Gov. Bob McDonnell, facing Democratic opposition, yesterday withdrew the nomination of Richmond businessman Robert C. Sledd to be secretary of commerce and trade and appointed him as an unpaid senior economic adviser.
McDonnell downplayed the political significance of the move, describing it as a "win-win" situation that will give him two good men to promote jobs in Virginia.
McDonnell's initial choice to be deputy secretary of commerce and trade, Northern Virginia businessman James S. Cheng, will serve as secretary of commerce and trade. He was sworn in to that post yesterday with other Cabinet secretaries.
Sledd wanted to retain three corporate boardships while serving as the commerce secretary, but Democratic senators saw this as a potential conflict of interest. Sledd offered to give up his two Virginia board positions, at Owens & Minor Co. and Universal Corp., but that didn't satisfy the Democrats. He would have remained on the board of Pool Corp., a Louisiana company.
"We thought it was a potential conflict regardless of where the corporation was located," said state Sen. Janet D. Howell, D-Fairfax, chairwoman of the Senate Privileges and Elections Committee. "You cannot serve two masters."
The 22 Democrats who constitute a majority in the state Senate had said they would not vote for Sledd's confirmation.
Sledd, who attended yesterday's swearing-in ceremony in the Senate chamber, described the move as "positive" but said: "We need to put partisanship behind us and put Virginia first."
George Mason University political scientist Steve Farnsworth described the Sledd withdrawal as "a setback" for the new governor, beginning his second day in office.
"It was a rookie mistake," he said of McDonnell's proposed appointment. "The Senate Democrats are going to be as difficult for this governor as the House Republicans were for Governor [Timothy M.] Kaine."
He called the Senate opposition "an opening skirmish in the battle" to see who is in charge in state government.
Howell said the Democrats were not playing politics. "Serving on corporate boards is totally inappropriate," she said, adding that she expects Cheng to have an easy time of being confirmed.
Cheng has created several successful businesses and is an old friend of McDonnell from his Virginia Beach days. His statement of economic interest shows he has extensive stock holdings, including less than $50,000 in stock in Virginia-based Dominion Resources. A spokesman for McDonnell said his office is reviewing whether to place Cheng's holdings in a blind trust. Sledd had agreed to do that.
McDonnell, who will give his State of the Commonwealth message to the General Assembly tonight, continued to praise Sledd yesterday, describing him as "one of the most talented and visionary job creators in Virginia." He noted that an advisory opinion from the attorney general's office had cleared him to continue to serve on the boards.
Farnsworth said many states have a prohibition against this.
McDonnell called the appointment of Sledd to the new position "a good resolution" but said "I am disappointed that we ran into significant opposition from the members of the Senate."
He spoke with reporters after the swearing-in ceremony.
"This has never been about anything other than me wanting to hire the best man to create jobs," he added.
Sledd will serve without a salary, an offer he also made when he was in line to be secretary of commerce and trade. Sledd helped start Performance Food Group Co., a food-services company that grew to become a Fortune 500 company. He was its chairman when it was sold in May 2008 for $1.3 billion.
Contact Tyler Whitley at (804) 649-6780 or twhitley@timesdispatch.com.
Staff writer Olympia Meola contributed to this report.
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