Richardson Drops Bid for Commerce Secretary Post

New Mexico Gov. Bill Richardson abandoned his nomination to become commerce secretary under pressure of a grand jury investigation into a state contract awarded to his political donors—an investigation that threatened to embarrass President-elect Barack Obama.

Richardson insisted he would be cleared in the investigation and Obama stood by the governor as an “outstanding public servant.” But both men said it has become clear that a grand jury probe would not be finished in time for Richardson’s confirmation hearings and could keep him from filling the post in a timely matter.

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. 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 nearly $1.5 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.

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A senior Obama adviser said Richardson gave assurances before he was nominated last month 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.

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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.

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[Richardson] 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 rogue nations. Obama also considered him to be secretary of state.

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.

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.

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