Friday, June 12, 2009

Gerald Walpin Fired by President Obama: Inspector General Walpin Fired

Barack Obama has fired another. Inspector General Gerald Walpin was fired by President Obama, effective in 30 days. Ongoing Updates at end of this article. New articles linked below. See update 11-10-09 below.

Inspector General Gerald Walpin
The Inspector General investigating AmeriCorps and other national service programs has been fired, and may have been fired for revealing misdeeds involving thousands of taxpayer dollars by an Obama supporter.

There's more: the way in which Obama handled the firing may have flown in the face of current law. Inspector General Gerald Walpin reported that Sacramento Mayor Kevin Johnson, an Obama supporter and former NBA Basketball star, and St. HOPE Academy, founder, a non-profit group, received hundreds of thousands of dollars in federal grants and used the monies illegally or in a wasteful and abusive manner. St. HOPE eventually repaid the government more than $400,000.00.
The IG found that Johnson, a former all-star point guard for the Phoenix Suns, had used AmeriCorps grants to pay volunteers to engage in school-board political activities, run personal errands for Johnson and even wash his car.
Then the drama began. In August 2008, the U.S. attorney's office said IG Walpin's "conclusions seemed overstated and did not accurately reflect all the information gathered for the investigation." The Attorney General said additional questions needed to be answered, and an audit needed to be done. Leading up to mayor elections, in which Johnson was seeking re-election, the AG informed the media that he was not planning to file charges based on Walpin's investigation. It really wasn't all that simple though. The AG's office said that in the case of St. HOPE Academy there was no fraud, but "a culture of sloppiness." The bargaining began - St. HOPE won by half, the American taxpayer lost by half:
The U.S. attorney's office reached a settlement that requires the St. HOPE Academy to repay nearly $424,000 — almost half of the $850,000 it received — in return for the government lifting its suspension on future grants.
So Obama fired Walpin. He sent a letter to Pelosi and Vice President Joe Biden saying:
It is vital that I have the fullest confidence in the appointees serving as inspectors general," Obama said in a letter Thursday to House Speaker Nancy Pelosi and Vice President Joe Biden, who also serves as president of the Senate. "That is no longer the case with regard to this inspector general.
Senator Charles Grassley (R-IA) wrote to President Obama asking for specific reasons for Walpin's firing and citing law that requires the president to provide specific reasons, "to ensure that inspectors general are not removed for political reasons." He also pointed out that that "there have been no negative findings against Mr. Walpin by the Integrity Committee of the Council of the Inspectors General on Integrity and Efficiency (CIGIE)...(information that the AP is making available in their reporting)
Grassley said Walpin had identified millions of dollars in AmeriCorps funds that were wasted or misspent and "it appears he has been doing a good job."
An answer to Grassley came from White House Counsel Gregory Craig:
We are aware of the circumstances leading to that referral and of Mr. Walpin's conduct throughout his tenure and can assure you that the president's decision was carefully considered," Craig wrote.
Byron York, writing for the Washington Examiner says the 30 day effective date given in Obama's letter is important:
The 30 day requirement is important because last year Congress passed the Inspectors General Reform Act, which was designed to strengthen protections for IGs, who have the responsibility of investigating allegations of waste, fraud and abuse within federal agencies, against interference by political appointees or the White House. Part of the Act was a requirement that the president give Congress 30 days' notice before dismissing an IG.
One of the co-sponsors of the Act was then-Sen. Barack Obama. The Act also requires the president to outline the cause for his decision to remove an IG. Beyond saying that he did not have the "fullest confidence" in Walpin, Obama gave no reason for his action. There are two big questions about the president's actions. One, why did he decide to fire Walpin? And two, did he abide by the law that he himself co-sponsored?
Sen. Grassley said that Walpin, through a phone call from the White House, was given one hour to resign or be fired. When Walpin asked why he was being fired, the response was  "it is just time to move on." Walpin refused to resign.

Grassley was upset about the "ultimatim" given to Walpin. York says Grassley believes the White House tried to get Walpin to resign rather than going through the 30-day process. As we see often with the Obama administration, there is a rush to do his bidding.

