January 4, 2009 Richardson withdraws, denies misdoing Play video

(NECN/ABC) - New Mexico Governor Bill Richardson was the first casualty of President-elect Barack Obama's planned cabinet.

On Sunday, Richardson withdrew his name as President-elect Obama's pick for Commerce Secretary, saying a federal probe into a so-called "pay- to-play scheme" could last weeks or months.

Investigators were looking into whether his administration improperly steered $1.5 million in state contracts to California-based CDR financial associates. The Beverly Hills firm was founded by David Rubin, contributed $100,000 to Richardson's campaign funds.

Richardson issued a statement saying, "I and my Administration have acted properly in all matters and that this investigation will bear out that fact."

But he said the investigation would cause "untenable" delays at a time when the nation is mired in a deep financial crisis.

ABC recently asked incoming White House press secretary Robert Gibbs about concerns over Richardson's nomination.

• Q: "So, you're confident he'll be the Commerce Secretary?"
• GIBBS: "In the case of Governor Richardson -- in the case of anybody else -- I think at the end of the day you'll have a very strong cabinet in place."

On Sunday, Obama said in a statement that he accepted the news with "deep regret." He added, "It is a measure of his willingness to put the nation first that he has removed himself as a candidate."

ABC's John Hendren reports from Washington.