WASHINGTON — President-elect Barack Obama was dealt a setback to his incoming Cabinet on Sunday when Commerce Secretary-designate and New Mexico Gov. Bill Richardson withdrew from consideration amid a federal investigation into how a political donor from Beverly Hills won a lucrative state contract.
Richardson, a former presidential candidate who was secretary of Energy and U.N. ambassador in the Clinton administration, said in a statement that he was withdrawing because "a pending investigation" would have "forced an untenable delay in the confirmation process." He said the investigation "promises to extend for several weeks or, perhaps, even months."
Obama, en route to Washington for pre-inaugural meetings, said in a statement that he accepted Richardson's withdrawal "with deep regret."
"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.
A federal grand jury in Albuquerque is looking into whether CDR Financial Products in Beverly Hills received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees.
The state contract came about a few months before CDR and its president, David Rubin, contributed more than $100,000 to two Richardson political committees, campaign finance records show.
CDR Financial Products acts as an investment middleman by helping government and nonprofit entities broker competitive bids from banks, insurance companies and others. It helped put together a complex bond financing deal for a $1.6-billion highway and transportation construction program for the New Mexico authority. The company collected $1.5 million in fees, state officials confirmed.
The federal probe heated up considerably last month, around the time Obama announced Richardson as his choice for secretary of Commerce, according to sources familiar with the investigation. New subpoenas were issued and testimony was scheduled from officials at J.P. Morgan Chase & Co., who worked for the state with CDR, and the director of Richardson's political action committees.
CDR's selection drew FBI interest because the firm was not included on an initial list of the most qualified bidders. The bidding was later reopened for review, and a state committee headed by one of Richardson's former top aides helped select CDR.
