Daschle withdraws as nominee for HHS secretary

Tom Daschle withdrew Tuesday as President Barack Obama's nominee to be health and human services secretary, dealing potential blows to both speedy health care reform and Obama's hopes for a smooth start in the White House.

"Now we must move forward," Obama said in a written statement accepting "with sadness and regret" Daschle's request to be removed from consideration. A day earlier, Obama had said he "absolutely" stood by Daschle in the face of problems over back taxes and potential conflicts of interest.

The stunning Daschle development came less than three hours after another Obama nominee also withdrew from consideration, and also over tax problems. Nancy Killefer, nominated by Obama to be the government's first chief performance officer, said she didn't want her bungling of payroll taxes on her household help to be a distraction.

"They both recognized that you can't set an example of responsibility but accept a different standard of who serves," said White House press secretary Robert Gibbs.

Daschle, the former Senate Democratic leader, a strong and early backer of Obama's presidential bid and a close Obama friend, said he would have been unable to operate "with the full faith of Congress and the American people."

"I am not that leader, and will not be a distraction" to Obama's agenda, he said.

Obama had given Daschle two jobs — to be White House health czar on top of the post leading the Health and Human Services Department — and Daschle is relinquishing both. The developments called into question whether Obama will be able to move as quickly as he has promised on sweeping health care reform — one of the pillars of his first 100 days agenda and expected to be among the hardest to accomplish.

"It really sets us back a step," said Sen. Dick Durbin, D-Ill. "Because he was such a talent. I mean he understood Congress, serving in the House and Senate; he certainly had the confidence of the president."

Said White House spokesman Gibbs: "We're looking for a new nominee, but the problem has existed for quite some time and the work toward a solution to make health care more affordable won't stop or won't pause while we look for that nominee."

Among those considered for the post before it went to Daschle was Howard Dean, the physician-turned-politician who ran for president in 2004 and recently left as head of the Democratic National Committee.

Asked repeatedly whether the White House sought Daschle's withdrawal, Gibbs said it was Daschle's decision alone. He "did not get a signal" from the White House to step aside, the spokesman said.

Daschle is the third high-profile Obama nominee to bow out. Obama tapped Bill Richardson to be Commerce secretary, but the New Mexico governor withdrew amid a grand jury investigation into a state contract awarded to his political donors. Obama named Republican Sen. Judd Gregg of New Hampshire to the position Tuesday.

Last week, the Senate confirmed Timothy Geithner as treasury secretary, but only after days of controversy over the fact that he had only belatedly paid $34,000 in income taxes.

Asked whether tax questions are going to arise with any other nominees, Gibbs said only that "the president has confidence in the people he has chosen to serve in government." He also defended the administration's vetting process.

He added: "the president takes responsibility" for the spate of nomination troubles.

The White House dispatched senior adviser David Axelrod to Capitol Hill to soothe Democrats whose nerves were frayed by the loss of Daschle.

Obama, Vice President Joe Biden and Daschle's former Democratic colleagues had rallied to Daschle's defense in the wake of questions about his failure to fully pay his taxes from 2005 through 2007. Last month, he paid $128,203 in back taxes and $11,964 in interest.

"Tom made a mistake, which he has openly acknowledged," Obama said Tuesday. "He has not excused it, nor do I. But that mistake and this decision cannot diminish the many contributions Tom has made to this country."

"I was a little stunned. I thought he was going to get confirmed," said Max Baucus, D-Mont., chairman of the Senate Finance Committee, the panel that would have voted on Daschle's nomination. "It's regrettable. He's a very good man."

Daschle also was facing questions about potential conflicts of interests related to speaking fees he accepted from health care interests. He also provided advice to health insurers and hospitals through his post-Senate work at a law firm.

The controversy has undercut Obama's promise to run a more ethical, responsible and special interest-free administration. Republicans and major newspapers had been questioning Obama's decision to stick with Daschle.

Rod Blagojevich's impeachment trial proceeds without him

Gov. Rod Blagojevich's historic impeachment trial began Monday without its defiant defendant, who refused to participate and spent the day in New York making television appearances to decry the trial as unfair.

Illinois Supreme Court Chief Justice Thomas Fitzgerald asked whether Blagojevich was present and a long silence followed. The chief justice, who is presiding over the trial, ordered the proceedings to begin as if Blagojevich had entered a plea of not guilty.



