Feds conduct Richardson corruption probe

ALBUQUERQUE, Dec. 16 (UPI) -- U.S. prosecutors are investigating the New Mexico administration of Secretary of Commerce-designate Bill Richardson for corruption, sources say.

Unnamed sources told Tuesday's Washington Post a federal grand jury is investigating whether a financial firm improperly won New Mexico state contracts worth more than $1.4 million shortly after making contributions to Richardson political action committees.

The investigation is part of a long-running nationwide inquiry looking at "pay-to-play" practices in local government bond markets, the newspaper said, and focuses on whether Richardson's office urged a state agency to hire CDR Financial Products.

A federal grand jury in Albuquerque was hearing testimony even as U.S. President-elect Barack Obama was introducing Richardson as his choice for commerce secretary Dec. 3. The grand jury was set Tuesday to hear testimony from officials at Richardson's political action committees and J.P. Morgan bankers, the Post said.

Richardson spokesman Gilbert Gallegos told the newspaper the governor was "aware of questions surrounding some financial transactions at the New Mexico Finance Authority" and expected state officials to cooperate fully.