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President Obama Fires Controversial Inspector General
June 12, 2009 1:49 PM
With little public notice, President Obama Thursday fired the Inspector General of the Corporation for National and Community Service, Gerald Walpin.
Saying he was “exercising my power as president,” Mr. Obama suspended Walpin with pay, saying his termination would be “effective 30 days from now.”
The president wrote that “it is vital that I have the fullest confidence in the appointees serving as Inspectors General. That is no longer the case with regard to this Inspector general.”
The decision was announced, such as it was, in letters the president wrote to House Speaker Nancy Pelosi, D-Calif., and Vice President Joe Biden in his role as president of the Senate.
White House counsel Greg Craig, responding to a letter of concern about Walpin’s termination from Sen. Chuck Grassley, R-Iowa, noted 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, has referred Mr. Walpin’s conduct for review by the Integrity Committee of the Council of Inspectors General on Integrity and Efficiency.”
Craig said that the White House was “aware of the circumstances leading to that referral and of Mr. Walpin’s conduct throughout his tenure and can assure you that that the president’s decision was carefully considered.” He noted that Walpin’s termination “is fully supported by the Chair of the Corporation (a Democrat) and the Vice-Chair (a Republican).”
Exactly what conduct issues necessitated review was unclear; the White House and the office of the Acting U.S. Attorney for the Eastern District of California would not comment.
A source familiar with the president’s thinking told ABC News that “Mr. Walpin’s overall conduct in a variety of circumstances -- well beyond the scope of the Assistant U.S. Attorney’s referral -- led the president to conclude that Mr. Walpin should be replaced by someone who could effectively provide the kind of independent oversight that the president values.”
Walpin had been criticized for the way he handled an investigation into Kevin Johnson, former point guard of the Phoenix Suns, who was elected Mayor of Sacramento last November and is an ally of the president’s.
Johnson helped found a community group called St. HOPE Academy, and Walpin investigated how $847,673 in grant funds from AmeriCorps, a division of the Corporation for National and Community Service, were used by St. HOPE.
The funds were approved for St. HOPE to manage one-on-one tutoring for elementary and high school students; managing the redevelopment of one building a year in the Oak Park neighborhood; and for work surrounding Guild Theater and Art Gallery events.
The goals were to improve the reading and math for 100 elementary and high school students, to stimulate economic growth in Oak Park, to increase local arts programming and to recruit and train 500 volunteers to complete 10,000 hours of service.
But in the thick of Johnson’s mayoral run last September, Walpin announced that Johnson, St. HOPE Academy, and former St. HOPE executive director Dana Gonzalez, were suspended from participating in federal contracts or grants until the investigation was complete.
Walpin said in a statement at the time that his initial report "cited numerous potential criminal and grant violations, including diversion of federal grant funds, misuse of AmeriCorps members and false claims made against a taxpayer-supported Federal agency."
The Inspector General investigated whether any of the AmeriCorps funds had been diverted and misused, among them: that AmeriCorps members had been used to recruit students for St. HOPE Academy, for non-AmeriCorps clerical and other services, and for political activities in connection with the Sacramento Board of Education election. AmeriCorps members performed services “personally benefiting… Johnson,” such as “driving [him] to personal appointments, washing [his] car, and running personal errands.”
Grant-funded AmeriCorps members were taken “to New York to promote the expansion of St. HOPE operations in Harlem,” Walpin charged.
"When you instead take the AmeriCorps members to New York for a purpose not within the grant, you are misusing the members and diverting the funds from the purposes intended," Walpin told The New York Sun’s Josh Gerstein.
Johnson called the announcement “politically motivated.” His campaign pointed out that in 2005 Walpin introduced Massachusetts Gov. Mitt Romney at an event in Washington, DC, as the governor of a state run by the "modern-day KKK ... the Kennedy-Kerry Klan."