"This is a solemn and serious business we're about to engage in," Fitzgerald told the Senate chambers.

Blagojevich, meanwhile, was hundreds of miles away and hit the morning show circuit, appearing on ABC's "Good Morning America" and "The View" before a scheduled appearance on "Larry King Live."

"I'm here in New York because I can't get a fair hearing in Illinois, the state Senate in Illinois," Blagojevich said in between appearances. "They've decided, with rules that are fixed, that don't allow me as a governor the right to be able to bring in witnesses to prove that I've done nothing wrong."

The trial will determine whether Blagojevich is removed as governor and barred from ever again holding office in Illinois. No Illinois governor has ever been impeached or ousted.

"We will make a decision, and it will be thoughtful, deliberative and fair," Senate Minority Leader Christine Radogno, a Republican, said as the trial opened. "The voters of Illinois have asked for nothing more and they deserve nothing less."

Blagojevich was arrested Dec. 9, accused of scheming to benefit from his power to name President Barack Obama's replacement in the Senate. He was impeached by the House earlier this month on additional charges of circumventing hiring laws and defying decisions by the General Assembly. A two-thirds majority of the Senate could convict him at trial and throw him out of office.

While refusing to attend the trial, Blagojevich made clear he would only defend himself through a media blitz.

"I'm talking to Americans to let them know what's happening in the land of Lincoln," he said on ABC. "If they can do it to a governor, they can do it to you."

In addition to the appearance on ABC, NBC's "Today" show also aired an interview with the governor Monday.

David Ellis, the House-appointed prosecutor presenting evidence against Blagojevich at the trial, opened by asking senators to let him introduce witnesses and documents meant to bolster the criminal complaint filed by the U.S. attorney's office.

Ellis proposed hearing from Daniel Cain, the FBI agent whose affidavit describes conversations in which Blagojevich allegedly sought to sell Obama's vacant seat in the Senate and tried to pressure groups into donating to his campaign fund. He also asked to introduce evidence on the legal safeguards that ensure federal wiretaps are fair and accurate.

Senators were likely to vote on Ellis' request later Monday.

Blagojevich reiterated his innocence Monday, telling ABC that "I did nothing wrong. And if I did something wrong, I would have resigned."

State senators have denied Blagojevich's claims of bias.

The U.S. attorney has asked senators to bar testimony from anyone federal prosecutors say would jeopardize the criminal corruption trial against the governor, Republican state Sen. Matt Murphy told ABC on Monday. Murphy noted Blagojevich and the impeachment trial prosecutor have the same limitations.

"The suggestion that this is somehow unfair to the governor is the most self-serving, ludicrous statement I have ever heard in my life," Murphy said. "It couldn't be fairer for this guy."

Still, Blagojevich claims he can't call witnesses who would say they talked to him about Obama's Senate seat and Blagojevich said nothing improper.

But the governor would be able introduce public statements from such people — for example, White House chief of staff Rahm Emanuel saying on a news show that Blagojevich did nothing wrong when the two of them talked.

The rules also let Blagojevich seek testimony from any witnesses not related to the criminal case. But Blagojevich ignored all deadlines for proposing witnesses or introducing evidence. He also ignored the opportunity to comment on proposed Senate rules or challenge them after they were adopted.

Also Monday, Blagojevich revealed he had considered naming Oprah Winfrey to the Senate.

Winfrey, meanwhile, said she would have turned him down.

"I'm pretty amused by the whole thing," Winfrey told "The Gayle King Show" on Sirius XM Radio. "I think I could be senator too. I'm just not interested."

In recent days, Blagojevich has compared himself to the hero of a Frank Capra movie and a cowboy being lynched for a crime he didn't commit. He said that when he was arrested on federal corruption charges, he took solace from thinking of other jailed leaders — Nelson Mandela, the Rev. Martin Luther King Jr. and Gandhi.

Blagojevich also has hired a public relations firm, but spokesman Lucio Guerrero said Monday that the state won't be footing the bill.

Lt. Gov. Patrick Quinn would replace him, becoming Illinois' 41st governor.