Obviously, I do not know the truth of Walpin's investigation, but it seems there are laws in place to require that Congress know the truth, as well as know the reasons why an administration may want to fire an Inspector General. It appears that Grassley will get nothing of substance for his request - just a more-or-less answer that the President knows best.

Gerald Walpin was appointed to the Office of the Inspector General by President George W. Bush in 2007. His writings have appeared in the Wall Street Journal - on universities taking federal dollars but denying military recruiters the same access to students granted to all other recruiters, and a similar article in the NY Daily News about Yale Law School.

Update from Byron York as of 1:55 pm EDT Friday 6-12-09: York says that Walpin's actions have now been referred to the ethics committee mentioned above for review by U.S. Attorney General Lawrence Brown. Brown expressed outrage that Walpin had talked to the press during the mayoral race involving Keven Johnson. Walpin came back with "a stinging response" saying that "several of Brown's points were flat-out wrong." Walpin did some accusing himself:
Walpin accused the U.S. attorney's office of undermining Walpin's attempt at "suspension and debarment" -- that is, from taking action that prevents an organization that has engaged in misconduct from receiving any other federal money.
According to Walpin, the U.S. attorney's office resisted efforts to get St. HOPE to repay the money. Even though AmeriCorps inspector general officials had found "six specific instances of diversion and misuse of [AmeriCorps] grant funds," and even though Kevin Johnson never "submitted a single fact to dispute those findings," the U.S. attorney, according to Walpin, insisted that the settlement agreement forbid suspension or debarment.
Further, according to Walpin, even with the settlement agreement as it now exists, there is little hope the government will ever get any of its money back. "As St. HOPE is insolvent, the absence of any obligation imposed on…[Kevin Johnson], and the absence of any guarantee or security to ensure payment, makes the settlement a farce," Walpin wrote.
"Mr. Brown knows," Walpin concluded, "that the settlement agreement was carefully drafted so that no obligation is imposed on Mr. Johnson to pay to [AmeriCorps] a single penny of the amount supposedly to be paid to [AmeriCorps] by St. HOPE."
Walpin's response has led congressional investigators to want to know more about Brown, the acting U.S. attorney. I referred to him earlier as a "Bush holdover." That's not entirely accurate. Brown is now the acting U.S. attorney, and he was in the office during the Bush years, but he is a career official, not a Bush appointee. In the days to come, congressional investigators will be weighing Brown's claims versus Walpin's. A lot is going on with the story, and it is happening very quickly.
Stay tuned.

Update: 11:30 pm CDT, 6-12-09: We had to know there is more. How about an ACORN investigation? Read it at And So I Go: Yesterday, Today and Tomorrow and a hat tip to Astute Bloggers (thank you!) NOTE: I'M STILL working to find sourcing on the ACORN connection.

Update: 10:12 am CDT, 6-14-09 - Source Youth Today: Re: Sacramento Mayor Kevin Johnson - Walpin also charged that Johnson and other officials paid two employees of St. HOPE with AmeriCorps funds for duties they did not perform, used the ameriCorps volunteers to engage in political activities in connection with a board of education election.
Johnson, who was elected mayor in November, was barred from receiving federal grant money - the most serious action that the agency can take again a person or program.
The IG audit found that the program misused virtually all its funds and did little of what was outlined in its grant proposal.
The agreement for St. HOPE to repay ONLY half of the $800,000 was part of a "settlement" reached by the U.S. attorney's office (Eric Holder).

Johnson was to pay a portion of the money, with St. HOPE paying the remainder over a 5 year period.

Note in the article above, Walpin said none of the money would be repaid because St. HOPE was "insolvent." He also said that Johnson did not have to repay anything.  

Walpin wrote a letter to Sen. Ed Kennedy objecting to the settlement arrangement, again reiterating that St. HOPE was insolvent.

