no work to earn the payment. Gallagher’s story quotes Riordan saying that the allegations are “absolutely false.”
- A former Michigan congressman named Bob Carr received $100,000 in fees from a California firm for forwarding information to a member of Richardson’s staff about a company named Markstone to the SIC and exerting what the suit says was “political pressure” on then SIC Investment Officer Gary Bland to invest in the company. The amended lawsuit describes Carr as a “close friend and supporter” of Richardson.
There could be more revelations coming soon. Gallagher quotes current SIC spokesman Charles Wollman: “This is not the last amended complaint we will file. This is a first salvo.”
You can read Gallagher’s entire story by clicking here. (Sorry, subscription required.)