Obama Cabinet nominee pulls out

Contract investigation bogs down Richardson; First bump in process for president-elect

Governor Bill Richardson denied fault.

WASHINGTON - Governor Bill Richardson of New Mexico yesterday told President-elect Barack Obama that he was withdrawing as nominee to be secretary of commerce amid a federal grand jury investigation into how some of Richardson's political donors won $1.5 million in state contracts. The move represented the first public snag in Obama's attempt to assemble his Cabinet.

Richardson denied wrongdoing but said the investigation would probably remain unresolved until well after Obama's inauguration and he didn't want to disrupt the new administration.

"Let me say unequivocally that I and my administration have acted properly in all matters and that this investigation will bear out that fact," Richardson, who also served in the Clinton Cabinet, said in a statement released by Obama's transition office. "But I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process."

Obama had tapped Richardson for the position despite news reports over the summer that a grand jury in Albuquerque was investigating $1.5 million in state highway contracts awarded to California-based CDR Financial Products. An executive with the firm had made contributions totaling more than $100,000 to three of Richardson's political committees. Richardson said yesterday that he expected that the grand jury's investigation will "extend for several weeks or, perhaps, even months."

Richardson's withdrawal was the first hitch in Obama's efforts to speedily assemble a government before he takes office in two weeks. The news was revealed hours before Obama traveled to Washington to resettle his family and begin an aggressive push for an economic stimulus bill that Obama has said will be his first legislative priority.

Lobbying for the stimulus package on Capitol Hill would probably have been among the new administration's first tasks for Richardson, a Democrat who spent seven terms in Congress before becoming United Nations ambassador and energy secretary during Bill Clinton's presidency.

As he accepted the withdrawal yesterday, Obama paid tribute to Richardson, 61, who would have been the highest-ranking Latino in the incoming administration. "It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the Cabinet in order to avoid any delay in filling this important economic post at this critical time," Obama said in a statement.

The president-elect's nominees are set to begin their confirmation hearings shortly, and Richardson's had not been expected to be particularly contentious. However, Senate Democrats and Obama's transition team have already had to wrestle with one gubernatorial scandal - an unrelated investigation that led to the arrest of Governor Rod Blagojevich of Illinois - that has emerged as a persistent distraction.

Obama acknowledged yesterday that he "must move quickly to fill the void left by Governor Richardson's decision." The president-elect had already filled all his Cabinet jobs and many others among the senior White House staff. (He also put Latinos at the head of the Interior and Labor departments.)

Richardson faced Obama in last year's Democratic primaries, finishing a distant fourth in both the Iowa caucuses and New Hampshire primaries before pulling out of the race. After the fall election, he became one of four former adversaries tapped for senior roles as Obama composed an administration inspired by Abraham Lincoln's so-called team of rivals.

Richardson was an unusually high-profile pick for the Commerce post, which recent presidents have often awarded to top political supporters and close confidants but rarely to major public figures. When he announced Richardson's return to the executive branch a month ago, Obama said he would join the "key economic team that is going to be dealing with the most significant issue that America faces right now."

Obama is scheduled to appear in Washington with other members of the economic team today.

Richardson will return to "the job I love," as he described his position as governor yesterday. Next year, his second term in the office will end, and he is barred by state law from running for the office again.

In their statements yesterday, both Obama and Richardson both pointed to the likelihood that Richardson could yet play a role in the new government. "I look forward to his future service to our country and in my administration," Obama said.