02/05/2009 05:12 am ET Updated May 25, 2011

The Blagojevich Blight: Controversy Threatens To Taint Surrounding Democrats

The Rod Blagojevich pay-to-play scandal has only not eliminated any chance that Bill Richardson can ride out his own home-state scandal to win Senate approval as Commerce Secretary, but also made the selection of a replacement more difficult, because Republicans will seek to capitalize on even minor vulnerabilities of the next nominee, according to sources close to the Obama team.

Transition officials have been aware from the start of the problems Richardson faces stemming from a federal investigation into a California financial services company, CDR Financial Products LLC. The investigation was first publicly reported over four months ago. Only recently, however, has the Obama team decided that Richardson's problems are fatal, as the Blagojevich affair has created incendiary conditions.

The controversies involving Blagojevich and Richardson demonstrate the continuing potential of "the politics of scandal" to undermine the ability of those in power to make policy and to govern on the basis of victory at the polls. Obama strategists appear determined to nip the current problems in the bud, concerned about avoiding the circumstances Benjamin Ginsberg and Martin Shefter describe in their book, Politics by Other Means: Politicians, Prosecutors, and the Press from Watergate to Whitewater:

[E]lections have become less decisive as mechanisms for resolving conflicts and constituting governments in the United States......Rather than engage in an all-out competition for votes, contending political forces have come to rely upon such weapons of institutional combat as congressional investigations, media revelations, and judicial proceedings to defeat their foes. In contemporary America, electoral success often fails to confer the capacity to govern, and political forces have been able to exercise considerable power even if they lose at the polls.

Now, with Richardson driven out by rumors of scandal and fear of 'Blagojevich contagion,' Obama aides are casting a wide net looking for a squeaky-clean replacement. In this light, some attention has focused Laura D'Andrea Tyson, former chair of the Council of Economic Advisers under President Clinton, the S. K. and Angela Chan Professor of Global Management at Berkeley's Haas School of Business, and, before that, the first woman to serve as dean of the London Business School.

Sources note that in the aftermath of the Richardson controversy, Tyson, who has been more involved in academia and government than in business, is likely to be a "safe" choice. On the other hand, she has been on the board of Morgan Stanley since 1997, and thus could be tainted by her connection -- no matter how distant -- to the current Wall Street imbroglio. Traditionally, Commerce has gone to a prominent corporate executive or lawyer, such as the incumbent, Carlos Gutierrez, and predecessors like Donald Evans, Mickey Kantor, Ron Brown, Robert Mosbacher.

William Daley, Commerce Secretary under Clinton, is another possible nominee, but it is not at all clear whether his deep roots in Chicago politics will be held against him in the current environment.

In the case of Richardson, there are conflicting accounts as to how forthright he was with Obama aides while he was being vetted. Politico reported that Richardson failed to provide crucial information, quoting a Democratic source saying that Richardson and his supporters "were pressed for information and they gave nothing." Another source told the Huffington Post, however, that Richardson had been straightforward and open early on, but that the Blagojevich scandal raised the stakes, making allegations that Richardson had participated in a pay-to-play arrangement of his own all the more problematic.

On August 29, 2008, well before Obama had won the election, much less made the Richardson appointment, the Albuquerque Journal (subscription required) reported that the FBI was investigating whether there was a link between campaign contributions by CDR Financial Products to political committees set up by Richardson in New Mexico and the award of nearly $1.5 million in New Mexico state contracts to the firm.

One of the political committees created by Richardson, Si Se Puede!, paid bills incurred by Richardson and his staff at the 2004 Democratic National Convention in Boston. Another Richardson committee to which CDR contributed, Moving America Forward, was set up to register New Mexico voters in 2004.

Attempts on the part of conservatives to fan the flames of scandal are in the early stages. At National Review Online, David Kahane writes:

Can you believe it? Barack Hussein Obama II hasn't even been inaugurated yet and he's already been interviewed by federal prosecutors in the ongoing Blago mess; he's seen Bill Richardson immolate himself rather than stand the federal grand-jury scrutiny that would have come with his appointment as Commerce Secretary; his boy Rahm Emanuel is both en pointe, having resigned the House seat that was previously warmed by Hot Rod and Dan Rostenkowski, and, apparently, on Patrick Fitzgerald's tapes too; and he's facing the prospect of the Senate Majority Leader, Harry Reid, standing like a homunculus George Wallace in the schoolhouse door, ready to deny entrance to a black man when Roland "We Are the Senator" Burris tries to take Bambi's hardly-even-used seat tomorrow.

In their uphill struggle to taint the Obama administration before it takes office, conservatives have been dealt another ace in the hole, Roland Burris, the 71-year-old African American former Illinois Attorney General whom Blagojevich has appointed to fill Obama's Senate seat. Despite the opposition of Senate Majority Leader Harry Reid and the entire Democratic caucus, Burris is preparing what may be a long, drawn-out fight for the seat, a battle that will keep the Blagojevich controversy alive and on the front pages-- a political hot potato threatening to singe, if not burn, surrounding Democrats.