Re: Michelle Obama: Inspector General Gerald Walpin's vacant office at the Corporation for National and Community Service (CNCS) is not the only vacant office. The offices of Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and now, Inspector General - all are vacant. CNCS is "charged" with increasing its capacity to 250,000 volunteers by 2017. "By then, the budget is expected to rise to nearly $6 billion annually, from $1.9 billion.
Some decisions about CNCS are being made by First Lady Michelle Obama, according to service advocates (who asked not to be named). Last week, Mrs. Obama announced that her chief of staff, Jackie Norris, would move to CNCS as a senior adviser. Officials said yesterday that Norris is scheduled to arrive on June 22.
AmeriCorp's largest program - The Teaching Fellows Program:
...in abeyance pending resolution of widespread problems identified in a recent audit. Although Walpin recommended that funding be curtailed and that previous funds (perhaps as much as $75 million) be repaid to the corporation, the corporation has said it will take no action on that matter.
Walpin concluded that nothing was being gained by the grants to CUNY and that the money was simply being used to subsidize an existing and funded program.
Here's more from another Youth Today article:
The nation's largest and most expensive AmeriCorps program - the Teaching Fellows project at the City University of New York - doesn't meet the essential AmeriCorps criterion of filling an "unmet" need and the federal government should halt the program and recover up to $75 million that has spent on the project over the past six years, a new audit report found.
But the Corporation for National and Community Services (CNCS) disagrees with the findings of its inspector general and says it won't ask for the money.
Citing President Barack Obama's admonition to "scour" federal budgets to determine if "taxpayers are getting their money's worth," Walpin, who was appointed by President George W. Bush, said in a strongly worded 17-page letter to the university and CNCS officials said that there was no "cause and effect" from the millions spent on the teaching fellows.
Michelle Malkin linked IG Walpin's "Audit Reports." Everything there is a pdf document. I opened the first on the list and here's a a sampling: In this case, Walpin audited an AmeriCorps Program. This one questioned
"education awards" in the amount of $6,976 for two members with insufficient hours and two missing member files
AND the $12,740 in administrative fees for a $6,976 grant. The documentation is very thorough - and this is just one report. I opened one other pdf: AmeriCorps Compilation of Findings, Reports Issued April 1, 2005 through December 31, 2007: Here are a few selected snippets:
Conclusion: We noted findings and questioned costs for member service hours and timekeeping issues for members and program staff. There were numerous instances where members received education awards even though they had not served the required number of hours. Conclusion: Auditors were unable to determine the allowable, allocable, or reasonableness of $7.7 million of claimed match costs.
I will be going through each of these audits and reporting back. Update 11:09 CDT - 06-14-09 - Jake Tapper has posted Walpin's own comments through email:
[to Norm Eisen, special counsel to the president for ethics and government reform when Eisen offered Walpin 1 hour to resign or be fired] - Walpin told Eisen that he took "this statutorily-mandated independence of my office very seriously, and, under the present circumstance, I simply cannot make a decision to respect or decline what you have said were the President's wishes within an hour or indeed any such short time."
More from Walpin to Eisen:
Congress intended the Inspector General of CNCS to have the utmost independence of judgment in his deliberations respecting the propriety of the agency's conduct and the actions of its officers. That is why the relevant statute provides that the President may remove the IG only if he supplies the Congress with a statement of his reasons - which is quite a different matter than executive branch officials who serve at his pleasure and can therefore be removed for any reason and without notification to Congress.
Walpin refused to resign and commented to Eisen that when Obama was presented with the facts laid out (above paragraph), Walpin hoped that the President would comply with statutory mandates.

Obama then issued a letter to Pelosi and Reid simply saying that he had lost confidence in Walpin, without any supporting facts for the reason for the firing.

Update 11-10-09:
Announced today that Gerald Walpin has been cleared of charges that he overstepped his authority in his investigation of AmeriCorps and Kevin Johnson. Read the story here.

Related and Background:

Schwarzenegger Involvement: Kevin Johnson Investigation by Gerald Walpin

U.S. Attorney Larry Brown and CnCS Displeasure with Walpin's Investigation

Gerald Walpin Firing Update: AmeriCorp $75 Million Misused: Michelle Obama Hires?  

Kevin Johnson - St. Hope Scandal: Rick Maya Resigns, Gerald Walpin Investigates

White House Charges Walpin Confused, Disoriented, Disruptive

Who is Sacramento Mayor Kevin Johnson - Walpin-Johnson Investigation

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