Motive in IG Walpin Firing? Larry Brown Curries Favor with Obama? Michelle Rhee Covers for Kevin Johnson?

Inspector General Gerald Walpin was fired by the White House for exposing the misuse of federal funds by AmeriCorps and former NBA star Kevin Johnson, currently the mayor of Sacramento, California. Today we learn one possible motive for instigating Walpin's removal.

Kevin Johnson and Michelle Rhee

The story has all the eye-popping details of a sensational National Enquirer story. Think John Edwards and his love child. The Walpin story has prestige: An honorable Inspector General doing his job spectacularly well. An acting U.S. Attorney, Larry Brown, looking for a presidential appointment, a famed NBA star, Kevin Johnson, just elected Mayor of Sacramento, California. Johnson's charity, St. HOPE Academy, AmeriCorps volunteers, $75 million in tainted federal funds, and the future chancellor of Washington, D.C. schools and St. HOPE Chairman of the Board, Michelle Rhee. Johnson and Rhee would soon be engaged. Then there are the three young school age girls who accused Kevin Johnson of inappropriate sexual behavior,  and the appearance, at least, that Michelle Rhee knew of the misused funds and the claims of the young girls.

Inspector General Gerald Walpin found that Kevin Johnson and AmeriCorps had spent $75 million in federal funds in inappropriate ways. Walpin's report to Congress also detailed the accusations of the three young women. Much has happened since the schizey hit the fan. Walpin has been cleared of all  the ethics charges that U.S. Attorney General Lawrence Brown tired to instigate,  including "overstepped authority." Walpin wants his job back and has sued.

Keep this in mind as the new part of this story evolves. Kevin Johnson and Barack Obama are tight. It is believed that Michelle O is tight with Michelle Rhee, the chancellor of Washington, D.C. schools. Michelle Rhee and Kevin Johnson are now engaged. Before the engagement, Rhee sat on the board of St. HOPE. A Washington, D.C. education blogger poses some problems and asks some questions:

...holding several, conflicting positions for one organization – Ms. Rhee’s titles at the St. Hope Charter Academy boggle the mind. 

Were all the positions paid positions? How did she perform the duties of board member and Chief Operating Officer at the same time? 

As president, Chief Operating Officer and Board Member at the same time? as President, COO, board member and a consultant for St. Hope on three projects, at the same time? 

Why, when  Rhee was apprised by St. Hope employee Jacqueline Wong-Hernandez about sexual misconduct allegations against Kevin Johnson by 3 Americorps teenage volunteers, did she not contact California State authorities she was obligated to do under California law?

As COO and President, not to mention those consulting positions, was Ms. Rhee aware of the misuse of Americorps funds and volunteers as outlined in the Investigative General’s report of August 2008?  

As one of the top three office holders of St. Hope it seems that either Ms. Rhee was aware and therefore particpated or that she was not aware and she was negligent in her duties or these positions were merely window dressing for her resume and padding for her bank account.

So Walpin's report was in. Kevin Johnson was soon to be sworn as Sacramento mayor and...there was a big problem. Johnson and his charity were under suspension from federal funds. This meant, as mayor, Johnson disqualified Sacramento from receiving a single penny from taxpayers.

So here is where it really gets interesting. Enter acting U.S. Attorney General Lawrence Brown. Brown wanted President Obama to appoint him as permanent Attorney General.  Brown stepped in, made a civil deal with Kevin Johnson to repay some of the funds - money that Walpin showed neither Johnson or his charity had available, that agreement lifted the ban on Sacramento's federal funding and Brown used his official letterhead to get Walpin investigated by the 'Integrity and Ethics" Counsel of Inspectors General.

Michelle Rhee didn't give up on Kevin - a few charges of inappropriate behavior with young woman? Not really important. She paid a visit to Gerald Walpin to plead Johnson's case, but Walpin's report remained unchanged.