Johnson’s campaign issued a statement saying, "we have said all along that there may have been administrative errors, much like the hundreds of other small nonprofits that have been investigated in the past. We are confident that the U.S. Attorney will decide not to proceed when it conducts a nonpolitical review of the allegations."
Johnson’s attorney Bill Portanova told reporters that “volunteer organizations are staffed by people with good hearts and intentions and, as a rule, are not accountants by trade.”
Johnson in November won the mayoral race, defeating the incumbent.
In spring of this year, questions began being asked about whether Mayor Johnson could receive stimulus dollars given his suspension from being able to received federal grants.
Johnson's lawyer, Matthew G. Jacobs, wrote to AmeriCorps asking for Mayor Johnson’s suspension to be lifted. ''The idea that somehow these regulations were supposed to apply to a private individual or bar an entire public entity or the Sacramento region on the basis of the private activities of an individual who just happened to become mayor strains credulity,'' Jacobs wrote.
In April of this year, the new Acting Attorney General, Lawrence Brown, settled the case, requiring St. HOPE Academy to pay $423,836.50 -- $72,836.50 of which would be paid personally by Mayor Johnson. Walpin complained that he had not been consulted on the settlement.
“The agreement reached strikes a proper balance between accountability and finality,” Brown said in a statement. “St. HOPE Academy must pay a significant amount for its improper handling of AmeriCorps funds. 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.”
The settlement included St. HOPE formally acknowledging that it did not adequately document a portion of its expenditures of the grant awards. In addition Johnson and Gonzalez were to register to take an online course offered by Management Concepts titled “Cost Principles.”
On May 6, Walpin expressed disagreement with the decision to settle.
“The only circumstance that changed was the sudden media and political pressure to settle the matter monetarily and lift the suspension,” Walpin wrote. “These pressures had the desired effect.”
Walpin charged that AmeriCorps made a “180-degree turnaround” on the circumstances in the case “based on the change of circumstances of Respondent Johnson, who had, after directing St. HOPE’s misuse of the grant funds provided to it and receiving the suspension notice, become Mayor of Sacramento. The suspension was lifted because, as one Corporation official put it, the Corporation could not ‘stand in the way of Sacramento’ -- thereby effectively stating that, while Respondent 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…”
Walpin said this was “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!”
Walpin charged that the settlement “(s)ends the signal that acceptance of a grantee or its principal as 'responsible' can be purchased in a monetary settlement, overriding all evidence of wrongdoing previously found to warrant a suspension, without the presentation of any contradicting evidence."
He said arguments that the settlement is in the government's interest "is an attempt to pull the wool over the public's eyes.”
Yesterday, Walpin was told to clear out his desk immediately.
Grassley said Walpin needed to be given 30-days notice, which he said is required by the 2008 Inspector General Reform Act that President Bush signed into law and then-Sen. Obama co-sponsored.
Specifically, Section 3 of the law requires that, “the president shall communicate in writing the reasons for any such removal or transfer to both Houses of Congress, not later than 30 days before the removal or transfer.”
“No such notice was provided to Congress in this instance,” Grassley wrote in a letter to the president.
“Given that you were a cosponsor of this vital legislation I am deeply troubled to learn of the ultimatum given Inspector General Walpin absent Congressional notification,” Grassley wrote.
Grassley wrote that the Integrity Committee of the Council of the Inspectors General on Integrity and Efficiency had not produced any negative findings against Walpin, and “he has identified millions of dollars in AmeriCorps funds either wasted outright or spent in violation of established guidelines. In other words, it appears he has been doing his job.”
Noting recent “massive increases in federal spending of late,” Grassley said that “it is more critical than ever that we have an Inspector General community that is vigorous, independent, and active in rooting out waste, fraud, and abuse. I urge you to review the Inspector General Reform Act you cosponsored and to follow the letter of the law should you have cause to remove any Inspector General.”
Craig disagreed, saying that Walpin’s termination -- being suspended for 30 days with pay -- was “fully consistent with the Inspector General Act.”
