(Refiles to fix spelling of Lindsey Graham's first name, paragraph 19)
By Susan Cornwell
WASHINGTON, Oct 20 (Reuters) - Acting White House Chief of Staff Mick Mulvaney said on Sunday he had not offered to resign for indicating last week that U.S. President Donald Trump had sought a political favor from Ukraine in exchange for military aid, comments he has since retracted.
"I never said there was a quid pro quo because there isn't," Mulvaney told "Fox News Sunday," using a Latin phrase meaning a favor for a favor.
Mulvaney told reporters on Thursday that Trump's decision to withhold $391 million in aid to Ukraine was linked in part to his desire for an investigation by Kiev into a debunked theory that a Democratic National Committee (DNC) computer server was held in Ukraine.
When told by a reporter that what he had just described was a quid pro quo, Mulvaney responded: “We do that all the time with foreign policy.”
His remarks at a White House news conference created turmoil in Washington and left the president's Republican allies flummoxed and frustrated.
Mulvaney walked back the comments in a statement the same day. But after weeks in which the president argued that he had done nothing wrong, Mulvaney's remarks undermined the core arguments that Trump and his advisers have made against the effort to oust him from office in a House of Representatives impeachment inquiry.
"This Scam going on right now by the Democrats against the Republican Party, and me, was all about a perfect phone call I had with the Ukrainian President. He's already stated, NO PRESSURE!" Trump said as part of a series of tweets later on Sunday.
Mulvaney said on Sunday he did not offer to resign over the episode, nor was his possible resignation discussed at the White House.
"Absolutely, positively not," he told Fox News Sunday. "I'm very happy working there. Did I have the perfect press conference, no, but again the facts are on our side. ... I still think I'm doing a pretty good job as the chief of staff and I think the president agrees."
Trump, a Republican who is seeking re-election in 2020, has said the aid to Kiev was frozen because he believed European countries should also contribute. Mulvaney said on Sunday the European aid had been a concern along with corruption in Ukraine, and noted that the "aid flowed" eventually.
U.S. Secretary of State Mike Pompeo on Sunday supported Mulvaney's walk-back of his remarks, saying he had not seen evidence of a connection between withholding Ukraine aid and Kiev pursuing a political investigation.
"I never saw that in the decision-making process that I was a part of .... the conversation was always around what were the strategic implications, would that money get to the right place or would there be corruption in Ukraine and the money wouldn't flow to the mission that it was intended for," Pompeo said on ABC's "This Week."
The original Mulvaney remarks produced anxiety among some Republicans, including Senator Lisa Murkowski, who told reporters foreign aid should not be held up for a political initiative.
Mitt Romney, a U.S. senator and 2012 Republican presidential nominee, criticized Trump's actions in a recent interview, calling it "shocking" that Trump publicly said China and Ukraine should investigate political rival and former Vice President Joe Biden and his son.
"It was shocking, in my opinion ... and a mistake," he said on "Axios on HBO." "I can't imagine coming to a different point of view."
Mulvaney told "Fox News Sunday" it was "just absurd" to think that the episode, as well as Republican resistance to Trump's plan to pull U.S. troops from Syria, made it more likely the Republican-led Senate would vote to convict Trump on impeachment charges if they are filed by the Democratic-led House.
Mulvaney said Trump was still "extraordinarily popular back home" and Republican lawmakers would respond to that.
Senator Lindsey Graham, a Republican who frequently allies himself with Trump, told Axios he would need to see more evidence before considering impeachment.
"If you could show me that, you know, Trump actually was engaging in a quid pro quo, outside the phone call, that would be very disturbing," he said.
Democrats continued to focus on the Ukraine quid pro quo issue.
"Republicans face a simple question: is the president allowed to pressure a foreign country into interfering in our elections? History will remember their answer, or their silence," House Speaker Nancy Pelosi wrote on Twitter. (Reporting by Susan Cornwell; Additional reporting by Amanda Becker, Tim Ahmann and Pete Schroeder; Editing by Bill Berkrot and Peter Cooney)