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Richardson Pick Proves Hitch For Obama

When he ran for president, Bill Richardson touted more than an adventurous style and impressive resume. He was the guy who embraced flaws as a strength, the one who said the American people "don't want blow-dried candidates with perfection."

A federal grand jury investigation into what could be a serious flaw, however, has led New Mexico's governor to a tough decision to leave the national political stage - at least for now.

Richardson on Sunday withdrew as Barack Obama's nominee to be Commerce Secretary - an unexpected hitch in what has been a generally smooth transition for the president-elect so far.

A federal grand jury is looking into how a California firm that contributed to Richardson's political activities won a lucrative state government contract.

The former U.S. diplomat sounded diplomatic in announcing his decision. He said he has done nothing wrong, but figured a dragged-out confirmation could slow down Obama's work. And so Richardson withdrew, spoke with pride about sticking with his job as governor, and told Obama he's still eager to serve down the line.

"The governor is confident that he will be cleared," said Richardson's spokesman, Gilbert Gallegos.

"It is with deep regret that I accept Governor Bill Richardson's decision to withdraw his name for nomination as the next Secretary of Commerce," Obama said in a statement.

Putting aside the setback, Obama said: "It is a measure of his willingness to put the nation first."

CBS News White House correspondent Bill Plante reports that Kansas Gov. Kathleen Sebelius is said to be on the short list of possible replacements.

A federal grand jury is looking into how Beverly Hills financial services company, CDR Financial Products, earned a $1.5 million state contract after contributing to Governor Richardson's political action committees.

Richardson denied any wrongdoing, but said Sunday that the pending investigation threatened to stall the confirmation process for several weeks or months.

CDR spokesman Allan Ripp, in an exclusive telephone interview with CBS News, said, "The firm adamantly doesn't practice pay-for-play under any circumstance on any playing field. It is pay for performance, pay for expertise, pay for track record, and pay for merit."

As a result of Richardson's problems, questions are now surfacing over Obama's transition team's vetting process.

Richardson's withdrawal was the first bump in Obama's Cabinet process and the second "pay-to-play" investigation that has touched Obama's transition to the presidency. The president-elect
has not been implicated in either the New Mexico case or accusations that Illinois Gov. Rod Blagojevich tried to sell Obama's former Senate seat.

CBS News chief Washington correspondent Bob Schieffer says this latest turn demonstrates to Obama how events can always thwart the intentions of an incoming Chief Executive.

"No president can completely control his agenda," he told CBS Early Show. "There's something here that we don't know yet - the fact that Bill Richardson suddenly asked that his name be withdrawn, there's something coming down the road that he's going to have to deal with."

Obama meets with congressional leaders Monday about a massive economic recovery bill he wants passed quickly. Obama transition officials said Richardson's withdrawal would not affect the stimulus plan because the Commerce Department was not heavily involved.

Obama spokesman Robert Gibbs said he expected a new commerce secretary would be chosen soon but didn't have a timetable. Gibbs denied that those tasked to look into Richardson's background missed something.

"Everyone knew about this investigation," says's Mike Allen. "The President-elect took a chance. The question is why. Did (Obama's) vetters ask enough questions? Did (Richardson) give the right answers?"

A senior Obama adviser said Richardson gave assurances before he was nominated last month he would come out fine in the investigation. But as the grand jury pursued the case, it became clear that confirmation hearings would be delayed at least six weeks 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 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 could become an embarrassment to Obama, who ran on a clean government pledge.

Richardson, 61, is one of the most prominent Hispanics in the Democratic Party, having served in Congress, and in the Clinton administration as ambassador to the United Nations and Energy Secretary. As governor he has kept up an international profile with a specialty in dealing with rogue nations. He sought the Democratic presidential nomination this year, but eventually dropped out and endorsed Obama, who considered him for Secretary of State.