From a Department of Justice document:

Acting United States Attorney Lawrence G. Brown announced today that St. HOPE Academy has agreed to pay $423,836.50 to settle allegations that St. HOPE did not appropriately spend AmeriCorps grant awards and education awards...The amount of the civil settlement represents one-half of the $847,673 in AmeriCorps grant funds received by St. HOPE Academy. 

“The agreement reached strikes a proper balance between accountability and finality. St. HOPE Academy must pay a significant amount for its improper handling of AmeriCorps funds. [Don't you love this one?]

St. HOPE will make an initial payment of $73,836.50 by electronic transfer within five business days from today;

Kevin Johnson will pay $72,836.50 of the initial payment by St. HOPE, with possible repayment to Johnson by St. HOPE when it is financially able to do so;

Dana Gonzalez will pay $1,000.00 of the initial payment by St. HOPE.

Johnson and Gonzalez shall each register to take an online course offered by Management Concepts titled “Cost Principles”;

For a quick read of the charges of sexual impropriety, read "G" here, or find more linked below.

Save a president's friend from public shame and you just might get a presidential appointment. 

The Washington Examiner published information today on Larry's Brown's ambitions for the presidential appointment to the U.S. Attorney's office:

In a January 5, 2009 letter to Democratic Sen. Dianne Feinstein, Brown's home-state senator and a senior member of the Senate Judiciary Committee, Brown wrote, "I write to express my interest in appointment as United States Attorney for the Eastern District of California" -- a presidentially-appointed position. In the letter, Brown took care to highlight his Democratic credentials.

"As this is a political appointment," Brown wrote: I will note that for the past two years, I have been registered as Decline to State. From 1988-2007, I was a registered Democrat and from 1982-1988, a Republican. As may be evident, I am not a rigid ideologue and discovered that I simply did not fit neatly within either party. I chose to ultimately become an independent because I felt that in my line of work, namely the administration of justice, neither party has a monopoly and its handiwork must be performed in non-partisan fashion. I count myself in the ranks of those who have grown weary of the overly-simplistic "red state/blue state" debates over complex issues and enthusiastically embrace President-elect Obama's call to abandon such labels and become the united states [sic] of America.

When Obama's White House counsel, Gregory Craig, fired Walpin, he used Brown's accusatory letter. There were also accusations of something like disorientation and maybe senility by the White House, which has since been shown to be unfounded.

Senator Charles Grassley has been on point on behalf of IG Walpin since the time of his firing, and Democrats have joined in as well. Grassley wanted Obama to follow proper procedure for firing an inspector general. The only procedure used was that the president said he had lost confidence in Walpin. That's not the way an IG should lose his/her job.

There is so much more to this story. It is full of corruption from the office of AmeriCorp right up to the White House. Johnson was accused of using AmeriCorps volunteers to drive him around, do personal errands...wash his car, etc. St. HOPE emails were intentionally deleted. If our political persuasion is Liberal, we can hush it by repaying in some way. 

In the end, Brown did not get his appointment, and he now sits on the Sacramento Superior Court. Kevin Johnson leads a magical life, one charity and several young girls left in the wake he makes, as he jets back and forth to see Rhee in Washington, D.C. An Inspector General who dared expose graft and corruption, especially with one of Obama's fondest volunteer organizations, AmeriCorps, is now out of the way. In the link second from the bottom below, you'll read how the White House directed another Inspector General to shred documents pertinent to Gerald Walpin's defense. Is this the White House you want? I didn't think so.

I have a lot of background reporting on this story. Links follow.

Michelle Rhee Covered up Kevin Johnson Sex Scandal?  

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

Who is Sacramento Mayor Kevin Johnson - Walpin-Johnson Investigation

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

Schwarzenegger Involvement: Kevin Johnson Investigation by Gerald Walpin

Glen Beck - Gerald Walpin Video: IG Gerald Walpin on Glen Beck

White House Charges Walpin Confused, Disoriented, Disruptive

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

Gerald Walpin Fired by President Obama: Inspector General Walpin Fired

Kenneth Bach Shreds Gerald Walpin Documents

Former AG Michael Mukasey says Walpin was fired illegally 

Arnold Schwartzenegger IRS Lein: Schwartzenegger Gerald Walpin Connection?

