The FBI is reportedly investigating the "inner circle" of New Mexico Gov. Susana Martinez over a controversial deal for a casino and horse race track. The moderate Latina governor, a rising star in the GOP nationally, campaigned on stamping out corruption after pay-for-play questions were raised about previous Democratic Gov. Bill Richardson, but the Santa Fe Reporter reports that federal agents have expanded their investigation:

SFR’s sources, who request anonymity because they fear retribution, say the FBI interviewed them about key aspects of the Downs deal: the bidding process, and the relationships between Downs players and top public officials. Specifically, they say the federal agency asked about consulting payments to Jay McCleskey, Martinez’ top political advisor (who is not a state employee). An attorney for one of the campaign staffers interviewed by the FBI confirms the interview occurred within the past two weeks.

The deal has been controversial from the start, involving a multi-millio dollar 25-year lease to a politically-connected operator that critics say has a poor record, but a cozy relationship with the governor's office. Owners and executive of the firm donated $80,000 to Martinez’ campaign and political action committee. The State Auditor said it is releasing its own report on the matter "very soon.”

Advertisement:

No wrongdoing has been proven or even officially alleged, but the issue could be a distraction for Martinez, who could run for the Senate in 2014 (though it's far more likely she will run for reelection instead) or mount a bid for the presidency in 2016.

UPDATE: A Martinez spokesperson noted that KRQE-TV reported last night that the Santa Fe Reporter got the story wrong and that the FBI was not investigating the racino deal, but alleged hacking of campaign emails instead. Indeed, today, her former campaign manager was indicted on charges of "hijacking the campaign’s internet site and intercepting emails to-and-from Martinez and her staff."

UPDATE II: In a statement, SFR editor Alexa Schirtzinger said: "SFR stands by the veracity of its story... As with any story, we took great pains to verify the information we published. However, we continue to honor our sources' requests for anonymity because we believe they have a justifiable fear of retribution."

Advertisement:

The paper has also posted a blog post with more info here.