New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state 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.
A federal grand jury is investigating how a California company that contributed to Richardson's political activities won a New Mexico transportation contract worth more than $1 million. Richardson said in a statement issued by the Obama transition office that the investigation could take weeks or months but expressed confidence it will show he and his administration acted properly.
A senior Obama adviser said that when Richardson was nominated, he gave assurances that he would come out fine in the investigation and the president-elect had no reason to doubt it. But as the grand jury continued to pursue the case, it became clear that confirmation hearings would have to be delayed for six weeks or even longer 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 that Richardson made the decision to withdraw and was not pushed out by Obama.
Obama said he has accepted Richardson's withdrawal "with deep regret."
"Governor Richardson is an outstanding public servant and would have brought to the job of Commerce Secretary and our economic team great insights accumulated through an extraordinary career in federal and state office," Obama said in a statement.
"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. 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," the statement said.
Richardson said in his statement that he will remain as governor and told Obama, "I am eager to serve in the future in any way he deems useful."
"I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process," Richardson said. "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."
The announcement came ahead of Obama's Monday meetings with congressional leaders on a massive economic recovery bill he wants lawmakers to pass quickly.
A person familiar with the investigation in New Mexico has 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 with the state of New Mexico.
State documents show CDR was paid a total of $1.48 million in 2004 and 2005 for its work on a transportation program.
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.
CDR and its CEO, David Rubin, have contributed at least $110,000 to three political committees formed by Richardson, according to an AP review of campaign finance records.
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.