HOUSTON — Federal prosecutors have decided not to pursue criminal charges against Gov. Bill Richardson and other New Mexico officials after a yearlong inquiry into accusations that his administration steered a lucrative contract to a high-profile political donor, according to an official letter sent to witnesses before the grand jury.

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The investigation prompted Mr. Richardson to withdraw from consideration for commerce secretary in the Obama cabinet in January. The governor, a former Democratic presidential candidate and energy secretary in the Clinton administration, had asserted all along that he and his staff had acted...