Ex-investment officer claims NM wasted $90 million

A former investment officer for the state's educational pension program claims New Mexico taxpayers lost more than $90 million in an alleged "pay-to-play'' scheme in which political contributions to Gov. Bill Richardson influenced the awarding of investment business.

Frank Foy alleges in a lawsuit that the Educational Retirement Board invested $40 million in collateralized debt obligations CDOs offered by Vanderbilt Capital and Vanderbilt Financial.

The lawsuit also says the state Investment Council invested $50 million in worthless CDOs through Vanderbilt.

Pay-to-play allegations are at the center of a federal grand jury investigation into how a top Richardson political donor won lucrative state transportation contracts. The disclosure led to Richardson withdrawing his nomination as U.S. commerce secretary.