GovernmentExecutive.com

President Obama's pick for the No. 2 spot at EPA withdrew his nomination Wednesday on the eve of his Senate confirmation hearing amid a probe into a nonprofit foundation where he was previously on the board of directors.

Jon Cannon, a former senior EPA official and currently an environmental law professor at the University of Virginia, said in a statement that while he was not personally being investigated, the scrutiny surrounding the now-defunct America's Clean Water Foundation was a "distraction" to EPA.

Matt Dempsey, a spokesman for Senate Environment and Public Works ranking member James Inhofe, R-Okla., said committee staff questioned Cannon at a recent meeting regarding a February 2007 EPA inspector general report that said the foundation mismanaged at least $25 million in federal grants it was awarded between 1998 and 2003.

But he called Cannon's withdrawal "very surprising" and that he would have had Inhofe's backing if he had not withdrawn his nomination. "We told him we don't believe this would be anything that would hold you up," Dempsey said.

EPA Administrator Lisa Jackson in a statement said she is "disappointed" and that the administration "will move quickly to identify a new candidate."

The EPA IG report said the foundation had not complied with federal grant regulations. It also violated conflict-of-interest rules by giving a $50,000 contract to the Grizzle Company, a Washington, D.C., consulting firm run by Charles Grizzle, who was vice president of the foundation's board of directors at the time.

Cannon held a variety of positions at EPA under the late President Ronald Reagan, and former Presidents George H.W. Bush and Bill Clinton, eventually rising to become the agency's general counsel under Clinton.

He is the latest Obama nominee to withdraw amid controversy, including former Senate Majority Leader Tom Daschle's nomination to be HHS secretary and healthcare czar and New Mexico Gov. Bill Richardson's bid to be Commerce secretary.