-- jpt
June 12, 2009 | Permalink | Share | User Comments (90)
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The article notes:
"In April of this year, the new Acting Attorney General, Lawrence Brown, settled the case, requiring St. HOPE Academy to pay $423,836.50 -- $72,836.50 of which would be paid personally by Mayor Johnson. Walpin complained that he had not been consulted on the settlement."
I have messed up my check book here and there but to the tune of $423,000+????
That was the settlement. Who knows how much Johns "mistakingly" used for things he had no idea he should not use the money.
Sounds like Hussein has given us the change of which he spoke/
Posted by: Pastor Jack Wilson | Oct 30, 2009 8:36:29 AM
This is like a Grisham novel (or the Clinton Administration). People who rock the boat or expose fraud are simply removed and the state run media just looks the other way. Just like Acorn and the others, Obama gets a free ride again.
Posted by: eric | Jun 18, 2009 9:56:35 AM
Why should anyone be surprised at this? He is only doing what has been doing since he first entered politics. He honed his craft in the corrupt Chicago machine. What we have in the White House is the most corrupt president in our nation's history. What else is going on behind the scenes?
Posted by: Jennie | Jun 17, 2009 12:41:12 AM
I hope Walpin has something good up his sleeve, saving up some good dirt, and ammo to fight this to the end. With that ignoramus Michelle Obama involved, its gotta be highly likely she's made some big mistakes. The rest of the admin must be tired of scrambling to clean up for all the wreckless and idiotic things Mrs. Obama is doing. Someone in the admin Im sure will have to do something soon to reign her in before she blows it for all of them...
If I were Walpin, I'd file a lawsuit vs. the Obama admin. for this, they've clearly violated policy... Lets get this out into the plain view of all Americans who deserve to know about the corrupt activities in the Whitehouse!
Posted by: Chris H. | Jun 16, 2009 11:57:54 PM
Why is the Inspector General controversial? Because he is looking into a corrupt democrat. He'd still have a job if the crook was Republican. I sure HOPE something will CHANGE soon.
Posted by: SEAL76 | Jun 16, 2009 9:38:01 PM
You have to remember...It's only Fraud if they wish it to be... if your slush fund is run by Ted K. and his new dog Spot.....It's community non-profit....
Why do you think Gov't hates the so called "Organized Crime"....There can only be one....
Posted by: Jimmy | Jun 16, 2009 8:47:53 PM
What's with the headline? Who decided Mr. Walperin is controversial?
The controversial figures here are Johnson and the president.
And I love the line about how people who work for nonprofits basically don't know anything about handling money, but they have "good hearts." Sounds like reason enough to withhold funds to me.
Posted by: sreggie | Jun 16, 2009 2:40:06 PM
looks like Johnson was caught usign the Ameri-Corps as his personal slush fund and little elf helpers at taxpayer's expense.
Posted by: Aaron Webb | Jun 16, 2009 10:59:14 AM
ABC:"Controversial?" What's "controversial is how the media can cover up for Obama time in and time out. IF GW had done 1/15th of the things OBAMA has done, there would be 3 inch type headlines condemning him daily. but Obama gets a free pass on everything, from Rezco to the two trillion dollar deficit, to gas prices rising 35 % higher for no reason, to unemployment records, OBAMA gets a pass from ABC, NBC, etc..>WE used to have a press that actually investigated things. Now that they are paid arms of the DNC, they only dig up dirt on Republicans, while ignoring all the lies Obama said about the war, etc. HOW SAD! It should be a free press, but its now a FREE PASS!
Posted by: al brooks | Jun 16, 2009 3:06:31 AM
Suspending Walpin with 30 days pay, then firing him is equivalent to firing him without notice but granting him a 30 day severance package. This is not what the law allows.
The Obama admin has committed a criminal act with this abrupt dismissal and Walpin should pursue this in court.
