Dr. Tracey, I think this is a very interesting case study about Politics. Personally, I think it depends on the direction the CEO is willing to go with his company.

1. He should hire Pat Talley for now as CIO.  The reason why is because he has earned the position due to his experience, loyalty, and contributions to the company.

2. Yes, his is sabotaging his career by thinking of relationship building as office politics.  I would let him know if he wants to keep his job as the CIO, he is good to have to develop his relationship skills, be a to communicate with others, and have a vision and strategy for others to understand.  He cannot expect technical expertise and competence to be the qualifications for the CIO position only.

3. Pat uses technical expertise and competence to be the qualifications for the position.  He reputation as a fair but tough leader.  He demanded excellence and could be unforgiving in his attitude toward those with less technology interest or expertise.

Carmelita had excellent relationship building skills, possess a strong desire to learn about the position, and getting to know everyone and the company. She had the personality to work the room and can handle any situation, particularly those sticky people problems that arise within teams or with suppliers.

I would create a position for Carmelita within the company. 

I think Carmelita would be more of a influential leader.  The reason why is because she does the research and stays on the top of the latest trends and products in I.T. She can handle any situation, particularly those with sticky people problems that arise within teams or with suppliers.