Back in June I asked why Inspector General Gerald Walpin launched an investigation into former NBA star and current Sacramento, California Mayor, Kevin Johnson. The answer to that question is that Schwarzenegger asked the feds to look into Johnson's non-profit St. Hope Academy, and Walpin got the assignment. Walpin's investigation showed that both Kevin Johnson and AmeriCorp had misused millions in federal funds - and worse, that Johnson was charged with inappropriate behavior by teenagers. The Governor's action was prompted by a report from the Sacramento County Child Protective Services. President Obama has a particular fondness for AmeriCorp and Kevin Johnson. Subsequently, after Walpin submitted his report to Congress, he was fired from his Inspector General position in an unprecedented move by the White House.

Arnold Schwarzenegger

This week, we learned that the IRS filed a federal tax lien against all of Governor Schwarzenegger's properties last May. Could this be payback for Schwarzenegger's involvement in what has turned out to be another enormously embarrassing scandal for this administration? The odd thing about this, is supposedly, Schwarzenegger had received no notices that anything was amiss with this tax filings.

This report says:

...a copy of a lien document that says it is from the county recorder's office. That document shows that Schwarzenegger owes $39,047.20 from 2004 and $40,016.80 from 2005. The document also lists a section of the IRS code that suggests the debt may be penalties for a failure to report certain business transactions.

The Governor's office says:

No one, including the IRS, has notified the governor of any issues whatsoever with his taxes," McLear said. "We are contacting the IRS to determine if the document in question, which appears to be a penalty for missing info and not for unpaid taxes, is legitimate and if there is any discrepancy to resolve."

A few hours later, Schwarzenegger's office said they had talked to the IRS and there was a "mix-up."

The issue is completely unrelated to the payment of taxes," Schwarzenegger spokesman Aaron McLear said in a statement. "The matter will be resolved and the lien expunged without any penalty assessed upon the governor."

An IRS spokesman said whatever document was filed on the Governor would have to speak for itself - the IRS "does not comment on individual cases."

According to a code on the lien -- 6721 -- there were problems with so-called "information returns" submitted by the governor. Businesses and individuals are required to file such returns, including W-2s and 1099s, to document any payments made to employees or vendors over a calendar year.

Jeffrey Kahn, a Bay Area tax attorney consulted by the Mercury News, said liens filed under that code often involve insufficient reporting of payroll taxes, which are withheld from employees' paychecks to fund Social Security, MediCare and unemployment insurance.

Libertarian Advocate is also questioning IRS motives.

Related and Background:

Who is Sacramento Mayor Kevin Johnson?

Gerald Walpin Documents: White House Documents and Gerald Walpin

New documents have been released on the firing of Inspector General Gerald Walpin by the Obama White House. This is a long and convoluted story, and I have linked to all the relevant background at the bottom of this article.

Gerald Walpin

Here's the short story before the new information below:

(1) Inspectors General work independently from the White House and can only be fired after certain Senate-mandated procedures are followed. The Obama White House ignored those procedures.

(2) Gerald Walpin's investigation into AmeriCorp found $75 million misused by the organization.

(3) Gerald Walpin's investigation found that AmeriCorp had allowed former NBA star and current Mayor of Sacramento, Kevin Johnson to divert funds from AmeriCorp for his own personal use. Johnson was the founder of the St. Hope Academy, a non-profit organization, and further found that Mr. Johnson was accused of inappropriate behavior with three young girls. Last week, it was revealed by a former St. Hope employee that Michelle Rhee, the current Chancellor of the Washington, D.C. schools, served on the board of St. Hope. When one of the girls made accusations against Johnson, Rhee allegedly told the employee she "would take care of it." Rhee and Johnson are recently engaged to be married. And, of course, Kevin Johnson is said to be personal friends with Obama and a donor.

