Video: Richardson withdraws from Obama cabinet

NBC News and news services
updated 1/6/2009 3:45:49 AM ET 2009-01-06T08:45:49

The Cabinet that President-elect Barack Obama picked on a fast track has an unexpected opening, with New Mexico Gov. Bill Richardson, Obama's choice for commerce secretary, withdrawing under pressure of a federal investigation into how his political donors landed a lucrative transportation contract.

Richardson's withdrawal, first reported by NBC News' Andrea Mitchell, was the initial disruption of Obama's Cabinet process and the second "pay-to-play" investigation that has touched Obama's transition to the presidency. The president-elect has remained above the fray in both the case of arrested Illinois Gov. Rod Blagojevich and the New Mexico case.

Richardson insisted he would be cleared in a grand jury probe. But he and Obama said the investigation would have likely disrupted a timely nomination to a top economic post.

"I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process," Richardson said in a statement. "Given the gravity of the economic situation the nation is facing, I could not in good conscience ask the president-elect and his administration to delay for one day the important work that needs to be done."

Delays anticipated
Obama spokesman Robert Gibbs said he expected a new commerce secretary would be chosen soon but didn't have a timetable. Gibbs denied that those tasked to look into Richardson's background missed something.

A senior Obama adviser said Richardson gave assurances before he was nominated last month he would come out fine in the investigation. But as the grand jury pursued the case, it became clear that confirmation hearings would be delayed at least six weeks until the investigation was complete, said the adviser, speaking on condition of anonymity about the discussions because they were private.

Aides to both men insisted Richardson made the decision to withdraw and was not pushed out by Obama. But one Democrat involved in discussions over the matter said transition officials became increasingly nervous during the last couple of weeks that the investigation could become an embarrassment to Obama, who ran on a clean government pledge.

Richardson spokesman Gilbert Gallegos said the governor believed the investigation would be resolved by this time, but decided to withdraw when it became clear it would not.

In a statement, Obama praised Richardson and said he accepted his withdrawal "with deep regret."

"It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the Cabinet to avoid any delay in filling this important economic post at this critical time," Obama said. "Although we must move quickly to fill the void left by Governor Richardson's decision, I look forward to his future service to our country and in my administration."

Video: Will Richardson scandal hurt Obama? Richardson ran against Obama in the Democratic presidential primary. He is one of the most prominent Hispanics in the Democratic Party, having served in Congress, and in the Clinton administration as ambassador to the United Nations and energy secretary. As governor he has kept up an international profile with a specialty in dealing with rogue nations. Obama also considered him for secretary of state.

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Richardson said in his statement that he will remain as governor.

'Pay-to-play' dealings?
The announcement came ahead of Obama's Monday meetings with congressional leaders on a massive economic recovery bill he wants passed quickly. Obama transition officials said Richardson's withdrawal would not affect the stimulus plan because the Commerce Department was not heavily involved.

A person familiar with the investigation told The Associated Press that the grand jury is looking into possible "pay-to-play" dealings between CDR Financial Products and someone in a position to push the contract through the state of New Mexico.

Obama's new Cabinet?State documents show CDR was paid a total of $1.48 million in 2004 and 2005 for its work on a transportation program.

In a statement issued Sunday night, CDR's chief executive, David Rubin, described Richardson as "an exceptionally able and dedicated public official, who was highly deserving of the opportunity to hold a cabinet-level position in the new Obama administration." Rubin also said CDR "adamantly doesn't practice pay-for-play under any circumstance on any playing field."

CDR and Rubin have contributed at least $110,000 to three political committees formed by Richardson, according to an AP review of campaign finance records.

Richardson ran against Obama in the Democratic presidential primary, but withdrew after a poor showing in the Iowa caucuses and New Hampshire primary.

He is one of the most prominent Hispanics in the Democratic Party, having served in Congress and as President Clinton's ambassador to the United Nations and energy secretary. As governor, he has kept up an international profile with a specialty in dealing with rouge nations. Obama also considered him to be secretary of state.

The largest donation, $75,000, was made by CDR in June 2004 — a couple of months after the transportation financing arrangement won state approval — to a political committee that Richardson established before the Democratic National Convention that year.

In the Illinois case, Blagojevich is accused of trying to sell the Senate seat that Obama gave up to become president. Obama and two of his top aides have been interviewed by the U.S. attorney's office pursuing the case but have denied any knowledge of such a scheme and have not been accused by prosecutors of any wrongdoing.

NBC's Andrea Mitchell and The Associated Press contributed to this report.

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