Bill Richardson

Obama's man withdraws after scandal - World - smh.com.au

THE president-elect, Barack Obama, has moved to cut short any further ethical controversies surrounding his yet-to-be-sworn-in administration by accepting the withdrawal of his commerce secretary nominee, Bill Richardson.

Mr Richardson has become embroiled in a financial scandal in his home state of New Mexico.

The pair issued a statement yesterday announcing that Mr Richardson, a one-time presidential candidate and the first prominent Latino to be appointed to the cabinet, would return to his duties as governor of New Mexico after it became clear that a grand jury inquiry into the matter would take time.

Mr Richardson said the investigation, which is looking into a company that made donations to organisations associated with him and subsequently won a $US1 million ($1.4 million) contract, was likely to extend for weeks or even months.

"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.

"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."

Mr Obama accepted Mr Richardson's decision to withdraw as the next commerce secretary "with deep regret".

Mr Obama has already had to deal with ethical questions about the dealings of his chief of staff, Rahm Emanuel, with the Illinois Governor, Rod Blagojevich, who is facing corruption charges after an FBI probe.

Mr Blagojevich was caught on wiretaps making alleged "pay-to-play" deals with companies and individuals interested in Mr Obama's old Senate seat, which the governor had the sole right to fill.

Mr Obama and his staff have not been implicated in the scandal. Mr Emanuel issued a statement detailing his contacts with the governor, which appear to clear him of any wrongdoing.

But the incident has underscored how an issue of ethics can overwhelm the message the new president is seeking to present.

Mr Obama, who moved his family to Washington over the weekend, plans to meet with the congressional leadership and with his economic team today to discuss his plan for a major stimulus package worth up to $US1 trillion as he seeks to deal with the US financial crisis even before taking office.

In a bid to win Republican support, the package is likely to include about $US300 billion in tax cuts for individuals and business. Mr Obama had already been planning a $US65 billion tax cut for the middle class, but he is likely to dramatically increase it and extend tax cuts to business and high-income earners.

Even though the new Congress has significantly shifted in the Democrats' favour, the Republicans still have the numbers in the Senate to block a bill being brought on for a vote.

The Democrats are now likely to have 59 seats in the Senate - Minnesota looks set to declare Democrat, Al Franken, a former comedian, as its second senator after multiple recounts - but 60 votes are required to stop the Republicans blocking bills using filibusters.

Mr Obama is also facing a constitutional showdown over Mr Blagojevich's decision to nominate the 71-year old former Illinois attorney-general, Roland Burris, to the Senate.