Washington: Amid the euphoria around his upcoming inauguration, US president-elect Barack Obama faced a setback as his choice of commerce secretary, Bill Richardson, withdrew his nomination due to a federal grand jury investigation.
Withdrawal of New Mexico Governor Richardson's nomination came on Sunday amid reports that a federal grand jury has been looking into whether a California company won a state contract after contributing to Richardson's political causes.
Coming hours before Obama landed in Washington to take up temporary residence ahead of his January 20 inauguration at a hotel across the street from White House, the news added to his political woes over the controversial nomination of a successor to his senate seat.
Federal prosecutors had arrested Illinois Governor Rod Blagojevich, a fellow Democrat on December 9 alleging that he was planning to sell the seat to the highest bidder.
But a defiant Blagojevich, who has the sole authority to fill the vacancy, has brazenly named Roland Burris, a black former state attorney general, a move that members of the Senate Democratic majority have vowed to resist by using a senate procedure.
CNN cited two Democratic strategists outside Obama's transition team as saying that Obama aides pushed Richardson's withdrawal because they did not want an ethical distraction in the wake of the controversy.
Richardson said in a statement that he had decided to step aside because the investigation might go on for months and the challenges facing the nation and new administration were too great for him to be a distraction.
"I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process," Richardson added.
"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."
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Richardson denied any wrongdoing and said he intended to remain as governor.
"Let me say unequivocally that I and my administration have acted properly in all matters and that this investigation will bear out that fact," he said.
Obama said he accepted Richardson's decision "with deep regret".
"Governor Richardson is an outstanding public servant and would have brought to the job of Commerce Secretary and our economic team great insights accumulated through an extraordinary career in federal and state office," Obama said in a statement.
"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. Although we must move quickly to fill the void left by Governor Richardson's decision."
The investigation involves a California-based company, CDR Financial Products, and whether it received lucrative fees from the New Mexico Finance Authority in 2004 after making political contributions to Richardson.
Media reports said that CDR and its CEO, David Rubin, had contributed at least $110,000 to various Richardson committees. CDR was paid $1.48 million for work given to it by New Mexico.
Obama's choice of Richardson, one of the nation's most prominent Hispanic politicians, was seen as something of a consolation prize.
Richardson, 61, the third former presidential rival to join Obama's team after vice president-elect Joe Biden and Hillary Clinton, had been widely viewed as a possible secretary of state, an appointment that went instead to the former first lady.
Richardson withdrew from the race for the Democratic presidential nomination on January 10, 2008, after a poor showing in the New Hampshire primary, and later endorsed Obama. Obama and Hillary both lobbied Richardson for his endorsement.
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