Here's the latest from Byron York at the Washington Examiner:

Pressed for the reason Walpin was fired, Eisen [special counsel]  told House and Senate aides that the White House conducted an "extensive review" of complaints about Walpin’s performance before deciding to dismiss him.  According to the new report, Eisen told Congress that "his investigation into the merits of removing Gerald Walpin involved contacting members of the Corporation for National and Community Service [CNCS] board to confirm the existence of a 'consensus' in favor of removal." But Republican investigators later discovered that during that "extensive review," the White House did not even seek the views of the corporation's board -- the very people whose "consensus" purportedly led to Walpin's firing.

Other than board chairman Alan Solomont, the Democratic mega-donor and Obama supporter who originally told the White House of his dissatisfaction with Walpin, "no member of the CNCS board had any substantive input about whether the removal of Gerald Walpin was appropriate," according to the report. Only one other board member, vice-chairman Stephen Goldsmith, was even called by the White House, and that was on June 10, a few hours before Walpin was fired.  According to the report, Goldsmith told investigators that "the White House had already decided to remove Walpin and wanted to confirm [Goldsmith's] support for the action."

The new documents show the White House scrambling, in the days after the controversy erupted, to put together a public explanation for the firing. On June 11, less than 24 hours after Walpin received the call from Eisen, the board held a conference call.  The next day, Ranit Schmelzer, who is part of the corporation's press office, sent an email to board members giving them talking points to use if contacted by reporters seeking information about the matter.

"Indicate that you support the president's decision to remove IG Walpin," was Schmelzer's first instruction to the board.  Then: "If asked why he was removed, indicate that the president lost confidence in Mr. Walpin."  And then: "If the reporter continues to press, say that you can't get into details on a personnel matter, but you understand there were some performance-based issues." Finally, Schmelzer advised the board to avoid "getting into any specifics about IG Walpin's performance-based issues.  The WH has stayed away from this and has counseled us to do the same."

Senator Charles Grassley (R-IA) and Rep Darrell Issa (R-CA) have been on this from the beginning and are determined to see that the integrity of the Inspectors General program does not become a political puppet. Read York's entire story here.

Related and Background:

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

Who is Sacramento Mayor Kevin Johnson - Walpin-Johnson Investigation

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

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

Gerald Walpin Fired by President Obama: Inspector General Walpin Fired

Kenneth Bach Shreds Gerald Walpin Documents

Former AG Michael Mukasey says Walpin was fired illegally

Kenneth Bach Shreds Gerald Walpin Documents: AmeriCorps IG Kenneth Bach Shreds WH Evidence

Gerald Walpin was the Inspector General (IG) for AmeriCorps. He believes he was fired by the White House (WH) for an incriminating report on AmeriCorp showing the abuse of $75 million dollars of taxpayer monies. Walpin is suing to get his job back, but evidently, documents perhaps pertaining to his case have been shredded at the request of the White House, by the very man who replaced him.

White House

According to Salisbury News:

The acting inspector general of AmeriCorps said he shredded White House documents at the request of an agency press spokeswoman that pertained to the controversial firing of the previous inspector general, Gerald Walpin, who was ousted after investigating a political ally of President Obama.

 The email obtained by CNSNews through Freedom of Information ACT (FOIA):

The e-mail message from agency spokeswoman Ranit Schmelzer seemed urgent, as she wrote: “WH documents were sent in error. Can you please destroy them? And can you confirm you receive this e-mail?” Acting IG Kenneth Bach responded 13 minutes later writing, “Confirmed, documents were shredded.”...

The documents referenced in the Bach-Schmelzer email exchange included a draft of a letter to be signed by President Obama that would be sent to House Speaker Nancy Pelosi (D-Calif.) to inform her that Obama was firing Gerald Walpin as inspector general for the Corporation for National and Community Service (CNCS), which runs AmeriCorps, and also a set of talking points to be used in explaining to the media why Walpin was being fired.

When an Inspector General is fired, there is a procedure for doing so, none of which those sympathetic to Gerald Walpin believe, happened, including Senator Chuck Grassley (R-IA). To date, President Obama has only said that he "lost confidence" in Walpin.

