PA Agency Chief: I Alone Chose CDR

Zachary Roth | January 6, 2009, 4:18PM

Brian Hudson, the executive director of the Pennsylvania Housing Finance Agency was not contacted by anyone in the office of governor Ed Rendell in regard to the 2003 no-bid contract awarded by the agency to CDR Financial Products, Hudson told TPMmuckraker moments ago.

Hudson said that at that time, only two firms had the technical expertise to do the bond-swap advisory work the agency sought, and that CDR Financial was selected over a rival, Swap Advisors, simply because its appeared to "bring more to the table."

Hudson added he had been pleased with the company's work, saying that CDR had saved the PHFA $2-3 million, and that the agency had renewed its contract with the firm each year, and continues to employ it.

But he allowed that he was troubled by the allegations against CDR, and would reconsider the agency's ongoing relationship with the firm when its contract came up for renewal in March.

Hudson added that he had never heard of Alan Kessler, the Rendell fundraiser who records show, has lobbied for CDR.

As we noted earlier, Pennsylvania governor Ed Rendell has received at least $35,000 in contributions from CDR founder David Rubin. New Mexico governor Bill Richardson, who also received money from Rubin, this weekend withdrew his nomination to be Commerce Secretary citing a federal probe into the company's contracts with his state.

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Topics: Bill Richardson, CDR, Ed Rendell

CDR

CDR Lobbyist Is Major Rendell Fundraiser

Zachary Roth | January 6, 2009, 3:28PM

Earlier today we noted Pennsylvania governor Ed Rendell's ties to CDR Financial Products, the firm that derailed Bill Richardson's bid to be Commerce Secretary. Now we've found another Rendell-CDR link.

State lobbying disclosure records from 2006 show that CDR was represented by Alan Kessler of the Philadelphia law firm Wolf, Block, Schorr and Solis-Cohen. Kessler is also the chair of the USPS board of governors.

Philadelphia magazine describes Kessler as a "big fundraiser" for Rendell. And his Wolf Block bio shows he's held a string of prime patronage posts in government and Democratic politics.

From the bio:

Kessler was appointed by Governor Rendell as Finance Chair of the Pennsylvania Democratic Party.

Kessler also served, according to the site, as co-chair of Rendell's two transitions, the first after Rendell was elected mayor of Philadelphia in 1992, and the second after he was elected Pennsylvania governor in 2002.

And Kessler is said to have served as finance vice chair of the Democratic National Committee (DNC), which Rendell chaired from 1999 to 2001.

Kessler did not immediately respond to a phone call and email from TPMmuckraker requesting comment.

As we noted earlier, CDR obtained a no-bid financial contract from a state agency, the Pennsylvania Housing Finance Agency (PHFA), in 2003. And its founder David Rubin has contributed $35,000 to Rendell.

Chuck Ardo, a spokesman for Rendell told TPMmuckraker: "The governor took no action on behalf of CDR."

Ardo added that the 2003 contract was given by PHFA, and that the governor had no role in selecting CDR -- the same thing he told the Pittsburgh Tribune-Review which first reported the existence of the contract this morning.

Brian Hudson, the PHFA's executive director, told the Tribune-Review that he made the decision to select CDR, and that he wasn't contacted by anyone from the governor's office.

Hudson did not immediately respond to a phone call from TPMmuckraker.

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Topics: Bill Richardson, CDR, Ed Rendell

Ed Rendell

Rendell, Too, Has Ties To Firm That Derailed Richardson Pick

Zachary Roth | January 6, 2009, 12:55PM

Since Bill Richardson withdrew as Commerce Secretary nominee, citing the investigation into CDR Financial Products, there's been speculation (I know, I know, it's the Spectator) that he might not be the only prominent elected official who received political contributions from the company, and also contracted with it for government business.

And it looks like he isn't.

Recent reports have noted that Pennsylvania governor Ed Rendell received significant contributions from CDR founder David Rubin -- whose company's various run-ins with the law are beginning to attract scrutiny.

Today the Pittsburgh Tribune Review puts those contributions at $35,000. But it also reveals that CDR does indeed have a contract - a no-bid contract, to be precise -- with a state agency, which appears to be similar to the one it has with a New Mexico government agency.

The paper reports:

Gov. Ed Rendell was not aware that the Pennsylvania Housing Finance Agency awarded a $160,000 no-bid contract in 2003 to a California company headed by a member of his transition team for the state Department of Revenue, his spokesman said today.

Since then, CDR Financial Products has collected an estimated $770,000 as financial advisor to the housing agency, said Brian Hudson, the agency's executive director. Its contract is for $45,000, Hudson said.

A story (via nexis) that appeared in The Bond Buyer, a trade publication, in May of 2006 sheds a bit more light on that contract. The story reports that:

The Pennsylvania Housing Finance Agency [will issue] $150 million in single-family mortgage debt starting Wednesday to help fund home loans for residents with low to moderate incomes.

...

CDR Financial Products is the agency's swap adviser.

An earlier statement given to the paper by Rendell's office also described the governor's relationship with Rubin as "tangential". But it did not mention that, as the Tribune-Review noted, Rubin served on Rendell's 2003 transition team when Rendell was preparing to become governor. Rubin is still touting the appointment on his company's website.

As we noted yesteday, CDR was also found to have paid for the then-Treasurer of the city of Philadelphia, Corey Kemp, to attend the 2003 Super Bowl. Kemp is currently serving a jail sentence on a corruption conviction, though CDR was not charged with wrong-doing.

CDR won its contract with the city without a competitive bidding process.

Rendell was mayor of Philadelphia until 2000, though no evidence has yet emerged that the city's contract with CDR dates to his tenure as mayor.

Late update: Hudson tells TPMmuckraker he wasn't contacted by the governor's office in regard to CDR.