GOP Lawmaker Wants White House to Produce Communications Related to Firing of Inspector General

June 22, 2009 - 4:53 PM
The communications between the White House and the U.S. attorney for the Eastern District of California regarding the firing of an inspector general – who uncovered misuse of federal funds by a charity run by an Obama political ally – should be released and reviewed, said Rep. Darrell Issa (R-Calif.), ranking member of the House Oversight and Government Reform Committee.

President Barack Obama grills on the South Lawn of the White House, Friday, June 19, 2009, in Washington during an event in conjunction with fatherhood and mentoring. (AP Photo/Haraz N. Ghanbari)

(CNSNews.com) – The communications between the White House and the U.S. attorney for the Eastern District of California regarding the firing of an inspector general--who uncovered misuse of federal funds by a charity run by an Obama political ally--should be released and reviewed, said Rep. Darrell Issa (R-Calif.), ranking member of the House Oversight and Government Reform Committee.
 
The ousting of Gerald Walpin, inspector general of the Corporation for National and Community Service--the agency that runs the youth volunteer program AmeriCorps--sparked controversy on Capitol Hill last week as members of both parties sought more answers from the White House.

White House lawyers told oversight committee investigators that the Walpin firing was an act of political courage, according to Issa.

“Gerald Walpin led an aggressive investigation of a political ally of President Obama that successfully recovered taxpayer dollars,” Issa said in a statement. “While firing an investigator who uncovered the abuse of funds by a political ally might be considered an act of ‘political courage’ in Chicago politics, for most Americans it raises troubling questions.”

The White House cited a complaint against Walpin by Lawrence G. Brown, acting U.S. Attorney for the Eastern District of California, as one of the reasons for the firing.

Walpin said the complaint was retaliation because Brown knew he was preparing a report for the Senate Health, Education, Labor and Pensions Committee that questioned a financial settlement worked out between St. HOPE Academy and the federal government--the settlement involved funds that had been overseen by Obama supporter Kevin Johnson, who is now the mayor of Sacramento.

Obama initially informed Congress on June 11 that he fired Walpin, providing no other reason except that he had lost confidence in him.

Some members of Congress complained that this was not in compliance with the Inspector General Reform Act of 2008, a bill Obama co-sponsored in the Senate.

The law requires that the president give Congress 30 days notice before dismissing an inspector general and provide Congress with an explanation of why such action is necessary. Inspectors general are appointed as watchdogs in federal agencies and departments to guard against inefficiencies and corruption.

To provide further explanation demanded by members of Congress, White House Counsel Norman Eisen wrote a letter to the Senate Homeland Security and Government Affairs Committee describing the 77-year-old Walpin as “confused [and] disoriented.”

Eisen also stated as a reason for the firing that, “Upon our review, we also determined that the Acting United States Attorney for the Eastern District of California, a career prosecutor who was appointed to his post during the Bush Administration, had filed a complaint about Mr. Walpin’s conduct with the oversight body for inspectors general, including for failing to disclose exculpatory evidence.”

The complaint, Walpin contends, was a preemptive retaliation by Brown who knew a report critical of the St. HOPE settlement deal was forthcoming/

Issa expressed the need for records on communications with the White House regarding Walpin in a letter to Brown.

“The committee’s investigation into whether or not the president’s action complied with the requirements of the IG act requires us to consider whether or not the material considered by the White House is reliable,” Issa wrote to Brown.
 
“The allegations that form the basis for your complaint seem very ordinary, which makes the fact that you pursued sanctions against Mr. Walpin seem extraordinary by contrast. This begs certain questions about the reason the complaint was filed,” Issa added.

However, Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, thinks the White House was on solid ground.
 
“Based on the information provided at the briefing and my review of other information, it appears that there was cause to remove Mr. Walpin based on misconduct,” Towns said in a statement. “However, due to the importance of preserving the independence of Inspectors General, I am continuing to review this matter.”
 
Brown is not commenting on the matter any longer, spokeswoman Lauren Horwood said. But she said he made the complaint to the oversight board before the IG report to the Senate committee.
 
“I can say that when Mr. Brown wrote his letter to the committee that oversees the IG offices, he didn’t know about any report that Walpin was working on,” Horwood told CNSNews.com. “It was before that. So it was only in response to the investigation and what happened during the investigation. It wasn’t anything after the investigation that Mr. Brown was responding to.”
 
