Nov. 20 (Bloomberg) -- Arizona Governor Janet Napolitano is under consideration to serve in President-elect Barack Obama's Cabinet, including as head of the Department of Homeland Security, people familiar with the transition said.

Napolitano, 50, who previously served as Arizona's attorney general and as a federal prosecutor, was among the first Democratic governors to back Obama's presidential bid. She was elected to a second, four-year term in 2006 and is known for her work on immigration and other law-enforcement matters.

Arizona Republican Senator John McCain, who Obama defeated in the presidential election, lauded Napolitano's experience and said it ``warrants her rapid confirmation by the Senate.''

Obama's Cabinet is starting to take form far earlier than previous new administrations. While giving an early look at what the executive branch will look like after Obama's Jan. 20 inauguration, it also has meant that his transition team is spending time tamping down reports about possible nominees that they consider premature or inaccurate.

Transition aides earlier today denied a CNN report that Penny Pritzker, the finance chairman of Obama's presidential campaign, has been selected for Commerce secretary.

``Penny Pritzker is a trusted adviser and valued friend,'' said Stephanie Cutter, a spokeswoman for the transition. ``But this report is simply not the case.''

Not a Candidate

Pritzker released a statement indicating that she isn't interested in joining the administration. ``I think I can best serve our nation in my current capacity: building businesses, creating jobs and working to strengthen our economy,'' she said.

Pritzker was widely praised for her work in Obama's record- breaking campaign fundraising. She is among three family members who oversee the Pritzker's financial holdings, and sits on the board of Global Hyatt Corp.

Obama's choices for Cabinet posts so far include former South Dakota senator Tom Daschle, 60, who has accepted the president-elect's offer of nomination as secretary of Health and Human Services, according to Democrats and officials familiar with the transition process. Former Deputy U.S. Attorney General Eric Holder, 57, is the leading contender to head the Justice Department.

Some of the most intense scrutiny has come on the president- elect's selection of a secretary of state. Obama met last week with former rival Hillary Clinton, a senator from New York, to discuss the post. The process has been complicated by concerns that the business interests of her husband, former President Bill Clinton, with foreign governments and companies could create conflicts for his wife if she were the top U.S. diplomat.

200,000 Donors

In a sign that both sides are trying to clear obstacles, Bill Clinton has sent Obama's transition team a list of more than 200,000 donors to his presidential library and foundation, according to a Democrat familiar with the process.

The former president said yesterday he would ``do whatever they want'' to ease the vetting process.

Obama hasn't offered the job to the 61-year-old New York senator and she hasn't decided if she would take it, the Democrat familiar with the process said.

Cabinet nominations are subject to confirmation by the Senate, where Democrats will have at least a 58-42 majority when the next Congress is sworn in. Two Senate races -- in Minnesota and Georgia -- have yet to be decided.

White House Staff

The Obama team also has been moving quickly to fill top White House staff posts. Rahm Emanuel, a U.S. representative from Illinois and a former Clinton administration adviser, has been designated for chief of staff.

He met this afternoon with Republican congressional leaders on Capitol Hill to discuss how both parties can work together.

Speaking to reporters afterward, Emanuel said he went to the Capitol at Obama's request to let Republicans know that ``we welcome their ideas and their concepts.''

``The challenges facing the country require that people of both parties work together,'' he said.

In addition, Peter Orszag, the head of the Congressional Budget Office, has been offered and likely will accept the job of director of the White House Office of Management and Budget, according to a congressional aide and a party official.

Also yesterday, David Axelrod, the chief strategist behind Obama's historic presidential campaign, was named as a senior adviser to the president, and veteran Washington lawyer Greg Craig will be White House counsel, Obama's transition team announced. Craig represented Bill Clinton during his impeachment proceedings and was a national security adviser to Obama during the presidential campaign.

Lisa Brown, who was counsel to Vice President Al Gore, will be Obama's staff secretary and Christopher Lu, who first worked for Obama in the Senate, will be Cabinet secretary.

The president's Cabinet consists of the heads of 15 executive departments and the vice president. In addition, the White House chief of staff, Office of Management and Budget director, U.S. Trade Representative, Environmental Protection Agency administrator and the head of the Office of National Drug Control Policy hold Cabinet rank.

To contact the reporter on this story: Julianna Goldman in Chicago at jgoldman6@bloomberg.net

Last Updated: November 20, 2008 18:47 EST