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Richardson withdrawal jars transition

The candidate for secretary of Commerce faced pressure from a federal investigation into one of his political donors.

By Staff writer / January 5, 2009

Commerce Secretary-designate and New Mexico Gov. Bill Richardson withdrew his nomination on Monday amid a grand jury investigation. Here, Mr. Richardson and President-elect Barack Obama departed after a news conference in Chicago on Dec. 3.

Pablo Martinez Monsivais/AP/FILE

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Washington

President-elect Obama’s smooth assembly of his cabinet has hit a jarring pothole with New Mexico Gov. Bill Richardson’s decision to withdraw his name from consideration as the next secretary of Commerce.

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Governor Richardson announced on Jan. 4 that he would not pursue the Commerce job due to a federal investigation into how one of his political donors landed a lucrative state transportation contract.

While insisting he would ultimately be cleared in the grand jury probe, Richardson said the matter “would have forced an untenable delay in the confirmation process.”

Now Richardson, an affable backslapper who served seven terms in Congress, won’t be around to help lobby lawmakers for the new administration’s planned economic stimulus package.

The Obama transition team will have to rush to fill the key post as soon as possible. In addition, Obama officials will inevitably face questions about how thoroughly they vetted Richardson, in light of public disclosures about his ongoing legal troubles.

There’s no public evidence that transition officials asked Richardson to step aside. But they don’t appear to have tried particularly hard to talk him out of his decision, either.

Mr. Obama himself said in a statement that he accepted Richardson’s withdrawal “with deep regret,” and that he looked “forward to his future service to our country and in my administration.”

Richardson’s political problem may have been that the legal troubles he faces echo the “pay to play” allegations recently leveled against Illinois Gov. Rod Blagojevich (D).

At issue in Richardson’s case is the relationship between the New Mexico state government and CDR Financial Products, a Beverly Hills, Calif., company with business dealings across the country.

In Albuquerque, a federal grand jury is investigating whether CDR Financial received a contract with the New Mexico Finance Authority due to improper pressure from Richardson or another state employee, a source with knowledge of the probe told the Associated Press.

CDR Financial made about $1.5 million advising the New Mexico authority on financial matters related to transportation bonds. Prior to landing the work, the company’s president, David Rubin, gave about $100,000 to two political action committees started by Richardson.

Mr. Rubin, in a statement issued Jan. 4, said his firm “adamantly doesn’t practice pay-for-play under any circumstance on any playing field.”

“Pay-to-play” refers to the practice of politicians demanding contributions from contractors or other figures who want to do business with the government. The FBI in recent years has redoubled efforts to investigate instances of public corruption, allocating more agents and money to pursuing the subject. “Pay-to-play” allegations dealing with government bond markets have been one of the bureau’s special areas of focus.

In Illinois, where Governor Blagojevich has been accused of trying to sell an appointment to Obama’s old Senate seat, a new “pay-to-play” law took effect Jan. 1. The law will prohibit contractors that do business with the state from giving money to officials who oversee their bids or contracts.

News stories about the federal inquiry into CDR Financial’s actions first appeared in New Mexico last August. But Obama transition officials recently had become concerned that the investigation was taking longer than they had anticipated and could have delayed Richardson’s confirmation hearings for weeks, according to wire service reports.

“I think our vetters have done a good job,” said press secretary-designate Robert Gibbs on Jan. 4.

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