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Contract earned Rendell donor $600,000

| Wednesday, Jan. 7, 2009

HARRISBURG -- Gov. Ed Rendell was not aware the Pennsylvania Housing Finance Agency awarded a no-bid contract in 2003 to a California company headed by a member of his transition team for the Department of Revenue, his spokesman said Tuesday.

Since then, CDR Financial Products has collected nearly $600,000 as a financial adviser to the housing agency, according to figures provided by Brian Hudson, the agency's executive director. Its current contract is for $45,000, Hudson said.

CDR's president, David Rubin, donated $35,000 to Rendell's campaigns -- $20,000 of it in 2002, state records show.

The prominent businessman is caught up in a grand jury investigation that ended any role for New Mexico Gov. Bill Richardson in President-elect Barack Obama's administration.

Rubin donated $100,000 in 2003 and 2004 to the political committees of Richardson. The contributions came both before and after Rubin's company won a state contract to help finance $1.4 billion for highway and transportation projects, a contract that brought $1.5 million in business for CDR.

In 2005, he donated $10,000 to Philadelphia Future PAC, which is controlled by Comcast executive David Cohen, a close confidant of Rendell's who served as his chief of staff when he was Philadelphia mayor.

"The administration has had absolutely no role in choosing the firm to do this work at PHFA," said Rendell spokesman Chuck Ardo. Rendell was elected in 2002 and took office in January 2003.

Hudson said he made the decision and wasn't contacted by anyone in the governor's office or the transition team. A veteran of several administrations over 34 years, Hudson became executive director of the housing agency in 2003.

"From my perspective, it is much ado about nothing," Ardo said.

In a statement on his company's Web page, Rubin has denied engaging in "pay to play," a reference to companies and individuals who make political contributions or personal gifts to public officials in return for government contracts. He could not be reached for comment.

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. In New Mexico, CDR donated $100,000 to Richardson's campaign committees.

Richardson has said he will be cleared but that the investigation likely would have disrupted a timely nomination.

CDR has other ties to Pennsylvania.

The company in 2006 was paid $225,000 as a "swap adviser" on City of Philadelphia Gas Works bonds, according to a memo to city officials from broker JP Morgan.

The company has been represented in Harrisburg by Philadelphia lawyer Alan Kessler, a longtime fundraiser for Rendell, state records show. Kessler could not be reached by phone or e-mail. Kessler as a lobbyist listed thousands of dollars of expenditures for CDR in 2006. It could not be determined whether he still represents CDR.

Records show Rubin donated $5,000 in 2003 to Philadelphia-based political action committee Citizens Action. The committee was set up by Philadelphia attorney Ronald A. White and operated from his Center City office.

A federal grand jury in 2004 indicted White, along with former Philadelphia City Treasurer Corey Kemp and two officers of New Jersey-based Commerce Bank in a pay-to-play case. A prolific fundraiser for then-Mayor John F. Street, White died before being brought to trial.

Kemp, who was charged with accepting bribes in return for awarding city business to the bank, was found guilty in 2005 and is serving a 10-year prison sentence. Two bank officers were convicted.

Ardo said Rendell received "contributions from a well-known wealthy donor who is known to make contributions to Democrats at all levels of government. ... It is not surprising the firm does work for other government entities."

The $20,000 Rubin gave in 2002 is not a significant contribution considering Rendell got much larger ones, Ardo said.

The American Spectator reported Tuesday that Rendell is under investigation, but Ardo said the publication "has no way of knowing whether there's an investigation." The governor and his staff have not been contacted about any supposed investigation, Ardo said.

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