Earlier this month, Governor Bill Richardson decided to withdraw his nomination for commerce secretary in order to, in his explanation, avoid making a spectacle out of the confirmation process. The unnecessary distraction, he feared, would come about from possible improper payments to his Political Action Committees from companies that had received bond payments from New Mexico municipalities.

It turns out that cartel and anti-trust violations may be rampant in the municipal bond world, made especially harmful due to the amount of notes and bonds that governments sell each year-about $400 billion worth. The issues surrounding Governor Richardson’s particular case could just be the tip of the iceberg.

According to The New York Times, at least three federal agencies and several attorneys general have been working for years to uncover collusion among independent specialists hired by municipalities to distribute bond packages. According to the Times, one of these specialists was recorded during a phone conversation saying, “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.”

Municipalities would then obliviously pay the vendor that the specialist recommended, often at inflated prices. Combined with the minuscule regulation in municipal bonds, this activity has been able to safely occur for some time.

Despite this shocking news, it does look like there might be light at the end of the tunnel. In a related story, President Obama made his first public act in office today to enact new, stringent laws on lobbying. Perhaps this ethics-in-contracting mindset will trickle down to the smaller, municipal level in order to stop antitrust in bond markets from escalating ever further.