WASHINGTON — New Mexico Gov. Bill Richardson withdrew Sunday from consideration as incoming commerce secretary, citing an ongoing federal “pay-to-play” investigation involving one of his political donors as a significant obstacle to his confirmation.
Richardson, 61, who was a candidate for the Democratic presidential nomination last year, becomes the first political casualty in President-elect Barack Obama’s Cabinet, and his withdrawal marked the first visible crack in what had been one of the smoothest presidential transitions in modern history.
The former energy secretary and U.N. ambassador under President Bill Clinton was positioned to become the highest-profile Latino in Obama’s administration. But Richardson made it clear Sunday that he believed confirmation was far from a sure thing, even with Democrats firmly in control of the U.S. Senate.
“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,” Richardson said in a statement.
The New Mexico investigation, which began last summer, focuses on whether Richardson’s office urged a state agency to hire a California firm as a result of generous contributions from the company and its president to groups with ties to the governor.
Richardson insisted that he and his staff “have acted properly in all matters” and predicted that the investigation would exonerate him.
But he said that could take weeks or months, potentially holding up his Senate approval. Instead, Richardson said he will remain “in the job I love as governor of New Mexico.”
He called Obama on Friday to advise him of his plans, and the president-elect accepted the decision “with deep regret,” according to a statement issued Sunday. Aides said no one on Obama’s transition team pressured Richardson to drop out.
No clear replacement for Richardson at commerce emerged Sunday, but sources close to the transition team said Obama would move quickly to find one.
A grand jury in Albuquerque is looking into whether CDR Financial Products received a contract with the New Mexico Finance Authority because of pressure from Richardson or other state employees. CDR made $1.48 million advising the authority on interest- rate swaps and refinancing of funds related to $1.6 billion in transportation bonds, state officials confirmed.
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.
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 JPMorgan Chase, 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 did not make 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 agents are said to have communicated that the governor’s top aides — and even Richardson’s own actions — were under scrutiny.
At least two sources familiar with the investigation said some evidence raises concern about the propriety of the interactions of Richardson’s administration with a donor.
Obama aides declined to comment on any conversations the transition team may have had with the FBI about the investigation.
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 Sunday night.
Timeline of Richardson’s dealings
Early 2003: Richardson wins legislative approval of a $1.6 billion highway and transportation construction program called Governor Richardson’s Investment Partnership.
October 2003: CDR Financial Products chief executive David Rubin contributes $25,000 to a Richardson political committee called Moving America Forward.
2004: Bonds are issued for GRIP transportation program. CDR, based in Beverly Hills, Calif., becomes part of a team of investment and financial advisers selected by the New Mexico Finance Authority to put together the GRIP financing. CDR earns at least $951,000 in fees in 2004 for its services to the authority.
June 2004: CDR — under its former name, Chambers, Dunhill, Rubin and Co. — donates $75,000 to a political committee that Richardson established, Si Se Puede (Yes We Can) Boston 2004 Inc. The donation comes a couple of months after the transportation financing arrangement won state approval.
2005: Rubin gives $10,000 to Richardson’s re-election campaign.
Aug. 29, 2008: The New Mexico Finance Authority issues a statement saying it is “cooperating fully” with federal authorities in their investigation of CDR in connection with the 2004 issuance of bonds.
Dec. 3, 2008: President-elect Barack Obama announces his selection of Richardson as commerce secretary.
Dec. 16, 2008: A person familiar with the proceedings tells The Associated Press that a federal grand jury is investigating how CDR won its contract. Richardson ducks questions about the company at a news conference.
Sunday: Richardson withdraws from consideration for commerce secretary.
The Associated Press
