Jon Cannon, President Obama's nominee to become deputy chief of the Environmental Protection Agency, withdrew from consideration today with a veiled reference to "scrutiny" of his association with America's Clean Water Foundation (ACWF) -- a group that the EPA inspector general cited in 2007 for steering federal grant money to the livestock industry.

ACWF has not made the news or attracted congressional criticism for any recent misdeeds. In fact, its attorneys told the EPA in 2006 that the entire group had abruptly dissolved, disappearing into thin air as the inspector general advised the government to claw back more than $21 million in federal grant money that had gone from ACWF into the hands of the National Pork Producer Council.

What did Cannon have to do with that shady move on ACWF's part? Nothing, according to his statement, released today through EPA:

Today I am voluntarily removing my name from consideration to be Deputy Administrator of the Environmental Protection Agency. 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.

Cannon's choice of the present tense is telling: ACWF "has become the subject of scrutiny," he states, which would suggest that new attention is being paid to the group's past misdeeds. The EPA inspector general's audit in 2007 found that the Foundation had awarded a contract to a member of its board of directors, in violation of federal conflict of interest policy.

That board member, according to the audit, was not Cannon but Charles Grizzle, proprietor of The Grizzle Company and an EPA official during the Reagan administration.

We'll update you with any more information that emerges on Cannon's withdrawal.

Late Update: The plot thickens. Jim Inhofe (OK), the conservative ranking Republican on the Senate environment committee, says his aides questioned Cannon on his ties to ACWF ... but the senator says he wouldn't have held up Cannon's nomination over the issue. Here's Inhofe's full statement:

We were surprised to learn today about Jon Cannon's decision to remove his name from consideration to be Deputy Administrator of the Environmental Protection Agency.

At a recent staff meeting, as part of the normal oversight process for nominees, Inhofe committee staff questioned Mr. Cannon regarding an EPA Inspector General report on America's Clean Water Foundation, on which Mr. Cannon served as a board member. According to the report, the organization mismanaged $25 million in taxpayer-funded grants. Through his leadership position on the EPW Committee, Senator Inhofe has long made EPA grant oversight a priority.

I want to make clear, however, that at the meeting Inhofe staff expressed to Mr. Cannon that, though the organization committed serious missteps in managing federal grants, it did not warrant opposition to his nomination.

Cannon had been slated for a confirmation hearing before the Senate environment panel tomorrow.