Posted by: Sunshine | Jun 15, 2009 7:11:20 PM
Gerald Walpin, the inspector general fired for uncovering wrongdoing by a prominent Obama supporter, is a moderate Republican, not the right-wing kook depicted by the White House spin machine.
The White House itself recently cited and quoted Walpin, as a prominent and respected lawyer and former federal prosecutor, in supporting one of its judicial nominations, as was reported in a June 2 post at CNN's Political Ticker.
Posted by: Harold | Jun 15, 2009 3:45:09 PM
uh, jake. quick question: why is this dude a "controversial IG". wanst sure why you used that adjective. didnt see anything in the story to indicate it. or is anyone who actually asks a question of obama or one of his buddies, then 'controversial'.
joe the plumber
gerald the IG
who next?........
Posted by: fred | Jun 15, 2009 11:44:31 AM
I am reminded elsewhere that these actions began before last November's election. So it's unlikely that the August 2009 loomed large, if at all, in Mr. Brown's calculations, though he no doubt was aware as to who would likely win the election.
Some have questioned Mr. Walpin's actions, but he tried to get a resolution well before the election, and apparently was stonewalled by the Attorney's office. Also, for those who might question Mr. Walpin taking the matter to the press before the election, please remember that career professionals at the DoJ proceeded against Senator Stevens well before the election, surely with the awareness that the matter would not be resolved until after the election.
Posted by: Alfred J. Lemire | Jun 14, 2009 3:47:40 PM
Where's the outrage? Bil Clinton fired ALL of the attorney's and nothing was said. Bush fired 18 and Congress tried to impeach him. Nothing but crickets chirping over this one. The media and Congress and the Democratic Party are a bunch of lying hypocrites.
Posted by: Former_Democrat | Jun 13, 2009 6:40:26 PM
I hope this is not the end of this story, Jake... because I think BO thinks he is above the law and is intimidating government officials. This is highly illegal and unethnical. This IG should be fully reinstated and given a letter of apology for doing his job... protecting the taxpayer!
Posted by: Ben | Jun 13, 2009 12:11:44 PM
Perhaps Mr. Walpin discovered the documentation that AmeriCorps is actually intended by the Obama administration to become "Green Police". These will be inner-city youth, recruited and given green shirts, and sent out into surrounding suburbs to track and monitor the amount of electricity used by each house. Those homes having a larger consumption-per-capita ratio will be issued homeless people to whom the homeowners will be required to house and to feed at their own expense while their new energy tax is tripled.
Such is the dream of the left-wing nutjobs.
Posted by: Howard Beale | Jun 13, 2009 10:28:33 AM
The president wrote that “it is vital that I have the fullest confidence in the appointees serving as Inspectors General. That is no longer the case with regard to this Inspector general.”
----------------------------------------
Riiight! How dare Mr.Walpin question the manipulation of more than $850,000. of taxpayer dollars by one of your big-time supporters!!
Chicago politics at it finest. barf!!
Posted by: Sunnyr | Jun 13, 2009 5:28:27 AM
jhw539 wrote:
Uh, he's following the law. That's why the guy is still on the payroll for 30 days and Congress has been notified. If they want to raise any legitimate reasons other than partisan digs to counter this action, they have 30 days before he leaves government employment.
---------
Obama has to tell Congress WHY he fired him. He needn't bother making up a lie, because it's obvious he's just playing Chicago thuggery in D.C., as the smart people in this country knew he would and the dumber than dumb bozos who drank the Kool-Aid were too blasted stupid to figure out on their own.
Posted by: tanarg | Jun 13, 2009 12:51:09 AM
Clearly, Obama has improperly fired Walpin. Impeachable violation of the law?
Posted by: tanarg | Jun 13, 2009 12:48:05 AM
Obama, the crook...caught red-handed.
Posted by: Robert | Jun 12, 2009 11:53:02 PM
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