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Obama pick Richardson withdraws, citing N.M. probe

WASHINGTON - New Mexico Gov. Bill Richardson abandoned his nomination to become commerce secretary yesterday under pressure of a grand jury investigation into a state contract awarded to his political donors - a probe that threatened to embarrass President-elect Barack Obama.

Richardson insisted he would be cleared in the investigation and Obama stood by the governor as an "outstanding public servant." But both men said it became 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 for some time.

Richardson's withdrawal was the first disruption in Obama's cabinet process and the second "pay-to-play" investigation that has touched his transition to the presidency. The president-elect has remained above the fray in both the charges against Illinois Gov. Rod Blagojevich and the New Mexico case.

Richardson's problem is that a federal grand jury is investigating how a California company that contributed to his political activities won a New Mexico transportation contract worth nearly $1.5 million.

Richardson said in a statement issued by the Obama transition office yesterday that the investigation could take weeks or months but expressed confidence it will show he and his administration acted properly.

Obama spokesman Robert Gibbs said he expected a new commerce secretary to be nominated soon. Gibbs said this was not a case of the Obama team missing something during its background checks.

"I think the totality of our cabinet picks is impressive and I think our vetters have done a good job," he told reporters traveling with Obama as he moved to Washington last night.

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 be delayed for six weeks or 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 in the last couple of weeks that the investigation was a bigger problem than Richardson had originally indicated.

Obama said he has accepted Richardson's withdrawal, first reported by NBC News, "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.

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