Obama moves closer to key cabinet pick

CHICAGO (Reuters) - President-elect Barack Obama moved closer to filling a key spot in his cabinet on Tuesday as his transition team plotted a careful course to shaping the next U.S. administration.

A Democratic source said a conditional offer for the post of attorney general had been made to former Clinton administration official Eric Holder, making him the automatic front-runner for the nation's top law enforcement position.

In keeping with his decision to maintain a low profile during the transition period before he takes office on January 20, Obama spent most of the day in private meetings at a federal office building near his home in Chicago.

But he delivered a video address to a global warming conference and pledged to "engage vigorously" in international climate change talks when he becomes president.

The Democratic president-elect, who will succeed Republican President George W. Bush, told the conference in California that he would stick to his promise of a sharp reduction in U.S. greenhouse gases by 2020 despite the ongoing financial crisis.

While Holder emerged as the top candidate for attorney general, Obama also continued to weigh the idea of naming his former rival, Hillary Clinton, as secretary of state.

The prospect that the New York senator and former first lady could become the top U.S. diplomat has sparked a media frenzy as the world eagerly awaits news of who will take important positions, including Treasury secretary, in the coming Obama administration.

Clinton is said to be interested in the job and her high profile could bolster Obama's aim of reaching out to allies and improving America's image in the world.

But before an official offer is made, Obama's transition team is reviewing the post-White House work of her husband, former President Bill Clinton, to see if there are any potential conflicts of interest.

The ex-president has played the role of roving ambassador, and his philanthropy has raised millions of dollars from around the world to combat AIDS, malaria and global warming.

He also has had some business dealings abroad, including giving speeches, which he might need to curtail if his wife becomes secretary of state.

Meanwhile, a senior Democrat told Reuters that before the offer to Holder is made official, Obama's team wants to determine if he could win Senate confirmation with broad bipartisan support.

Newsweek magazine, citing two legal sources close to Obama's transition team, was the first to report that the president-elect had settled on Holder.

If the appointment is confirmed, he would be the first African-American to head the Justice Department.

Holder served as deputy attorney general in the Clinton administration. In the top spot, he would be the nation's senior law enforcement officer and deal with issues from crime to terrorism.

A source said Democrats in the Senate were trying to gauge how much opposition there would be to Holder from Republicans over his role in Clinton's 2001 pardon of fugitive financier Marc Rich. Holder at the time said he was "neutral, leaning toward favorable" on the pardon.

The senior Democrat said at this point it does not appear to be "a fatal flaw concern."

(Additional reporting by Steve Holland, Thomas Ferraro and Jim Vicini; Editing by Bill Trott)