U.S. celebrates as President Obama vows new era

Barack Obama launched his presidency before an estimated 1.5 million people on the National Mall on Tuesday with somber yet confident tones, saying the country will overcome its serious economic and international challenges.

President Barack Obama 2009 Inauguration Video


"Today I say to you that the challenges we face are real," Obama said in his inaugural address. "They are serious, and they are many. They will not be met easily or in a short span of time. But know this, America: They will be met."

Obama's tempered optimism, however, was bookended by celebration in the Mall and across the country for the inauguration of the country's first African-American president.

"This is America happening," said Evadey Minott, a Brooklyn, New York, resident who witnessed the inauguration.

"It was prophesized by King that we would have a day when everyone would come together. This is that day. I am excited. I am joyful. It brings tears to my eyes."

Obama's address came before a crowd that had been building since 4 a.m. Tuesday down the National Mall. People sang, danced and waved flags as his swearing-in approached.

Many in the crowd seemed moved as Aretha Franklin belted out a rousing version of "My Country 'Tis of Thee" before Joe Biden was sworn in as vice president.

Wearing a navy suit and red tie, Obama repeated the oath of office, his hand on the same Bible used in President Abraham Lincoln's first inauguration.

When Obama took the podium, however, the jubilant crowd grew somber and quiet, hanging on his every word. There was only scattered applause -- punctuated by an occasional "That's right" or "Amen."

Obama thanked those who sacrificed so much so "a man whose father, less than 60 years ago, might not have been served at a local restaurant can now stand before you to take a most sacred oath."

He promised to end petty squabbles on Capitol Hill, bring "old friends and former enemies" into the fold, and invoked the Bible, saying, "The time has come to set aside childish things."

He also vowed to leave Iraq to its people, responsibly, and to finish forging "a hard-earned peace" in Afghanistan. To Muslims, he promised "a new way forward, based on mutual interest," and to terrorists, he leveled a threat: "You cannot outlast us, and we will defeat you."

The challenges are daunting, he said, but anyone who underestimates this nation has forgotten about its past perseverance.

His words resounded with spectators and revelers who let out deafening cheers after his address. Spectator L.J. Caldwell likened Obama to some of the most heroic figures of the civil rights movement.

"When you think back, Malcolm [X] fought, then we come a little further. Rosa Parks sat, then come up a little further, and [the Rev. Martin Luther King Jr.] spoke. Then today, President Obama ran and we won," said Caldwell, of Somerset, New Jersey.

Celebrations weren't limited to Washington. Across the country, friends and strangers gathered on the streets and in schools, bars and auditoriums to witness Obama's inauguration, united in their hope that he will deliver on his promise of change.

In New York's Bronx borough, students huddled in the halls of a school to watch the ceremony on a projection screen.

"They were cheering; they were clapping; they were in awe because everything we had talked about, they were able to see," teacher Marta Rendon said.

Leaders around the world offered their congratulations. French President Nicolas Sarkozy said the United States expressed "its resolve to have an open, new, strong and caring America."

Australian Prime Minister Kevin Rudd said Obama is "the hope of our time."

After Obama's address, hundreds of thousands remained on Washington's National Mall as Obama entered the Capitol and signed his first documents as the 44th president of the United States. Among those were his Cabinet nominations. The Senate approved most of those nominations later in the day.

Obama then lunched with lawmakers at the Capitol's Statuary Hall, telling them, "What's happening today is not about me. It is about the American people."

Later, Obama's motorcade carried him past barricaded crowds along Pennsylvania Avenue toward the White House. He and his family watched the rest of the parade in a reviewing stand outside the White House. The president and first lady then began the rounds of 10 official inaugural balls scheduled over the course of the evening.

Many said before the festivities that they did not have tickets and would be happy to catch a mere glimpse of the nation's first African-American president. Some spectators were more than a mile from the swearing-in ceremony, watching on giant TV screens erected along the National Mall.

At St. John's Episcopal Church, where the Obamas kicked off a packed day, 9-year-old Laura Bruggerman waited with her mother, Wendy, and father, Jeff, of Bethesda, Maryland. The affable crowd tried to let shorter onlookers and children to the front for better views.

"I want to see Obama. I think that would be really cool. I could tell all of my friends that I got to see him," the youngster said.

