A classical, polarizable, electrostatic theory of short-ranged atom-atom interactions, incorporating the smeared nature of atomic partial charges, is presented. Detailed models are constructed for CO monomer and for CO interacting with an iron atom, as a first step toward heme proteins. A good representation is obtained of the bond-length-dependent dipole of CO monomer from fitting at the equilibrium distance only. Essential features of the binding of CO to myoglobin (Mb) and model heme compounds, including the binding energy, the position of the minimum in the Fe-C potential, the Fe-C frequency, the bending energy, the linear geometry of FeCO, and the increase of the Stark tuning rate and IR intensity, are obtained, suggesting that a substantial part of the Fe-CO interaction consists of a classical, noncovalent, "electrostatic bond ". The binding energy is primarily polarization energy, and the polarization energy of an OH pair in water is shown to be comparable to the experimental hydrogen bond energy.