Not only did Walpin expose fraud at AmeriCorps, he also exposed a politician - a friend of Barack and Michelle Obama, who misused charitable funds. The politician is former NBA star and current Mayor of Sacramento, California Kevin Johnson. Johnson's past is fraught with scandal - inappropriate touching of at least one minor, recruiting AmeriCorps personnel to work in his own non-profit, St. Hope Academy, and to work for him personally. Walpin's report charged that the supplemented St. Hope salaries by "converting" AmeriCorp grant funds and more.

So let's take a look at Kevin Johnson, and keep in mind that Walpin's investigation was correct and it is documented that Johnson misused federal funds, at times for his personal benefit. That fact is not being disputed by anyone.

Read Who is Sacramento Mayor Kevin Johnson?

Walpin, who has been exonerated from any wrong doing says such a request from an "agency spokeswoman" is "shocking," as well as acting Inspector General Kenneth Bach's compliance.

Related and Background:

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


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

Who is Sacramento Mayor Kevin Johnson - Walpin-Johnson Investigation

Schwarzenegger Involvement: Kevin Johnson Investigation by Gerald Walpin

Gerald Walpin Fired by President Obama: Inspector General Walpin Fired
 
Gerald Walpin Firing Update: AmeriCorp $75 million Misused: Michelle Obama Hires?
 
Glen Beck - Gerald Walpin Video: IG Gerald Walpin on Glen Beck
 
White House Charges Walpin Confused Disoriented Disruptive

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

One of the issues concerning Gerald Walpin's firing that is not being discussed much, is the displeasure of acting U.S. Attorney General Lawrence Brown with Walpin. Another not being discussed at all, is why the CNCS board turned hostile toward an investigation CNCS had tasked Walpin with, via Governor Arnold Schwarzenegger. See update 11-10-09 below.

Lawrence G. Brown

Acting Attorney General Lawrence G. Brown sent a letter to the "Integrity and Ethics" Counsel of Inspectors General, asking that Walpin be scrutinized for an ethics breach in the investigation of Kevin Johnson, Sacrament0 Mayor, and of course, former NBA "star."
At this point, the investigation had been completed.

Here are Brown's concerns about Walpin:

1) Walpin was not authorized to recommend Suspension and Debarment for Kevin Johnson and Dana Gonzalez - overstepping his authority.

2) Walpin's report and his conclusions seemed overstated and not reflective of the investigation

3) Walpin released information to the press that the case was being referred to the U.S. Attorney's office for a decision on whether to prosecute criminally or civilly, before notifying Brown's office. Brown asserts that he learned about it through the Sacramento Bee and not through proper channels.

4) Walpin withheld information from the U.S. Attorney's office.

5) Walpin did not achieve a "settlement agreement" quickly enough to allow Johnson to be released from the Suspension upon becoming Sacramento's Mayor.

The Sacramento Bee was calling for a quick resolution because it was believed that the City of Sacramento could not receive federal funds if their Mayor was under suspension. Brown wrote the letter to the Ethics Committee on April 29, 2009. You can read Brown's letter here.

Gerald Walpin responded with an 18 page letter [undated from what I can see]. You can read Walpin's letter here. Because he answers every accusation by Brown in detail, I cannot easily put it down in a bulleted list. I've outlined what I see as the pertinent points dispelling Brown's claims. This is important because after Walpin was fired, reports were everywhere that he mishandled the investigation of Kevin Johnson? But did he?

We have an acting U.S. Attorney General making the charge. How does Walpin fight back against that? Maybe his 18-page response "to the complaint" shows another side, and in fact, it does - if the media would just report it.

Here are snippets of Walpin's counter:  

About overstepping his authority: Walpin said it is his job to forward an investigation to the U.S. Attorney when he believes it may merit criminal or civil prosecution. He explained to Brown that the difference between "grant fraud" and the "contract fraud" that U.S. Attorney's offices are more familiar with, is an important difference. Walpin said I:

...quoted one of "Mr. Brown's ultimate supervisors, the Deputy Attorney General in emphasizing the importance of prosecuting "grant fraud," and support of "an energized and empowered IG community working in tandem with...Federal prosecutors" to achieve that end.

