The inquiry centers around contributions made by David Rubin, the president of the company in question, CDR Financial Products Inc. CDR received two contracts worth $1.4 million for consulting work on a bond issue in New Mexico that was supported by Governor Richardson
. A grand jury is examining the charges. The move is a blow to the Obama transition team as it prepares for the inauguration of President-elect Obama in two weeks. Richardson’s decision was reportedly driven by concerns that the investigation would not be completed in time for his confirmation hearing and would prevent him from receiving final clearance.
The loss of Richardson, one of the most prominent Latino elected officials in the nation, is one of the first missteps in what has been a relatively smooth transition
process for Mr. Obama. The President-elect is expected to name a replacement quickly as one of his first priorities will be getting congressional approval for an economic recovery package. That proposal is being shaped now and over the weekend the Obama team indicated it will likely not be able to move the legislation as quickly as it had originally intended. The President-elect had indicated he wanted to sign an economic recovery package immediately following his swearing-in on January 20 but Republicans on Capitol Hill are balking at moving a bill so quickly without hearings. Republican Minority Leader Senator Mitch McConnell of Kentucky made it clear that the Republican Caucus intends on slowing the process down and the Obama transition team indicated it is prepared to negotiate with the minority.
The discussions around the economic stimulus package may take on a new sense of urgency if Friday’s Employment Situation Summary from the Bureau of Labor Statistics reveals large job losses for the month of December. If the numbers rival November, when half a million jobs were lost, Congress may be under considerable public pressure to act quickly to approve President-elect Obama’s plan. The slow holiday shopping season and poor sales receipts of retailers may be an ominous sign of another tough month for the economy. With companies continuing to shed jobs Mr. Obama has already indicated his support for an extension of unemployment benefits as the time spent without a job is increasing for many workers during this recession. The President-elect has also expressed support for the application for unemployment benefits by part-time workers. The incoming administration is apparently readying itself for an extended downturn that could last into the early part of 2010.
In addition to having his hands full on the economic front, President-elect Obama is facing a crisis in the Middle East that is growing grave with each passing day. With Israeli forces pushing deeper into Gaza and no sign of a cease fire between Israel and Hamas, Mr. Obama is on the sidelines as one of the most serious flare-ups in recent years boils over in the region. The President-elect has maintained his posture that he will not comment in deference to the Bush administration but with each new day in the conflict it is clear the Middle East may be the “test” Vice President-elect Joe Biden warned, and was criticized for suggesting, would confront Mr. Obama early in his administration.
The real challenge for the President-elect will be whether he will act according to his rhetoric on the campaign trail and speak to all parties in the Middle East, including Hamas; a group that has been deemed a terrorist organization. With mounting civilian casualties, including children, in Gaza and growing international condemnation of the Israeli’s push into the region, it is clear that the first priority of Secretary of State nominee Hillary Clinton and United Nations Permanent Representative nominee Dr. Susan Rice will be to seek a diplomatic resolution. President Nicolas Sarkozy of France is pushing for a cease-fire but it may have little impact as Israel has made clear its intention to dismantle Hamas. That brings forward the question of if that were Israels intention all along instead of the stated plan of halting rocket attacks.
In the end ,the Israeli's may have actually done the Obama administration a favor so to speak, in starting this action before he takes office. Although unlikely it is possible that a new cease fire agreement will have been reached before Inauguration Day. If so, the Obama team would be able to come in and potentially bring forth fresh and bold new ideas for this problem. By then it should be revealed to the world what Israeli intentions truly were for this aggression; to stop all Hamas rocket attacks from Gaza, or to remove Hamas from power in Gaza and replace them with Abbas' Fatah organization. The Obama team has been wise from commenting on the situation so far, leaning heavily on their standard "one presidency at a time' posture.
With the influence of the Israeli lobby in this country, Obama does not need another domestic issue caused from abroad. Richardson's withdrawal was relatively fast and perhaps the situation with the New Mexico Governor will ultimately prove to be nothing. Perhaps Richardson did not want to bring embarrassment to himself or Obama by facing certain questions. It is not inconceivable that Obama could have asked Richardson to withdraw his acceptance if he learned of the inquiry. In the past the President-elect's team has not had a problem with distancing himself from controversial figures, but if they did take this tact with Richardson, they could have problems down the line with some of Obama's other appointees..
Attorneys General nominee Eric Holder is sure to face some hard grilling during his confirmation hearing, and rightly so. Obama's choice for Treasury Secretary, Tim Geithner will face questions about his role in the deregulation of banks as will Economic Council appointee Lawrence Summers. Ron Kirk will face questions about his favoring some free-trade issues. None however may face tougher scrutiny than Secretary of State nominee Hillary Clinton.
Perhaps New York Governor David Paterson is being smart in not naming a replacement Senator just yet as the situation in the Empire State differs from that of the Prairie State in that Senator Clinton must be confirmed. Clinton appears to be a lock, but with the political tone in Washington shifting somewhat, nothing should be taken for granted. The reports of Senator Clinton being sour on Caroline Kennedy and the subtle story about Bill Clinton taking the seat instead could have Republicans squeamish enough to block her conformation in order to keep Bill out of the chamber.
The Honeymoon of Barack Obama seems to have officially ended with him moving to DC last night.