"It is with deep regret that I submit my withdrawal for nomination as the assistant secretary of DHS, Transportation Security Administration," Harding said in a statement Friday night. "I feel that the distractions caused by my work as a defense contractor would not be good for this administration, nor for the Department of Homeland Security."
Questions have swirled about a multimillion-dollar government contract that Harding's company was awarded in 2004 to provide private interrogators at Iraqi prisons for the Defense Intelligence Agency. Harding sold the firm, Harding Security Associates, in 2009.
The contract was originally worth more than $50 million but was terminated after only a year, Harding told the Senate Homeland Security Committee earlier this week. It was terminated at the convenience of the government after the Abu Ghraib prison scandal broke in Iraq, White House officials told lawmakers, according to committee documents.
The termination triggered an audit that found Harding's company had double-billed the government for more than $860,000, and it ultimately reimbursed the government more than $2 million, over a third of the money it received.
The contract also raised questions because some of the company's interrogators worked at Camp Cropper outside Baghdad, a prison where the Red Cross documented serious prisoner abuse in 2003. Harding told senators at his confirmation hearing this week that no Harding Security Associates interrogators were ever accused of wrongdoing.
Harding also had significant financial entanglements that required a complicated ethics agreement with the government — he would have had to recuse himself from any deals involving his former company and the companies he consulted for.
Harding also had a financial stake in Delta Airlines and in Dallas-Fort Worth International Airport. He told the committee he would divest holdings in each if confirmed.
Obama will now have to find a third nominee for the post, which has stood vacant since he took office and remained unfilled through the attempted terrorist attack on Christmas Day. Obama's first nominee, Erroll Southers, withdrew in part because of fierce Republican opposition to plans to unionize airport screeners.
"By nominating Gen. Harding, the president tapped an individual with more than 35 years of military and intelligence experience who is dedicated to improving the security of our nation. The president is disappointed in this outcome but remains confident in the solid team of professionals at TSA," White House spokesman Nick Shapiro said in a statement.
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