The American Spectator

On the Prowl

The Big Fix

By The Prowler from the February 2009 issue

(Page 2 of 2)

The Obama transition team was aware of New Mexico governor Bill Richardson's relationship with CDR Financial Products, the firm currently under investigation, because Richardson had introduced the firm's founder, David Rubin, to Obama fundraisers during the Democratic convention in Denver last August. Richardson withdrew his name from nomination for commerce secretary due to a grand jury investigation into possible financial dealings between his New Mexico administration and Rubin's firm. But it isn't just Obama and Richardson that Rubin has ties to. 

According to federal law enforcement officials familiar with the investigation, federal officials are also looking into CDR's political and financial ties to Pennsylvania governor Ed Rendell, as well as to Democratic state and local officials in Illinois, California, Florida, and Pennsylvania. Rendell placed Rubin on a political patronage commission in Pennsylvania, and Rubin was also given a seat on a Los Angeles City commission back in 2002, both seemingly as the result of monetary contributions to political action committees. Rubin has also been a financial supporter of Rev. Al Sharpton. CDR also had close business ties to Freddie Mac and Fannie Mae, marketing and selling financial instruments created through low-income housing "lease to own" programs across the country. "If someone wants to understand just how deep Democrats are into the housing bubble and the economic crisis, they should look at some of the financial wheeling and dealing around some of those 'lease to own' programs," says a former Freddie Mac lobbyist based in Washington. "It's a veritable 'who's who' of Democratic state and local politics from New York to Los Angeles." 

Rubin, founded the firm known for many years as Chambers, Dunhill, Rubin & Co, though there is no Chambers or Dunhill associated with the firm. It appears that after a number of embarrassing IRS investigations into alleged back-door deals related to municipal bond financing in Atlanta and other localities in the late 1990s, the firm's name was changed to CDR Financial. 

According to a Bloomberg News report and New Mexico records, between 2003 and 2004, CDR made $951,566 advising the New Mexico Finance Authority on $420 million of interest rate swaps. By comparison, when New York City offered $900 million in derivatives, it paid its adviser about $400,000. 

"Long before Bill Richardson was governor, New Mexico was known to be one of the most corrupt states in the country," says a current Federal Bureau of Investigations official who has overseen criminal investigations related to drug trafficking and organized crime in the state. "If there is anything to this investigation, it appears that it's just politics as usual for New Mexico."

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