The White House Fires a Watchdog - WSJ.com

The White House Fires a Watchdog - WSJ.com

President Obama swept to office on the promise of a new kind of politics, but then how do you explain last week's dismissal of federal Inspector General Gerald Walpin for the crime of trying to protect taxpayer dollars? This is a case that smells of political favoritism and Chicago rules.

A George W. Bush appointee, Mr. Walpin has since 2007 been the inspector general for the Corporation for National and Community Service, the federal agency that oversees such subsidized volunteer programs as AmeriCorps. In April 2008 the Corporation asked Mr. Walpin to investigate reports of irregularities at St. HOPE, a California nonprofit run by former NBA star and Obama supporter Kevin Johnson. St. HOPE had received an $850,000 AmeriCorps grant, which was supposed to go for three purposes: tutoring for Sacramento-area students; the redevelopment of several buildings; and theater and art programs.
[The White House Fires a Watchdog] Associated Press

Gerald Walpin, Inspector General of the Corporation For National and Community Service, was fired by President Barack Obama.

Mr. Walpin's investigators discovered that the money had been used instead to pad staff salaries, meddle politically in a school-board election, and have AmeriCorps members perform personal services for Mr. Johnson, including washing his car.

At the end of May, Mr. Walpin's office recommended that Mr. Johnson, an assistant and St. HOPE itself be "suspended" from receiving federal funds. The Corporation's official charged with suspensions agreed, and in September the suspension letters went out. Mr. Walpin's office also sent a civil and/or criminal referral to the U.S. Attorney for the Eastern District of California.

So far, so normal. But that all changed last fall, when Mr. Johnson was elected mayor of Sacramento. News of the suspension had become public, and President Obama began to discuss his federal stimulus spending. A city-hired attorney pronounced in March that Sacramento might be barred from receiving stimulus funds because of Mr. Johnson's suspension.

The news caused a public uproar. The U.S. Attorney's office, which since January has been headed by Lawrence Brown -- a career prosecutor who took over when the Bush-appointed Attorney left -- had already decided not to pursue criminal charges. Media and political pressure then mounted for the office to settle the issue and lift Mr. Johnson's suspension. Mr. Walpin agreed Mr. Johnson should pay back money but objected to lifting the suspension. He noted that Mr. Johnson has never officially responded to the Corporation's findings and that the entire point of suspension is to keep federal funds from individuals shown to have misused them.

Mr. Brown's office responded by cutting off contact with Mr. Walpin's office and began working directly with the Corporation, the board of which is now chaired by one of Mr. Obama's top campaign fundraisers, Alan Solomont. A few days later, Mr. Brown's office produced a settlement draft that significantly watered down any financial repayment and cleared Mr. Johnson. Mr. Walpin told us that in all his time working with U.S. Attorneys on cases he'd referred, he'd never been cut out in such fashion.

Mr. Walpin brought his concerns to the Corporation's board, but some board members were angry over a separate Walpin investigation into the wrongful disbursement of $80 million to the City University of New York. Concerned about the St. HOPE mess, Mr. Walpin wrote a 29-page report, signed by two other senior members of his office, and submitted it in April to Congress. Last Wednesday, he got a phone call from a White House lawyer telling him to resign within an hour or be fired.

We've long disliked the position of inspectors general, on grounds that they are creatures of Congress designed to torment the executive. Yet this case appears to be one in which an IG was fired because he criticized a favorite Congressional and executive project (AmeriCorps), and refused to bend to political pressure to let the Sacramento mayor have his stimulus dollars.

There's also the question of how Mr. Walpin was terminated. He says the phone call came from Norman Eisen, the Special Counsel to the President for Ethics and Government Reform, who said the President felt it was time for Mr. Walpin to "move on," and that it was "pure coincidence" he was asked to leave during the St. HOPE controversy. Yet the Administration has already had to walk back that claim.

That's because last year Congress passed the Inspectors General Reform Act, which requires the President to give Congress 30 days notice, plus a reason, before firing an inspector general. A co-sponsor of that bill was none other than Senator Obama. Having failed to pressure Mr. Walpin into resigning (which in itself might violate the law), the Administration was forced to say he'd be terminated in 30 days, and to tell Congress its reasons.

White House Counsel Gregory Craig cited a complaint that had been lodged against Mr. Walpin by Mr. Brown, the U.S. Attorney, accusing Mr. Walpin of misconduct, and of not really having the goods on Mr. Johnson. But this is curious given that Mr. Brown himself settled with St. HOPE, Mr. Johnson and his assistant, an agreement that required St. HOPE (with a financial assist from Mr. Johnson) to repay approximately half of the grant, and also required Mr. Johnson to take an online course about bookkeeping.

Iowa Republican Chuck Grassley, a co-sponsor of the IG Reform Act, is now demanding that the Corporation hand over its communications on this mess. He also wants to see any contact with the office of First Lady Michelle Obama, who has taken a particular interest in AmeriCorps, and whose former chief of staff, Jackie Norris, recently arrived at the Corporation as a "senior adviser."

If this seems like small beer, keep in mind that Mr. Obama promised to carefully watch how every stimulus dollar is spent. In this case, the evidence suggests that his White House fired a public official who refused to roll over to protect a Presidential crony.