Citing investigation, Richardson withdraws as Cabinet nominee

WASHINGTON — New Mexico Gov. Bill Richardson withdrew his name from nomination as commerce secretary Sunday, saying a federal probe that has reached into his office could last months and was certain to bog down his confirmation.

President-elect Barack Obama said he would move quickly to fill the position but named no replacement for Richardson, who intends to remain governor.

Richardson's withdrawal was the first disruption of Obama's Cabinet process and the second "pay-to-play" investigation that has touched Obama's transition to the presidency. Besides Richardson's case, Illinois Gov. Rod Blagojevich is accused of trying to sell the Senate seat that Obama gave up to become president.

Richardson, in a statement released Sunday, said "unequivocally" that he and his administration "have acted properly in all matters and that this investigation will bear out that fact."

But, he added, "I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process. 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."

Reports of a federal investigation into possible pay-to-play actions by a California firm that did business with New Mexico first surfaced in mid-December, after Obama had tapped Richardson for the post. A federal grand jury is looking into how CDR Financial Products, a California-based firm that gave $100,000 to Richardson political committees, got $1.5 million in state contracts.

The Beverly Hills-based firm and its president, David Rubin, together gave $100,000 to two Richardson organizations shortly before winning those lucrative state contracts, records show.

CDR's selection drew FBI interest because there was not an initial list of the most qualified bidders. The bidding was reopened for review, and a state committee headed by one of Richardson's former top aides later helped select CDR.

A legal source familiar with the investigation said Sunday that FBI agents, working on the Senate's behalf and conducting a background check of Richardson for the Commerce job, conveyed to Obama's transition team the seriousness and significance of the Albuquerque grand-jury probe.

The inquiry springs from a long-running nationwide investigation by the Justice Department into "pay-to-play" practices in local government bond markets. The suddenness of Richardson's withdrawal renewed questions about the Obama team's vetting procedures. The New Mexico investigation had been publicized since last summer, yet aides to the president-elect said Sunday that they were not aware of the matter when Richardson was nominated. Richardson advisers insisted that the governor had relayed information about the investigation to transition officials before his name was announced.

"I think our vetters have done a good job," incoming Obama press secretary Robert Gibbs said last night, crediting the "impressive ... totality of our Cabinet picks."

Compiled from McClatchy Newspapers, The Associated Press and The Washington Post