( CNN ) -- Maj. Gen. Robert Harding said Friday that , `` with deep regret , '' he has withdrawn his name from nomination to lead the Transportation Security Administration . `` This was a great honor , and I felt that I could bring some leadership , vision and intelligence expertise to that position , '' he said in a statement . `` Ultimately , my goal was to improve the security of our nation 's transportation systems . However , I feel that the distractions caused by my work as a defense contractor would not be good for this administration nor for the Department of Homeland Security . '' The TSA is part of the Department of Homeland Security . White House Spokesman Nicholas Shapiro noted that Harding has more than 35 years of military and intelligence experience , and added , `` The President is disappointed in this outcome but remains confident in the solid team of professionals at TSA . '' At a hearing on Wednesday , Harding acknowledged `` making mistakes '' when a company he formed overbilled the government in 2004 . At issue is a contract that Harding 's company , Harding Security Associates , signed with the Defense Department in early 2004 to provide 40 interrogators and debriefers rapidly in Iraq . Within four months of his firm starting work on the contract , Harding said , the government decided to end the contract . `` I then faced 40 individuals who were now without work , '' the nominee said , adding that some of them he had lured away from other jobs , including the CIA . Harding said he told his employees `` that I would take care of them , and that I would negotiate and work with the government to provide severance payments . '' The total severance payments came to about $ 800,000 , Harding said . `` When I went to claim it from the DIA [ Defense Intelligence Agency ] , '' government auditors `` recognized that I did not have a policy on that , that I had not negotiated with the government for severance , I had not provided the government my plan for severance ... and therefore it was not allowed , that $ 800,000 . '' Harding said that government auditors subsequently admitted `` there were mistakes on both sides . '' The White House said it was `` disappointed '' at Harding 's withdrawal . `` By nominating General Harding , the president tapped an individual with more than 35 years of military and intelligence experience who is dedicated to improving the security of our nation , '' Shapiro said . Sen. Susan Collins , R-Maine , said she felt misled by a White House explanation of the events . The White House compared $ 2.4 million in disputed charges that included the $ 800,000 in severance payments to the $ 53 million potential value of the contract , instead of the $ 6 million value of the work . `` Of the $ 6 million that HSA was paid , $ 2.4 million was [ in ] question . That 's a pretty high percentage . The White House , in talking to me about this issue , compared it to $ 53 million , but that 's not what was at stake here at all , and I thought the White House 's comparison was pretty misleading , '' Collins said . An independent investigation concluded that no fraud was involved . Ultimately , HSA reached a settlement with the government , with HSA paying back $ 1.8 million of the disputed $ 2.4 million . Harding said he learned from his mistake . He said the mistake caused him to add an accounting operation and otherwise professionalize the business , eventually increasing it in size from 60 people in 2004 to about 400 people when he sold the business last year . Following the hearing , Collins said that Harding `` adequately addressed my concerns regarding '' the contracts . `` Before making a final determination , however , I want to review additional information in order to ensure that all relevant data regarding the nominee have been thoroughly examined , '' she said . Harding was Obama 's second nominee to head the agency . Sen. James DeMint , R-South Carolina , put a hold on the first nominee , Erroll Southers , after Southers declined to say whether he supported unionization of screeners . Southers eventually withdrew his name from consideration after another controversy erupted involving a decades-old personnel matter .
John Harding removes himself from consideration to head it . He admitted ` ` making mistakes '' in prior dealings as a contractor . Harding was Obama 's second nominee to head the agency .