NY Post has this up on Caroline's withdrawl: Problems with taxes, nanny, and possibly marriage.
In a stunning revelation, a source close to Gov. David Paterson insisted this afternoon that the governor "had no intention" of picking Caroline Kennedy for New York's vacant senate seat - because she was "mired" in an issue over taxes, her nanny and possibly her marriage.
Kennedy was "mired in some potentially embarrassing personal issues," the source said, citing tax liabilities and worker compensation liabilities connected to the employment of a nanny.
The source also said the state of her marriage may have presented a problem as well.
"She has a tax problem that came up in the vetting and a potential nanny issue," the soruce said. "And reporters are starting to look at her marriage more closely," the soruce continued, refusing to provide any specifics.
Gossip columns have reported for more than a year that Kennedy's marriage to Ed Schlossberg is essentially over, and the gossip site Gawker.com has reported rumors that she's been linked to New York Times publisher Arthur Sulzberger.
Kennedy denied any issue over her marriage in an interview with The Post last month. Aides to Kennedy and a Times spokesperson couldn't immediately be reached.
But hours earlier, a source close to Kennedy told The Post she'd bowed out because she'd become aware of a personal issue early Wednesday afternoon, but that it had nothing to do with her uncle, Sen. Ted Kennedy, and his ailing health, contrary to some reports citing "a family source."
Kennedy withdrew from consideration to replace Sen. Hillary Rodham Clinton, just two months after rocking the New York political landscape by throwing her hat in the ring.
She confirmed the news publicly in a statement released shortly after midnight today - hours after The Post exclusively revealed her decision last night.
"I informed Gov. Paterson today that, for personal reasons, I am withdrawing my name from consideration for the United States Senate," the 51-year-old Camelot daughter said.
Kennedy's move reshuffled the deck of contenders for Paterson, who will choose Clinton's replacement. The seat officially became vacant after Clinton was confirmed nearly unanimously by the Senate as secretary of state yesterday.
State Attorney General Andrew Cuomo, who has polled higher than Kennedy in public-opinion surveys, was seen as rising on the list of possible replacements.
Kennedy had been the apparent front-runner, with a slew of high-profile backers - including Mayor Bloomberg and, by many accounts, President Obama - and had been pushed strongly by her uncle, Sen. Ted Kennedy, sources said.
About 90 minutes before she issued her statement, The Associated Press reported that she had renewed "determination" to get the seat, after experiencing "misgivings" about taking on a new job when her uncle, who's battling brain cancer, suffered a seizure shortly after Obama's inauguration Tuesday.
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