Obama's Pick for EPA Deputy Drops Out

By STEPHEN POWER
WASHINGTON -- President Obama's nominee for the No. 2 post at the Environmental Protection Agency dropped out, saying scrutiny of a group he was affiliated with was threatening to become "a distraction" for the administration.
The EPA announced the decision by Jonathan Cannon, nominated for the post of deputy EPA administrator, a day before he was scheduled to appear before a Senate panel considering his nomination.

In a written statement released by the EPA and attributed to Mr. Cannon, he said he was voluntarily withdrawing because "it has come to my attention that America's Clean Water Foundation, where I once served on the board of directors, has become the subject of scrutiny. While my service on the board of that now-dissolved organization is not the subject of the scrutiny, I believe the energy and environmental challenges facing our nation are too great to delay confirmation for this position, and I do not wish to present any distraction to the agency."
Mr. Cannon, a law professor at the University of Virginia who served as the EPA's general counsel during the Clinton administration, couldn't be reached for comment Wednesday. An EPA spokeswoman said the statement attributed to him "speaks for itself."
Earlier this week, aides to a Republican member of the Senate Committee on the Environment and Public Works, Oklahoma's James Inhofe, questioned Mr. Cannon about a 2007 EPA inspector general report that alleged that during the period when Mr. Cannon served on the board of America's Clean Water Foundation, the group mismanaged about $25 million in EPA grant money and broke federal conflict-of-interest rules by awarding a contract to a company led by a member of the foundation's board of directors. The report made no mention of Mr. Cannon and stated that the foundation board member who received the contract was not Mr. Cannon.
Mr. Inhofe's spokesman, Matt Dempsey, said that the senator's aides had told Mr. Cannon that the matter "did not warrant opposition" to his nomination but had questioned Mr. Cannon about it anyway "as part of the normal oversight process" and because the senator "has long made EPA grant oversight a priority."
"We were surprised" by Mr. Cannon's withdrawal announcement, Mr. Dempsey added.
Mr. Cannon's withdrawal makes him the latest in a series of nominees for jobs in the administration who have withdrawn. His departure comes as the agency is moving to regulate greenhouse-gas emissions, a step that major business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers strongly oppose.
In a written statement, the EPA's administrator, Lisa P. Jackson, said she was "disappointed" but that the administration will move quickly to identify a new candidate to fill the agency's no. 2 slot.
Write to Stephen Power at stephen.power@wsj.com