Thursday, May 18, 2006


A version of this was published in The Santa Fe New Mexican
May 18, 2006

In January, attorneys general in dozens of states, including New Mexico, announced a $325 million class-action settlement with Ameriquest, a California-based mortgage company accused of predatory lending and unfair and deceptive practices.

Two months later, the Democratic Governors Association, chaired by New Mexico Gov. Bill Richardson, was wining and dining on Ameriquest’s tab at a DGA conference in Phoenix.

According to a report the DGA filed with the federal government, Ameriquest made an in-kind donation of $102,000 for catering and renting a facility March 31 during the DGA’s Spring Policy Conference.
The March donation was the biggest contribution Ameriquest made to the DGA. But it’s not the only one.

The company contributed cash totaling $61,000 to the DGA in 2005 plus an “in-kind travel” contribution valued at $7,708 on Sept. 29.

That’s about the same time that Richardson flew to Washington, D.C., to speak to a national conference of Mothers Against Drunk Driving and meet with the secretary of Homeland Security and Pentagon officials, according to a Sept. 30 news release from the governor’s office.

The release said DGA would pay for that trip.

Richardson spokesman Pahl Shipley said Wednesday that he couldn’t verify Ameriquest paid for that trip. “I honestly don’t know,” he said. “We don’t arrange his travel. That’s all done through the DGA.”

Richardson in recent weeks has made headlines for taking DGA-arranged trips in corporate jets owned by a major payday-loan company and a national tobacco giant.

Shipley gave the same answer he has given regarding contributions and in-kind gifts from controversial companies: Asked whether the contributions from Ameriquest influences Richardson’s policy decisions, Shipley said, “Absolutely not. The governor always puts the best interests of New Mexico first.”

Dutch treat: Whether or not it’s connected with the contributions, the former principal owner of Ameriquest, Roland Arnall, did get at least one thing from Richardson.

Last year, President Bush nominated Arnall to be ambassador to The Netherlands. Richardson endorsed the nomination, though many Democrats — notably U.S. Sen. John Kerry of Massachusetts — were opposing him because of the class-action suit against Ameriquest.

The nomination was stuck in the Senate Foreign Relations Committee for months. Only after Ameriquest settled with the states did the Senate finally confirm Arnall earlier this year.

Shipley said Richardson considers Arnall a friend. He said he didn’t know how long they have known each other. Richardson “respects him for being a leader of a very large company.”

Ameriquest the Beautiful: In settling the lawsuit, Ameriquest “admitted they made mistakes, and they’ve moved on, Shipley said. That’s obvious, or the Senate wouldn’t have confirmed him.” (Actually, according to the settlement, the company admitted to no wrongdoing, though it did agree to change many of its practices.)

According to the attorney general, the Ameriquest settlement is the second-largest consumer-protection settlement in history, after the $484 million agreement reached in 2002 with Household Finance.

Under the settlement, 1,523 Ameriquest debtors in New Mexico will get an estimated $913,800. The state is set to receive about $245,000 for further restitution to Ameriquest customers and to fund consumer-protection programs and pay the costs of the lawsuit.

Matthew Henderson of ACORN (Association of Community Organizations for Reform Now) said his group was at odds with Ameriquest for years. “They had extremely high fees,” he said. “They’d get people into mortgages regardless of their credit history.”

According to a July 29 article in The Washington Post, “In depositions, Ameriquest customers have alleged that they were promised good loan terms but instead got high rates, sometimes higher than they had previously been paying; that their incomes were overstated so they could qualify for the high-price loans; that appraisers overvalued their homes so they seemed valuable enough to secure the loan; and that they learned only after closing that they would be required to pay steep prepayment penalties if they sought to move to other lenders.”

Henderson pointed out Ameriquest closed down its offices in New Mexico in 2003, after the state Legislature passed the Home Loan Protection Act, which was designed to prevent companies from luring homeowners into mortgages they can’t afford.

Despite its generosity toward the DGA, Ameriquest hasn't dropped much money among New Mexico politicians. According to, the Web site of the Institute on Money in State Politics, only two Ameriquest contributions are recorded -- $1,000 to Patricia Madrid in 2002 and $2,000 to former Sen. Roman Maes in his unsuccessful 2004 race.

Madrid was part of the executive committee of state attorneys general that began investigating the conduct of Ameriquest. She also served on the negotiating committee for the settlement.

Sky King: Republicans probably won’t be squawking about the Richardson/Ameriquest relationship since Arnall is a Bush appointee and all. But they’ve got plenty of other items to have fun with.

Earlier this week, the state GOP paid for an ad blasting Richardson for a helicopter trip he probably wishes he’d never taken.

The spot features a man and a woman skewering the governor for criticizing Bush’s plan to dispatch 6,000 National Guard troops to help secure the U.S.-Mexico border.

“Let me get this straight,” the woman says. “Bill Richardson opposes using National Guard troops to secure the border. But supports using them to fly him around the state for weekend getaways with political cronies?”

She’s referring to a 2003 Richardson trip on a National Guard helicopter that included a stop in Chama to go horseback riding at the ranch of Santa Fe art-gallery owner and major Richardson campaign contributor Gerald Peters.

“This is a pathetic attempt to hide the fact that the Republican Party is weak on border security,” Richardson spokesman Gilbert Gallegos said Tuesday.

“The governor, on the other hand, declared an emergency, invested millions in additional law enforcement and is fighting for 265 additional Border Patrol agents.”

Reporter David Miles contributed to this report

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