After further questions, however, Horwood said Brown was aware that Walpin disagreed with the settlement.
 
“He [Brown] knew that he wasn’t happy with it. It was evident,” Horwood said. “So, that wasn’t a surprise. But it wasn’t in retaliation.”
 
Walpin’s 2008 investigation discovered the misuse of $847,673 in AmeriCorps funds (between 2004 and 2007) that went to St. HOPE Academy, a nonprofit group then run by former pro-basketball player Kevin Johnson.
 
The money allegedly went to supplement staff salaries, have volunteers engage in political activity in school board campaigns, and to use participants to run personal errands for Johnson, such as washing his car.
 
In September, the Debarment and Suspension Official for the Corporation for National of Community Service – which oversees AmeriCorps – determined that Johnson, St. HOPE Academy, and the executive director of St. HOPE’s Neighborhood Corps – Dana Gonzolaz – were on an “excluded parties” list, which barred them from receiving any federal funds.
 
That November, 2008, Johnson was elected mayor of Sacramento.
 
In March 2009, Frederic M. Levy, a government-contracting expert hired by the City of Sacramento, said that the city could be barred from receiving federal monies, including those from the $787-billion economic stimulus package, because of Johnson’s status on the “excluded parties” list.
 
Johnson said he would sue the federal government if he is not taken off that list.
 
On April 9, Brown announced a settlement that would require St. HOPE to repay the National Corporation for National and Community Service $423,836.50 over 10 years. Johnson paid an immediate $72,836.50 of that amount from his own pocket, but he is eligible to seek repayment from St. HOPE. Gonzalez was ordered to pay $1,000.
 
The IG report to the Senate complains that “Johnson assumes no liability for the amount the government should be repaid. The effect is to penalize the charitable entity, not the people who misused it.”
 
The report also notes that all parties involved were removed from the “excluded parties” list.
 
St. HOPE Academy must pay a significant amount for its improper handling of AmeriCorps funds,” Brown said in a statement. “The lifting of the suspension against all parties, including Mayor Johnson, removes any cloud whether the City of Sacramento will be prevented from receiving much-needed federal stimulus funds.”
 
Walpin said he immediately made his objections known to Brown. Further, he expressed that he was obligated to make a report to the Senate about the settlement.
 
On April 29, Brown sent a letter to the FBI oversight body of inspectors general complaining of Walpin’s conduct in the St. HOPE probe and alleging that Walpin withheld exculpatory evidence.
 
Walpin told CNSNews.com: “He was retaliating because I had informed him and the corporation that when they first told me that they were thinking of a settlement, that included lifting the suspension of Johnson, that if they entered into a settlement without my agreement – particularly if it includes lifting of the suspension against Johnson when Johnson had failed to present any facts disputing the findings of the corporation official that suspended him – I would be forced to have to perform my duties of reporting the full facts to Congress, which later on I did do.”
 
The IG report to the Senate committee was signed by Walpin and two assistant inspectors general and released in early May. It states that such a lenient settlement was not needed to ensure that Sacramento receive federal funds.
 
“The suspension procedure exists to protect federal funds so that they are not entrusted into the control of someone who has, by his previous record with federal funds, been shown not to be trustworthy,” the report said.
 
“Thus, if the corporation and the U.S. Attorney wanted to reconcile both the protection of the suspension procedure and the desire to allow the flow of federal funds to Sacramento, they could have insisted that an independently appointed ‘Federal Funds Guardian’ be appointed to review and safeguard the city’s use of federal funds, in place of the mayor,” the report added.
 
The IG report to the Senate said the settlement essentially says: “Johnson was not sufficiently responsible to receive further federal funds in his management position as a grantee, he suddenly became sufficiently responsible when elected mayor of a city receiving substantially more federal funds – akin to deciding that while one should not put a fox in a small chicken coop, it is fine to do so in a large chicken coop.”
 
The IG report further says, “The settlement accepted by the corporation leaves the unmistakable impression that relief from a suspension can be bought,” and that “reimbursing the federal government for past irresponsible conduct, when caught, does not by itself provide evidence of responsibility in the future to handle federal funds in a proper manner.”