April 9 (Bloomberg) -- Mark Penn continues to roil Hillary Clinton's presidential campaign after the announcement that he was being replaced as top strategist for helping Colombia promote a trade accord.

As Clinton rival Barack Obama and his trade-union allies use Penn's business associations to stoke support among voters going into the April 22 Pennsylvania primary, Penn still participates in campaign strategy calls, conducts polling, dispenses advice and manages Clinton's direct-mail operation.

The situation has caused tension within Clinton's camp, which said on April 6 that veteran pollster Geoff Garin and Communications Director Howard Wolfson would take over the strategic reins.

``Geoff Garin is someone I've known for 30 years,'' said James Carville, who managed Bill Clinton's 1992 presidential campaign. ``If they think they're going to let him be used in some bait-and-switch campaign, they're mistaken.''

With 10 state primary contests remaining, Clinton trails Obama in the popular vote and among delegates to the party's nominating convention in August. Pennsylvania is a must-win state for her, and the Penn controversy, if it lingers, may damage her courtship of blue-collar workers.

``This will only fuel the Clinton-in-disarray narrative, an untimely blow as Pennsylvania looms,'' said Rogan Kersh, a professor of public service at New York University.

`Error in Judgment'

The campaign said it stripped Penn of part of his portfolio after the Colombian government fired Burson-Marsteller, the public relations firm where he is chief executive officer. Penn had met with Colombian officials to help them push the free- trade deal, which Clinton opposes. He later apologized, calling the meeting an ``error in judgment.'' Colombia, in dismissing him, said he showed a ``lack of respect.''

Obama, 46, and his supporters are working hard to keep the Penn dustup alive. Teamsters President James Hoffa, who is touring Pennsylvania this week, is citing what he calls Penn's pro-trade and anti-worker clientele to attack Clinton's credibility.

``She has to sever completely with Mark Penn,'' Hoffa said in a telephone interview. ``Her credibility is at stake.''

The issue may resonate in the state's industrial centers, such as Harrisburg, Scranton and Wilkes-Barre, where a dogfight between the candidates is shaping up, Hoffa said.

Clinton, 60, campaigning today in Hopewell, Pennsylvania, said the brouhaha over Penn won't hurt her in the state. ``I don't see why it should,'' she told reporters.

`Strong Opponent'

She said she has been a ``consistent and strong opponent of the Colombia free-trade deal,'' which President George W. Bush sent yesterday to Congress for approval.

Wolfson noted earlier that Obama's top economic adviser, Austan Goolsbee, met with Canadian officials in February after the North American Free Trade Agreement emerged as a campaign issue. A Canadian memo said Goolsbee told the Canadians that Obama's public pledge to force a renegotiation of Nafta was ``political positioning,'' the Associated Press reported. Goolsbee said his remarks were misinterpreted.

``It's just more hypocrisy from the Obama campaign,'' Wolfson said. ``He should be worrying about his own house.''

Wolfson said Penn's role with the campaign is diminished. ``It's the difference between someone who is playing the key role and someone playing an important role,'' Wolfson said.

Clinton said there wasn't ``any connection'' between her campaign and what Penn did ``in his independent business capacity.''

Penn didn't respond to requests for comment yesterday.

Ties to Companies

Labor groups for at least a year have been raising concerns about Penn's ties to companies with agendas that diverge from Clinton's.

The Teamsters and Unite Here, a textile union, last June wrote a letter to Clinton's Senate office questioning Penn's role in light of Burson-Marsteller's work advising Cintas Corp., a uniform-rental company, on how to thwart a union's organizing effort.

Penn, 54, has also worked counter to Clinton's position on the environment and energy. Last year, he wrote in an internal company blog about how Burson worked ``behind the scenes'' for TXU Corp., a Texas company seeking to build power plants fueled by pulverized coal, which some environmentalists say would be major polluters.

At the time, Clinton was pushing for more research into new energy technologies to help stem greenhouse gases and reduce dependence on foreign oil. Other Burson clients include tobacco companies and drugmakers.

Dual Roles

Penn's work on the political and private-sector sides of the fence isn't new to Washington. Most consultants, however, take leave from advising companies to avoid conflicts with their political clients. David Axelrod had corporate clients before joining Obama's campaign as chief strategist, as did Mark McKinnon, top adviser to presumptive Republican nominee John McCain.

Wolfson, who holds an equity stake in Glover Park Group, a public relations shop that won its own contract with the Colombian government after Wolfson took a leave of absence to join Clinton, said the Penn controversy will blow over.

``Voters care about what candidates are going to do in office, not who works in their campaigns,'' Wolfson said.

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

Last Updated: April 9, 2008 14:15 EDT