Editor's note: This is the sixth installment of a series examining the investment holdings and affiliations of the likely 2008 presidential candidates. Click here for our stories on Sen. Christopher Dodd, Sen. Hillary Rodham Clinton, Sen. John McCain, Sen. Barack Obama and Rudy Giuliani.

New Mexico Gov. Bill Richardson may have sold off his holdings in Big Oil, but scrutiny of his relationship with the industry in the years following his stint as its chief regulator will be an obstacle in his long-shot bid for the presidency.

Richardson said earlier this month that he sold his stake in oil refiner Valero Energy ( VLO - Get Report), where he took a board seat in 2001 after serving as energy secretary under President Clinton from 1998 to 2000. He left the director post in 2002, when he won the Democratic Party's nomination for governor of his state.

The stock sale came earlier than planned, according to a financial disclosure report filed recently with the Federal Election Commission. In the filing, Richardson said he intended to exercise his vested options and sell his interest only if elected president.

Richardson told the Associated Press that he decided to sell now because he was "getting questions" about his holdings and the issue had become "a distraction" to his campaign.

But selling the stock won't put the issue behind him, says Bill Hogan, a senior fellow with the Center for Public Integrity, a nonpartisan research organization that focuses on ethical issues.

"Anybody running for the White House should expect questions when they've profited in an industry they have regulated, and the public will judge them based on how candid they are in explaining their actions," he says.

To watch Nat Worden's video take of this column, click here .

In the latest installment of its investigation into the investments and business affiliations of the major presidential candidates for 2008, TheStreet.com revisits Richardson's dealings with the energy industry that led to his stake in Valero, valued between $350,000 and $750,000 in stock and options.

While he served on the Valero board, Richardson was also a director at Diamond Offshore Drilling ( DO - Get Report), a Houston-based oil and gas drilling contractor. Richardson disclosed an equity stake recently valued at less than $1,000. And, he sat on the board of Venoco a driller based in Denver that produces oil and gas in California. It went public last fall.

The Center for Responsive Politics estimates Richardson's net worth at $3.4 million to $9.8 million. The bulk of his wealth is tied up in Santa Fe real estate as well as in mutual funds, including the Legg Mason ( LMASX) Special Investment Trust (LMASX), the American Funds ( CWGIX) Capital World Growth & Income fund (CWGIX) and the Washington Mutual ( AWSHX) Investors fund (AWSHX). He also holds a small equity stake in City National ( CYN).

Richardson's annual salary as governor of New Mexico is $146,667. He also collects royalties from publisher Sterling Lord Linguistics of $15,000 to $50,000 a year for his book, Between Worlds: The Making of an American Life -- a recounting of his career in public service and an exploration of his roots as a Hispanic-American.

But Richardson's brief career in the oil industry has provided a nice tailwind for his portfolio. According to Diamond Offshore's 2002 proxy statement, Richardson was paid 2,000 stock options a year for being a director. In May of that year, he held 2,500 shares. At the time, its shares were priced at $19.92, which means his holdings were worth nearly $50,000. Since then, that stock has more than quadrupled.

Richardson disclosed that he recently recorded a capital gain of between $50,000 and $100,000 by selling shares of Diamond Offshore Drilling.

Venoco doesn't publicly disclose its compensation terms for Richardson, because it was a private company when he was a director. The company declined to comment for this story.

The lion's share of Richardson's oil profits came from Valero. According to its 2002 proxy statement, Valero paid its nonemployee directors like Richardson $25,000 a year in addition to granting them stock and options.

In 2002, Richardson owned 1,245 shares of Valero in February, and he had 1,667 shares under option. In May 2002, he received an additional 2,000 options, giving him the right to buy shares at $41.12.

Shares of Valero closed Friday at $73.43. The stock is up more than 700% from where it ended 2002.

Last year, Valero raised eyebrows when its CEO, Bill Klesse, boasted that tight supplies of gasoline and the resulting high prices for consumers were resulting in record profitability for the company. The windfall profits enjoyed in recent years by the energy industry amid soaring gas prices and geopolitical turmoil in the Middle East has raised hackles on Capitol Hill, particularly among Democrats, who view the Bush administration's close ties to the industry as a factor behind its largesse.

"With oil and gas prices at these levels, nobody wants to be a candidate with any connection to that industry right now," says Massie Ritsch, communications director with the Center for Responsive Politics. "It's a liability for anyone from either party."

In seeking the party's nomination, Richardson has said he will ask Americans to "sacrifice" to make the country more energy-efficient. If elected, he has pledged to reduce greenhouse gas emissions by 90% by 2050, cut oil demand by 50% by 2020 and reduce the country's foreign-oil intake from 65% to 10%.

His background as energy secretary gives him credibility on this issue, but his willingness to lend the prestige of that position to companies that he was regulating may bruise that credibility.

Richardson's presidential campaign didn't respond to repeated requests for comment on this story, but on a recent episode of NBC's Meet The Press, moderator Tim Russert asked him if he regretted taking corporate directorships in the industry.

"There's nothing wrong with being on energy boards," said Richardson. "I have to earn a living."

Richardson noted that he also served on the board of the National Resources Defense Council, a prominent advocate for environmental protection, and he said, "I'm not against oil companies per se. I strongly favor renewable energy, and I believe the oil companies should not get the tax breaks they're getting."

On Wall Street, Richardson gets accolades for being a tax-averse Democrat. In 2003, he signed into New Mexico law reductions in the top marginal tax rate and an expanded deduction on capital gains. Unlike other Democratic presidential candidates, he has stopped short of calling for a rollback of the Bush tax cuts.

Richardson also is calling for tighter emissions standards for the auto industry, a move that would weigh on the profitability of General Motors ( GM - Get Report) and Ford ( F - Get Report).

Will Richardson's ties to the oil industry hurt his credibility on these issues?

"What you have here is an example of the age-old problem of a politician profiting from public service," says the Center for Public Integrity's Hogan. "Richardson was burnishing his credentials as energy secretary to help raise these companies' visibility. It may be harmless enough, but the federal government has become a virtual revolving door between regulators and the industries they regulate, and this can conflict with their ability to act in the public interest."