Walpin pointed out his procedure for submitting the case to the U.S. Attorney General was the same procedure his predecessors used:

I am informed that it has been the custom in my office, before I commenced as IG, to send a referral with such a covering letter. Aside from personally communicating the seriousness of the OIG’s decision to make the referral, it serves as an Executive Summary of the referral, which here was 33 pages long.

Most United States Attorney’s offices to which I have forwarded referrals with such an “executive summary” cover letter, always containing my explanation of why I believed the conduct warranted prosecutorial action, have expressed appreciation for such explanations and summaries.

Indeed, when I, together with Supervisory Special Agent (“SSA”) Morales and Special Agent Wingers, met with Mr. Brown and several of his fellow Assistant U.S. Attorneys, on August 25, 2008, they complimented us on our referral and the personal interest we took in it by traveling to California to meet with them.

Walpin responded that Mr. Brown's view that an IG has no further role is wrong:

The Senate Report, explaining the purpose of the Inspector General Act of 1978, specifies that the IG has the duty to “[a]ssume a leadership role in any and all activities which he deems useful to promote economy and efficiency in the administration of programs and operations or prevent and detect . . .waste in such programs and operations.” S. Rep. No. 95-1071, at 27 (1978), reprinted in 1978 U.S.C.C.A.N. 2676, 2702 (emphasis added).

Mr. Brown’s misunderstanding of the proper role of the IG is further shown in his assertion that the IG is the “investigative arm of the CNCS Agency.” The IG is statutorily made independent of the CNCS Agency, with responsibility to oversee and criticize what CNCS is doing if the IG believes that the agency is thereby wasting Federal funds -- including the waste of the right to recovery Federal funds from a grantee that misused Federal funds granted to it.

Of Brown's assertion that the IG "is not intended to act as an advocate for suspension or debarment," Walpin responds:

...the procedure exists to protect all Federal funds by denying new funds to an individual or entity who/which has shown by uncovered facts not to be trustworthy or responsible in the prior use of Federal funds....For the Suspension and Debarment procedure to work to protect Federal funds, the investigative agency, upon determining that the facts it uncovered warrant suspension, must make a recommendation of suspension to the agency's Suspension and Debarment official. That is exactly what OIG did here.

Walpin's response on When and How Mr. Brown Learned of the Suspension Recommendation:

Brown not only knew "long before" he says he knew, but "he and his office assisted OIG in its suspension recommendation by submitting a letter, requested by the Suspension and Debarment Official as needed before that official would issue the Suspension order.

Mr. Brown’s assertion of lack of advance knowledge and surprise at the suspension procedure is clearly without factual basis.

There's far more on Brown's alleged surprise notification in the letter on pages 4-6.  

Walpin's response on The Propriety of the OIG Press Release: The Sacramento Bee, on September 24, 2008 and it's morning edition on September 25th, reported "its own discovery of the names of suspended parties" from a list that the General Services Administration (GSA) maintains.

He says the OIG issued no press release on that date, as Brown accused. After The Bee's initial article was published, Walpin says the OIG issued a press release on September 25, 2008. In that press release, Walpin says he "largely repeated the grounds for suspension set out in the Notice of Suspension, issued by the Corporation's Suspension and Debarment Official and publicly posted on the GSA website.  

It's important to note that before the idea of firing Gerald Walpin became the thing to do, the corporation, CNCS, issued the Notice of Suspension of Kevin Johnson. Perhaps CSNC didn't know that their soon-to-be-President Obama would not be happy with their actions.

Walpin responds to The OIG Investigators' Alleged Withholding of Information From the U.S. Attorney's Office:

Brown said that Walpin held back a letter from an elementary school principal (Herinder Pegany) where the principal claimed that "St. HOPE AmeriCorps members had performed after-school tutoring at his school." Walton said the letter actually said that the principal "knew that members were assigned to his school to conduct tutoring," but "he did not know how many members were assigned to his school...because he did not directly supervise the members." The point, said Walton, was not whether or not AmeriCorps members had been assigned to the school, but if in fact, they had "performed such tutoring." That fact was not established through the Principal's testimony because he said he had "no personal knowledge" of such tutoring.