Security was tight in Washington. However, no arrests related to the inauguration were reported as of Tuesday evening, an FBI spokesman said.

The ceremony also drew celebrities like Dustin Hoffman, Denzel Washington and Steven Spielberg.

"It's behind the dream. We're just here feeling it with the throngs of people. It's amazing grace personified," Oprah Winfrey said, sitting next to actor Samuel L. Jackson.

Obama and congressional leaders formally bade farewell to Bush, and the now-former president took a presidential jet to Midland, Texas, shortly afterward.

As Obama and his wife, Michelle, made their way to the White House, they stepped out of their limousine amid another round of boisterous hoorahs.

The first couple beamed as they walked down Pennsylvania Avenue, waving to the throngs kept back by police barriers. They walked a few blocks before returning to their vehicle to finish the two-mile parade that took them to the White House.

"I have a sneaky suspicion that Barack and Michelle will be out and about on the streets of Washington [during his term]. ... You'll see them again," said Tracy Miller, who was watching the Obamas.

After arriving at the White House, Obama and his family watched the rest of the inauguration parade from a reviewing stand.

Portland mayor admits past relationship with teen

More than a year after denying it, the newly elected mayor of Portland has admitted having a sexual relationship with a male teenager in 2005.

Sam Adams, who is openly gay, acknowledged the relationship in a statement Monday, after the Willamette Week newspaper broke the story on its Web site.



In Washington, D.C., for the inauguration, Adams will cut his trip short to issue a public apology Tuesday afternoon in Portland, said Wade Nkrumah, his spokesman.

Adams, 45, said he and the teen were together in the summer of 2005, shortly after the teenager turned 18 in June, and when Adams was a city commissioner. The revelations come nearly a year and a half after Adams and the teen said rumors of a sexual relationship between them were false.

"I lied at the time because I was afraid that people would believe untrue rumors being circulated by an undeclared mayoral opponent that I had broken a law involving sexual relations with a minor. But this is not a good excuse," Adams said in his statement.

Despite the rumors, Adams coasted to victory in his race, making Portland the largest U.S. city to ever elect an openly gay mayor. He was sworn in Jan. 1.

In his statement Monday, Adams apologized to the teen for making him lie about the relationship. He also apologized to colleagues and voters.

The young man, now 21, did not immediately return a request for comment.

Richardson withdraws bid to be commerce secretary

New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract.

Richardson's withdrawal was the first disruption of Obama's Cabinet process and the second "pay-to-play" investigation that has touched Obama's transition to the presidency. The president-elect has remained above the fray in both the case of arrested Illinois Gov. Rod Blagojevich and with the New Mexico case.

A federal grand jury is investigating how a California company that contributed to Richardson's political activities won a New Mexico state contract worth more than $1 billion. Richardson said in a statement issued by the Obama transition office that the investigation could take weeks or months but expressed confidence it will show he and his administration acted properly.

"But 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 said he will remain as governor and told Obama, "I am eager to serve in the future in any way he deems useful."

The announcement came ahead of Obama's Monday meetings with congressional leaders on a massive economic recovery bill he wants lawmakers to pass quickly.

Obama said he has accepted Richardson's withdrawal, first reported by NBC News, "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. "It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the Cabinet 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, I look forward to his future service to our country and in my administration."

A person familiar with the proceedings has told The Associated Press that the grand jury is looking into possible "pay-to-play" dealings between CDR Financial Products and someone in a position to push the contract through with the state of New Mexico.

State documents show CDR was paid a total of $1.48 million in 2004 and 2005 for its work on a transportation program.

Richardson ran against Obama in the Democratic presidential primary, but withdrew after a poor showing in the Iowa caucuses and New Hampshire primary.

He is one of the most prominent Hispanics in the Democratic Party, having served in Congress and as President Clinton's ambassador to the United Nations and energy secretary. As governor, he has kept up an international profile with a specialty in dealing with rouge nations. Obama also considered him to be secretary of state.

CDR and its CEO, David Rubin, have contributed at least $110,000 to three political committees formed by Richardson, according to an AP review of campaign finance records.

The largest donation, $75,000, was made by CDR in June 2004 — a couple of months after the transportation financing arrangement won state approval — to a political committee that Richardson established before the Democratic National Convention that year.