Commerce Pick Richardson Withdraws, Citing N.M. Probe

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Richardson Quits As Cabinet Pick

Gov. Bill Richardson has withdrawn his nomination as President-elect Obama's new Commerce Secretary over a legal inquiry in N.M. Some feel this is a sign there may be flaws in Obama's vetting process.

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A legal source familiar with the investigation said yesterday 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 agents are said to have communicated that the governor's top aides -- and even Richardson's actions -- were under scrutiny. At least two sources familiar with the investigation said some evidence raises concern about the propriety of the Richardson administration's interactions with a donor.

Obama aides declined to comment on any conversations the transition team may have had with the FBI about the investigation.

The inquiry springs from a long-running nationwide investigation by the Justice Department into "pay-to-play" practices in local government bond markets. Federal investigators are questioning whether financial firms have lavished politicians with money and gifts in exchange for high fees on work advising municipal and local governments on investments.

In mid-December, Richardson spokesman Gilbert Gallegos said the governor was "aware of questions surrounding some financial transactions at the New Mexico Finance Authority" and expected state officials to cooperate fully.

CDR's attorney, Richard Beckler, declined several weeks ago to elaborate on the investigation, but he told a Washington Post reporter Dec. 15 that the company "has always tried to abide by these byzantine campaign finance regulations and is cooperating fully with this investigation."

The suddenness of Richardson's withdrawal renewed questions about the Obama team's vetting procedures. The New Mexico investigation had been publicized since the summer, yet aides to the president-elect said yesterday 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."

A senior transition aide said yesterday that Richardson had assured the team that he would emerge unscathed by the investigation and that there was no reason to think otherwise. "But it became clear that confirmation hearings would have to be delayed until the investigation was complete and that would take six weeks or, perhaps, longer. Governor Richardson concluded that this was too long, and he decided to withdraw," the aide said.

Gallegos, the Richardson spokesman, said yesterday that the governor considered asking Obama to delay sending his name to Capitol Hill until the case was concluded.

"He was hopeful that his name would be cleared and it would be wrapped up before his confirmation," Gallegos said. Over the weekend, when it became clear that would not happen, Richardson decided to withdraw, Gallegos said.

Obama praised Richardson yesterday and said that he looked forward to having the governor serve his administration in some capacity.

Staff writer Chris Cillizza contributed to this report.