Simply put, OIG does not provide to U.S. Attorney’s office all documents prepared as memoranda of work done during an investigation (and OIG’s Special Agents so informed Mr. Brown when they met with him), but rather all documents which provide usable evidence, whether probative of guilt or innocence. Particularly given the lack of personal knowledge provided by Mr. Pegany, I fully understand, as I previously told Mr. Brown, the good faith judgment call made by these two experienced Agents not to include that memorandum in the referral to the United States Attorney’s office. That decision certainly does not warrant the charge against them of any intent to conceal.

Brown asserted that Walpin "misled" his office through a heading in OIG's referral letter, titled "AmeriCorps Members Performed No Tutoring." Walpin says below that heading was the explanation that substantiated interviews with staff. Brown's assertion that in the August 25th meeting he and his staff "expressed [their] concern that the Walpin's report conclusions "seemed overstated...."

What Mr. Brown and his colleagues said was that they would be studying all of the files that OIG had provided to see if criminal intent and knowledge could be established for a criminal prosecution; they never expressed any concern concerning the existence of a viable civil case.

Regarding the charge that Walpin failed to conduct an audit:

OIG then responded that an audit was neither feasible nor needed, and is not used in many investigations. OIG explained that the allegations in this case involved misuse of AmeriCorps members, and not to missing or misused funds, making an audit not warranted.

However, on September 11th, Assistant U.S. Attorney Newman asked OIG to prepare a report on St. HOPE's financial records to determine the extent of St. HOPE's liability to return any or all of the grant funds that it had received." At this time, a subpoena was served on October 1, 2008 on St. HOPE. As late as January 22, 2009 only partial information had been provided. Repeated letters to St. HOPE and St. HOPE's attorney on non-compliance were issued.

Yet, the U.S. Attorney's office took no action to enforce the subpoena.

On February 4, 2009, additional documents were provided, and AUSA Newman advised that OIG auditors "should base their report on the documents" available, "even though a big void in the required documents remained." Missing were:

“Source documentation for costs charged to the grant; complete general ledger (only a partial ledger was produced); reconciliation of costs charged on the Financial Status report to the general ledger, including match funds; explanation of the methodology for allocating costs between match and federal share; [and] identification of the accounting system used.” In other words, there were gaping holes in the documentation. But to demonstrate OIG’s cooperation with the USA’s office, OIG's audit staff prepared its report.

The conclusion:

The report’s conclusion was straight forward:

None of the costs charged to the grant are allowable, primarily because the AmeriCorps members’ service activities were not consistent with the grant requirements. Contrary to . . . grant requirements and prohibitions, we found that St. HOPE AmeriCorps members performed little, if any, of the service agreed to and stipulated under the grant. Instead, they were used for non-authorized and prohibited activities, including services that displaced St. HOPE employees, a violation of 42 U.S.C. § 12637 Non duplication and Non displacement. We also found instances where AmeriCorps living allowances and benefits were unlawfully used to supplement the salaries of St. HOPE employees. Another grant requirement is that all allowable cost must be adequately documented. . . . . We found an almost total lack of documentation to support St. HOPE’s performance of the grant, despite our repeated requests to St. HOPE for grant-related documents.

After the U.S. Attorney General's office asked for an audit, and after a subpoena was largely ignored by Kevin Johnson, the Attorney General's office refused to enforce the subpoena. Note also that Executive Director of Kevin Johnson's St. HOPE Academy, Rick Maya, resigned due to misconduct by Kevin Johnson.

Maya claims that another board member deleted Kevin Johnson's emails during the federal investigation that Walpin was conducting. This article details 9 reasons for Maya's resignation. It's astounding. I hope you'll read it.

