For this week’s issue, I threw together a crossword puzzle for those among us who’ve been obsessed with the investigation into whether Richardson broke the law when the New Mexico Finance Authority awarded (or rewarded) an enormous contract to one of Richardson’s biggest campaign contributors.

Here’s a PDF if you want to give it a go without the print edition. And here is the answer sheet.

Well, Lt. Gov Diane Denish decided to issue an after-hours official statement in reaction to “News Reports Clearing Governor Richardson and Staff” and boy, is it anything but celebratory.

Assuming news reports are accurate this is good news for the people of New Mexico.  But the fact remains that public confidence has been eroded by the numerous investigations into possible wrongdoings by other government officials.  We need strong ethics reform to make state government more open and accountable and I will continue to lead that fight.

Is it just me or does that response seem a) skeptical that Richardson’s in the clear, b) resentful that Richardson’s appearance of wrongdoing screwed up her plans earlier this year and c) an indication that she won’t be asking Richardson to stump for her?

Here’s a new wrinkle in the slowly unfolding saga around Gov. Bill Richardson and CDR, a financial advisory firm hired by the state that just happened to be a major Richardson campaign donor.

A couple of weeks ago, we asked, “Did the labyrinthine financial deals the state entered under [Richardson's] watch with companies like CDR actually save taxpayers money? Or is this more of the alchemy that brought down Wall Street last fall?”

Today, Barry Massey of the Associated Press reports that the state is on the hook for $16 million in collateral, because somebody at the New Mexico Finance Authority failed to properly scrutinize a complex bond deal negotiated with CDR.

“The collateral calls represent more than a financial inconvenience for the state; they mean fewer dollars available for highway construction projects,” Massey writes.

How did this happen? The experts shrug.

“We don’t think anybody at the Finance Authority internally could have had the depth and breadth of experience to make this assessment at that time,” the Finance Authority’s chief financial officer tells Massey. “The issue in my mind is there may have been [outside contractors] that also had a duty to inform us … [T]his would have been something CDR, as a swap adviser, should have been qualified to address and should have addressed.”

The blog over at Harper’s Magazine has a rebuttal to that tortured Wall Street Journal editorial the other day, which argued that the CDR hubbub had vindicated the Bush administration’s decision to fire U.S. Attorneys who didn’t kowtow to its political agenda, like New Mexico’s own David Iglesias.

The reasoning is apparently something like this: there is corruption in New Mexico state government. President Bush was right to fire David Iglesias, a Republican, for failing to go after it. But this demonstrates a failure to appreciate even the most basic facts surrounding the scandal.

The mag’s Scott Horton asked Iglesias what he thought of the editorial. The former U.S. Attorney said:

The Wall Street Journal’s nonsensical editorial tries to argue about matters no longer in controversy. The official DOJ investigation into the U.S. Attorney firings established conclusively that the firings were “fundamentally flawed.” Every reason given for my ouster was reviewed and rejected by the Justice Department’s Inspector General, Glenn Fine, who characterized the proferred reasons as “disingenous after the fact rationalizations.” If this editorial represents the logical reasoning ability of the board, I have profound doubt as to their ability to understand the utter sanctity of a prosecutor’s independence and integrity.

“Reading the Journal’s editorial, you get the distinct feeling that its author doesn’t read the news reports in his own paper, or any newspaper, for that matter,” Horton writes. Ouch.

Today’s New York Times has the best context piece written so far on the nationwide bid-rigging investigation that’s snared up a campaign contributor to Gov. Bill Richardson, CDR Financial Products, and stalled Richardson’s hopes of working in the Obama administration.

Here’s the heart of the scandal reduced to a quote:

Christopher Taylor, who retired in 2007 as executive director of the [IRS] Municipal Securities Rulemaking Board, said the evidence amassed so far included tape-recorded phone calls, in which the independent specialists who are supposed to help local governments pick their bankers could be heard telling bankers: “We want you to bid on this deal, but you’re not going to get it — you’re going to get the next one. We want you to submit a sloppy bid.”

The feds’ investigation suggests another level of corruption: That Richardson’s team, in turn, rigged the selection of those supposedly “independent specialists,” steering business to firms like CDR that contributed to Richardson’s campaigns. Of course, there’s been no charge to that effect, so far.

Meanwhile, some key players — in particular, Richardson’s friend Mike Stratton, whose firm lobbied the New Mexico Finance Authority on behalf of CDR — continue to duck reporters’ calls.

When SFR reached his office yesterday, a secretary said that Stratton was traveling on “an open-ended ticket. Whenever his work is done, he’ll be back.”

We’re guessing that’ll be around the time this all blows over.

Another tidbit — in a story the other day, The New Mex’s Steve Terrell paraphrased former U.S. Attorney David Iglesias as “stressing he’s not involved in the investigation” into CDR and Richardson.

Reached by SFR, Iglesias clarifies that his comments to Terrell were “strictly about grand jury procedure — I’m not commenting on the investigation and how long it’s been going on.”

Well, we know it must’ve started before November, 2006, when the feds raided CDR’s offices in Beverly Hills. If this were an entirely politically motivated investigation, you’d think the timing of those raids would’ve been a little better.