WASHINGTON (AP) -- New Mexico Gov. Bill Richardson said Sunday he would drop his effort to become commerce secretary in the Obama administration, as a federal investigation into a state contract awarded to his political donors became a growing threat to his nomination.
Richardson insisted he would be cleared in the investigation and President-elect Barack 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.
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.
Aides to both men insisted that Richardson made the decision to withdraw and was not pushed out by Obama. But one Democrat involved in discussions over the matter said transition officials became increasingly nervous during the last couple of weeks that the investigation was a bigger problem than Richardson had originally indicated.
Richardson spokesman Gilbert Gallegos said the governor believed the grand jury matter would be cleared up by this time, but decided to withdraw when it became clear it wouldn't. "It was the governor's idea, and his decision," Gallegos said.
Obama said he has accepted Richardson's withdrawal, first reported by NBC News, "with deep regret."