Opinion: Billygate: Why Obama dumped Gov. Richardson now

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

New Mexico Democratic Gov. Bill Richardson withdrew his name as Commerce Secretary-designate this afternoon for the new administration of President-elect Barack Obama.

With an almost audible sigh of relief barely two weeks before his inauguration Obama, in a printed statement that won’t provide archival video footage, said he accepted the resignation-before-actually-taking-office ‘with deep regret.’

And 16 days before becoming president, Obama sought to turn the PR smudge and federal probe of Richardson, his first Latino Cabinet pick, and his government into a patriotic plus: ‘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.’


It may also be a measure of the inadequacy of the new Obama administration’s vetting process that it somehow missed or ignored the ongoing and widely-reported grand jury testimony over alleged incidents in 2004 in New Mexico, part of a broad federal investigation of selling state services. It would seem to be an obvious something for the experienced Richardson to include when completing the 63-page questionaire given to potential Obama appointees.

While everyone was enjoying their holidays and watching Obama’s Hawaiian vacation, word continued to leak that Richardson and his gubernatorial aides are under investigation by a federal grand jury probing the possibility that they steered state bond business to a Beverly Hills firm in return for $100,000 in donations to two Richardson PACs back in 2004. (See original Ticket item from Dec. 26 below.)

(UPDATE: Press secretary-designate Robert Gibbs said tonight, ‘I think our vettors have done a good job.’)

Unspoken by both Obama and Richardson today was the political reality that the Democrat-controlled Senate, which would have to confirm Democrat Richardson for the new Democratic president, is already in a mortifying fight with Illinois’ Democrat Gov. Rod Blagojevich over a similar federal ‘pay-to-play’ probe of his operations, including the alleged auction of his nomination to fill Obama’s now-vacant U.S. Senate seat with another Democrat.

Richardson says he has ordered full state cooperation with the feds. Blagojevich has chosen to fight the federal allegations and Democratic demands that he resign or at least not nominate a Senate replacement. Last week he named former Illinois Democratic Atty. Gen. Roland Burris.

As The Ticket noted this morning, the governor created a real problem for Democratic Senate Majority Leader Harry Reid by placing him in the awkward position of barring Burris, an experienced African American Democratic officeholder, from taking the seat of a less-experienced black Democrat, Obama, and becoming the only African American in the Senate.

Both Richardson and Blagojevich deny any wrongdoing. In his statement today the New Mexico governor, who sought the Democratic presidential nomination himself, and whose perfectly-timed rejection of Sen. Hillary Clinton’s candidacy and endorsement of Obama boosted the Illinois senator’s campaign significantly.

Richardson said the investigation would show his innocence but was likely to drag on for weeks or months, affecting the confirmation process and his ability to work in Washington. Not to mention distract the public and media from the desired message of change to believe in. The Blagojevich fight, not so easy for the new administration or Reid to end, is also likely to drag on for weeks or months.

Now, with Penny Pritzker denied and Richardson out, Obama’s got to find another Commerce secretary. How about James Carville?

As Obama traveled to Washington today, a day after his family, for pre-inaugural talks about change with Democratic and Republican legislative leaders, the last thing he needs is another ongoing public display of corruption probing. As LittleGreenFootballs put it so succinctly: ‘Richardson throws himself under the bus.’

The abrupt end of a Cabinet nominee’s career is not unprecedented. As the new White House chief of staff, Rahm Emanuel, knows well, the early days of the Bill Clinton administration in 1993 were marred with nomination missteps that had to be withdrawn after presenting a brief image of incompetence.

Also, during the shortened run-up to the first inaugural of then Gov. George W. Bush in 2001, Linda Chavez withdrew from being secretary of Labor-designate after revelations that she’d helped an illegal immigrant as her nanny and written some controversial things. That too was described publicly as ‘voluntary,’ but behind the scenes it was made clear to her what was expected to avoid further public relations trouble in the early days of an administration.

For a news video report on the Richardson resignation and to see the original Ticket item from December, click on the ‘Read more’ line below.

-- Andrew Malcolm

You need not pay-to-play to receive cellphone alerts on each new Ticket item; just register here. RSS feeds are also available here. And Amazon has Ticket Kindle feeds as well.

This report on the federal investigation of the new Secretary of Commerce-designate originally appeared in The Ticket on Dec. 26, 2008:

It seems that Illinois’ legally challenged Gov. Rod Blagojevich is not the only close Barack Obama associate and Democratic governor being investigated by the feds for possibly selling government business in return for campaign contributions.

New Mexico’s Gov. Bill Richardson, who is the newly named Secretary of Commerce in Obama’s about-to-be Cabinet, is also being investigated by a federal grand jury in his home state for possibly steering state bond business from the New Mexico Financial Authority toward David Rubin, a significant campaign contributor, according to an NBC News report, among others.

Two former state officials say they’ve recently been questioned by a federal grand jury specifically about allegations that Richardson or aides pushed state business worth nearly $1.5 million in fees toward CDR Financial Products in 2004. The company is headquartered in Beverly Hills.

This was about the same time as CDR’s founder, Rubin, donated $100,000 to two of Richardson’s political action committees; mainly it appears to cover expenses of the governor and his staff at the Democratic Party’s National Convention in Boston that summer.

Rubin also donated another $29,000 to Richardson’s unsuccessful presidential campaign this year and last.

The probe is part of a broad national federal exploration of ‘pay-to-play,’ in which government officials reap financial or other benefits in return for state business.

Richardson has ignored reporters’ questions on the federal investigation, while a spokesman says he’s confident the relationship was entirely appropriate and the governor expects state employees to cooperate fully with federal investigators. A CDR spokesman also said the transactions were appropriate.

An Obama transition official has refused to comment on whether the president-elect knew of the investigation before he appointed Richardson to his new Cabinet position.

Obama has called Richardson ‘my great friend’ and said the governor would be a key member of his administration’s economic team. Richardson, the first Latino in Obama’s Cabinet, described himself the same way.

On Tuesday, the Obama transition team issued a five-page report of its own involvement with Blagojevich, who’s charged in a federal criminal complaint with demanding money for state aid, business and his appointment of Obama’s Senate replacement.

The Obama team report completely absolved the Obama team of any wrongdoing, as the Ticket reported here. But Obama was already on vacation when the report was issued and has said he won’t be talking further about the matter. The president-elect’s main Blagojevich contact, new White House chief of staff Rahm Emanuel also happened to be unreachable on a vacation in Africa.

Here’s the full video report below.

-- Andrew Malcolm

You need not be a governor to receive cellphone alerts on each new Ticket item; just register here. RSS feeds are also available here. And Amazon has Ticket Kindle feeds as well.