Monday, January 26, 2009

there's a "question" about who CDR was advising

marjorie says...

You know those financial deals that CDR Financial put together for the New Mexico Finance Authority as an advisor on the GRIP project? They're called SWAPs? Well it seems that because the "complex contracts" were made with a variable interest rate the state is now at risk and has had to post about $16 million in collateral. The entire piece by Colleen Heild and Mike Gallagher at the Albuquerque Journal is worth the read. But here is the part that really got me:

CDR was paid more than $950,000 out of bond proceeds, but Finance Authority boss Bill Sisneros, who took over after the initial deal with CDR was done, says the company's role in the bond transaction isn't clear.

He said, "CDR was paid by the counter-parties in the swaps, so there is a question of who they were advising." The swaps have saved the state about $8 million in lower interest costs since they were approved in 2004, Duff said.

Um, is this a round about way of saying the NMFA is pretty clear that the state's financial adviser was actually looking out for the interests of the banks who were our "counter-parties"?

Sounds like it to me.

Just to remind folks: CDR Financial is the company at the heart of the federal investigation into whether or not "pay to play" deals were being made with the Richardson administration. CDR was hired to advise the NMFA back in 2004 regarding how to refinance state transportation debt in such a way that the state would save money. The outcome has been the ability to build such things as the Rail Runner from Belen to Santa Fe. Since then, it's emerged that CDR is accused of colluding with banks to "bid rig" in the municipal bond market across the nation.