By Bruce Drake, CQ Staff

New Mexico Gov. Bill Richardson has withdrawn as President-elect Barack Obama ’s choice to be Commerce Secretary amid reports that a federal grand jury has been looking into whether a California company won a state contract after contributing to Richardson’s political causes.

Richardson said in a statement that he had decided to step aside because the investigation might go on for months and the challenges facing the nation and new administration were too great for him to be a distraction.

“I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process,” Richardson 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.”

Richardson denied any wrongdoing and said he intended to remain as governor.

“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.

Obama said he accepted Richardson’s decision “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. “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. Although we must move quickly to fill the void left by Governor Richardson’s decision.”

The investigation involves a California-based company, CDR Financial Products, and whether it received lucrative fees from the New Mexico Finance Authority in 2004 after making political contributions to Richardson.

The Associated Press reported that CDR and its CEO, David Rubin, had contributed at least $110,000 to various Richardson committees. CDR was paid $1.48 million for work given to it by New Mexico.

Obama’s choice of Richardson, one of the nation’s most prominent Hispanic politicians, was seen as something of a consolation prize. Richardson, 61, was an early contender for the Democratic presidential nomination and had been widely viewed as a possible secretary of State, an appointment that went instead to Sen. Hillary Rodham Clinton , D-N.Y.

In his career, Richardson’s has served as U.S. ambassador to the United Nations and had five Nobel Peace Price nominations over the years for hostage-release and diplomatic negotiations with some of the world’s most troublesome regimes.