The curious firing of Gerald Walpin gets … curiouser

posted at 3:15 pm on June 15, 2009 by Ed Morrissey

Senator Charles Grassley has demanded records from the Obama administration over the dismissal of the Inspector General for Americorps and raises the possibility that Barack Obama broke a law he co-sponsored in the Senate that protects the independence of the IGs.  The firing comes as the Obama administration cut a sweetheart deal with a major Obama backer that allows him to receive federal funding as mayor of Sacramento, and fails to repay taxpayers for the money Kevin Johnson admittedly took illegally:

In an email and fax sent late Friday, Sen. Chuck Grassley, R-Iowa, demanded that Alan D. Solomont, the chairman of the Corporation for National and Community Service, provide “any and all records, email, memoranda, documents, communications, or other information, whether in draft or final form” related to President Obama’s firing of CNCS Inspector General Gerald Walpin. …

“For reasons that I do not yet understand, the OIG was excluded from this proceeding and the settlement lifting the suspension, was done in complete disregard of the OIG’s findings, as well as the previous determination of wrong doing identified in the Notice of Suspension,” Grassley wrote. “Perhaps the settlement agreement was reached without any input from the OIG, because less than half of what was misused by the Corporation grantees is being returned to the taxpayer and the OIG would not have agreed to this arrangement.  In fact, an argument can be made that not even half of the misused funds is being returned, because the settlement does not require that payment in full be made.  Rather the settlement places the grantees on a type of payment plan that will occur over a decade; to date less than 10% of the misused money has been recovered.”

Byron York interviewed Walpin and got more information on how the Obama administration froze him out of negotiations with Johnson:

As this was happening, the matter was also under consideration by the local U.S. attorney’s office after Walpin referred the matter to the office for a criminal inquiry. Since January of this year, the office has been headed by an acting U.S. attorney, Lawrence Brown, a career prosecutor who took over after the departure of the previous, Bush-appointed U.S. attorney.  The office decided not to pursue criminal charges against Johnson, but also entered into settlement talks with Johnson and St. HOPE.  What resulted was, according to Walpin, highly unusual.

Settlement talks would normally cover the issue of whether Johnson would be required to give the misused federal funds back to the government.  But amid the frenzy surrounding the possible denial of federal stimulus funds, Brown wanted to negotiate not only some sort of repayment scheme but also an end to Johnson’s suspension.  Walpin learned about that during a March telephone conversation with Brown.  “He said he wanted to settle,” Walpin recalls, “and he said that lifting the suspension had to be part of it because that was the 800-pound gorilla in the way of a settlement.”

Walpin was adamantly opposed to a lifting of the suspension; after all, he had recommended that Johnson not only be suspended but be barred for receiving future federal funds.  Walpin says that after that, he was cut out of the settlement talks; Brown worked directly with top officials of the Corporation, who seemed eager to work out a deal in a case involving a high-profile Obama supporter and lots of stimulus money.  (The Corporation is now headed by Alan Solomont, a philanthropist and Democratic fundraiser appointed by President Obama.)

Together, Brown and the top Corporation brass negotiated a deal.  Johnson and St. HOPE would pay back about half of the $850,000 in AmeriCorps grant money it had received, and the suspension against Johnson would be lifted.

Walpin was very unhappy.  First of all, he said it was a terrible deal for the U.S. government, because St. HOPE was essentially insolvent and would never pay the money back.  Second, he felt lifting Johnson’s suspension would dilute the effectiveness of future investigations; why should grant recipients worry about their misconduct if any sanctions can be so easily lifted?  In the end, Johnson was not suspended, not debarred, and was probably not going to pay the vast majority of the money back.

Hope and change!  It looks very suspicious.  The administration has overtly interfered with the IG in his investigation, and now has tried to fire him, apparently for reporting to Congress.  If so, then the White House has abused its power on behalf of a campaign contributor and political ally — an act that would make Richard Nixon blush. I doubt this Congress will hold Obama accountable for it, but kudos to Senator Grassley for not letting it go.


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