HARRISBURG -- The head of a financial firm at the center of a "pay-to-play" investigation that prompted the withdrawal of President-elect Barack Obama's nominee for Commerce secretary donated tens of thousands of dollars to Gov. Ed Rendell and has a contract in Pennsylvania.
David Rubin, president of Beverly Hills-based CDR Financial Products, donated $35,000 to Rendell in 2002 and 2005, state campaign finance records show.
"David Rubin is a longtime Democratic donor with whom (Rendell) has only a tangential relationship," Rendell spokesman Chuck Ardo said Monday. "He knew Mr. Rubin from his days as Democratic National Committee chair, and there was nothing unusual about asking a known donor for financial help."
"CDR Financial has no contracts with the administration although they do have a very narrow contract with (the Pennsylvania Housing Finance Agency)," Ardo said. "They are to be paid a flat fee of $45,000 for their services."
Ardo said CDR has had that contract since at least 2004, a year after Rendell became governor, "but we are looking into the possibility that there was a previous contract."
Rubin, who served on Rendell's 2003 transition team, said in a statement Sunday that CDR "adamantly doesn't practice pay-for-play under any circumstance on any playing field."
A federal grand jury met last month in Albuquerque to look at how the company won $1.5 million of work from the New Mexico Finance Authority in 2004, Bloomberg News reported.
CDR donated $100,000 to assist New Mexico Gov. Bill Richardson's efforts to register Hispanic and American Indian voters and pay for expenses at the 2004 Democratic National Convention. Bloomberg reported on the grand jury investigation Dec. 15.
Richardson, who served as Energy secretary under President Clinton, delivered a crucial endorsement for Obama during his primary battle with Sen. Hillary Clinton. He withdrew as Obama's nominee for Commerce secretary amid the federal probe into how his political donors landed a lucrative transportation contract.
Richardson said he will be cleared but that the investigation likely would have disrupted a timely nomination.
"Given the gravity of the economic situation the nation is facing, I could not in good conscience ask the president-elect and his administration to delay for one day the important work that needs to be done," Richardson said.
A person familiar with the investigation told The Associated Press that the grand jury is looking into possible pay-to-play dealings between CDR Financial Products and someone in a position to push the contract through the state of New Mexico.
State documents show CDR was paid $1.48 million in 2004-05 for its work on a New Mexico transportation program.
CDR and Rubin have contributed at least $110,000 to three political committees formed by Richardson, according to an AP review of campaign finance records.
CDR Financial Products creates and markets financial products and services. The company has negotiated more than $158 billion in transactions and executed more than 5,350 agreements, according to the firm's Web site.
The American Spectator reported yesterday that federal officials are looking into CDR's political and financial ties to Rendell, as well as to Democratic officials in Illinois, California, Florida and Pennsylvania.
State House Republicans last year introduced a package of bills aimed at limiting pay-to-play practices in Pennsylvania.
"Our members have serious concerns," said Stephen Miskin, a spokesman for House Majority Leader Sam Smith, R-Punxsutawney. "We think there needs to be major changes to Pennsylvania's campaign finance system."
The New Mexico investigation is one front in a nationwide inquiry by federal prosecutors into pay-to-play practices in the municipal bond market, Bloomberg reported. Pay-to-play refers to companies and individuals who make political contributions or personal gifts to public officials in return for government contracts.
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