Republican Senator Questions Administration’s Treatment of Two More Inspectors-General

By Fred Lucas | June 19, 2009 | 9:47 AM EDT

Sen. Charles Grassley (R-Iowa) (AP File Photo/J. Scott Applewhite)

( – Two government watchdogs are being impeded in their attempt to independently monitor the federal bureaucracy, according to a Republican senator who is also probing the Obama administration’s firing of a third government inspector-general.
Sen. Charles Grassley (R-Iowa) sent two letters Thursday, one to the Treasury Department and the other to the International Trade Commission, regarding the treatment of the inspectors-general at those two agencies.
The Treasury Department apparently is using attorney-client privilege to withhold certain documents from Neil Barofsky, the special inspector general for the Troubled Assets Relief Program (TARP), the $700-billion bailout program for the financial industry.
“It is reported to my office that there is some disagreement about the nature and the authority of the Special Investigator General for the Troubled Assets Relief Program (SIGTARP) to operate and access documents within the Department of Treasury,” Grassley’s said in his letter to Treasury Secretary Timothy Geithner.
“Specifically, my office received information that there was a dispute over certain Treasury documents that were being withheld from SIGTARP auditors on a specious claim of attorney-client privilege. It is my understanding that this disagreement then escalated into a broader claim about whether SIGTARP is subject to your direct supervision and direction, which may have been referred outside Treasury for an independent legal opinion.”

In a statement, Grassley said the public “is furious about the way TARP dollars have been used and what looks like a lack of accountability for this massive infusion of tax dollars.”

It would be adding insult to injury if the Treasury Department is trying to impede the work of the watchdog who’s supposed to track the money – at a time when the public is demanding more transparency and accountability from Washington, the senator added.
Grassley also wants to know what’s happening at the International Trade Commission, where the agency’s Inspector-General Judith Gwynne reported that an ITC employee “forcibly removed” documents in her possession. The Chicago Tribune reported that Gwynne has been fired by the ITC.
“I was disappointed to learn that…the ITC failed to ensure the files were immediately returned intact and unaltered,” Grassley said in a letter to Shara L. Aranoff, chairwoman of the ITC. “The ability of inspectors-general to secure agency records subject to audit or investigation is essential to ensure the integrity and reliability of their work on behalf of Congress and the American people.”
Grassley noted that inspectors-general are the “watchdogs” of the federal bureaucracy – “and the ability to act independently is fundamental to their success in holding government agencies accountable to the public.”

Grassley, the ranking Republican on the Senate Finance Committee, has spent much of the last week pursuing information from the White House about why President Barack Obama fired Gerald Walpin, the inspector-general of the Corporation for National and Community Service, which runs the youth volunteer program AmeriCorps.
The firing came after Walpin led an investigation into the alleged misuse of federal grants by Kevin Johnson, now the mayor of Sacramento, who is a political ally of the president. Walpin’s probe centered on Johnson’s work with an education charity called St. Hope Academy.
Federal money intended for the charity allegedly was used to pay for political activities and to run personal errands for Johnson, according to the IG report.
Ultimately, Johnson and St. Hope agreed to repay half of the $847,000 in grants they received from AmeriCorps between 2004 and 2007.
Federal law requires the White House to communicate in writing the reasons for removing an inspector-general – at least 30 days before it happens. No such notice was provided to Congress in Walpin’s case.
Under pressure, White House ethics counsel Norm Eisen defended Walpin’s firing, saying that Walpin was “confused, disoriented [and] unable to answer questions” at a May 20 meeting of the board of the Corporation for National and Community Service, press reports said.
“There were several periods of time where there were one- to two-minute pauses where he clearly was confused and was not able to respond to questions and was just going through his notes…..It was painful,”  a panel member told
Walpin, 77, insists that politics is behind his firing, and he has accused the White House of trying to make him sound senile.