At the time of Walpin's firing he had also completed an investigation into City University of New York (CUNY), AmeriCorps largest program. Walpin said neither the CUNY report or the Kevin Johnson-St. HOPE Academy investigation were "well-received by top CNCS management." So what changed at CNCS, because after all, the investigation came at the request of Governor Arnold Schwarzenegger:

A Sacramento-based nonprofit run by former NBA star and Sacramento mayoral candidate Kevin Johnson is facing scrutiny after a teenager complained of inappropriate touching by Johnson.

Gov. Arnold Schwarzenegger’s office asked the federal government to investigate because the nonprofit, St. HOPE, has received money in the past from the federal AmeriCorps program.

One thing changed. Barack Obama was elected President and we know he has big plans for AmeriCorp. How can you achieve the huge expansion he has in mind, with millions, probably billions in federal funds funneled to them, with a-Gerald-Walpin reporting some nasty theft of taxpayer dollars?

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
Michelle Malkin has news of The First Lady's coming speech at CNCS
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

Schwarzenegger Involvement: Kevin Johnson Investigation by Gerald Walpin

An important question lingered. Who at the Corporation for National and Community Service (CNCS) asked Inspector Gerald Walpin to investigate Kevin Johnson and St. HOPE in the first place? - and why? And why hasn't this question been investigated? Maybe because there is a need to make it appear that Walpin was on a witch hunt, but the request came from Governor Arnold Schwarzenegger. He asked the "federal government" to investigate Johnson. Did the "federal government" mean a U.S. Attorney, or the federal agency, CNCS, the corporation that administers AmeriCorps? Whichever, AmeriCorps then turned the Kevin Johnson investigation over to Gerald Walpin. See update 11-10-09 below.

Arnold Schwarzenegger

What was known even before Gerald Walpin became involved? Here's the answer: (The Sacramento Union, dated May 1, 2008):

A Sacramento-based nonprofit run by former NBA star and Sacramento mayoral candidate Kevin Johnson is facing scrutiny after a teenager complained of inappropriate touching by Johnson.

Gov. Arnold Schwarzenegger’s office asked the federal government to investigate because the nonprofit, St. HOPE, has received money in the past from the federal AmeriCorps program.

The governor’s California Volunteers office administers AmeriCorps money coming to the state and is required to report such allegations.

Marta Bortner, a spokeswoman for the state volunteer office, says the request was made to the AmeriCorps inspector general last week. It was triggered by a report filed a year ago with Sacramento County Child Protective Services.

So Walpin investigated at the request of AmeriCorps via Schwarzenegger, and the investigation began with a sexual abuse allegation into Johnson, who founded St. HOPE Academy, an AmeriCorp recipient.

As the investigation progressed and unearthed misuse of federal monies, AmeriCorp and CNCS didn't like the results. Perhaps a President Barack Obama was only a distant possibility in the Spring of 2008.

Who knew what was coming? Who knew that soon-to-be president, Barack Obama, planned a "civilian national security force that's just as powerful, just as strong, just as well-funded" as our military.

Who knew that Michelle Obama would be instrumental in who CNCS brought on staff? Who knew that Barack Obama planned to make AmeriCorps a "cause" of his presidency.

Let's get it straight about who employed Gerald Walpin during the time of his investigations. He worked for a the CNCS which is a federal agency. Congress has established rules to protect the sanctity of all Inspector Generals to protect them from political motivation. Here is how Walpin explained his position to another CNCS division, Learn and Serve America grantees, October 23, 2008.

Finally, you should know that there are Inspectors General working at every Federal agency under a system established by Congress in 1978 under the Inspector General Act. I’m a presidential appointee and I was confirmed by the U.S. Senate. I serve at the pleasure of President Bush. Only the president, not the head of the agency my office oversees, can remove me from office. And even the President’s power to remove me is subject to the transparency requirement that he must explain to Congress his reason for doing so. This system guarantees my independence.

In 2007 when Walpin was confirmed by the Senate to the Inspector General position, David Eisner, a former AOL executive, was the CNCS CEO. CNCS, with a big red tab "About AmeriCorps" on it's homepage, announced Walpin's confirmation and extolled his accomplishments:

For over 40 years, Walpin was a partner with the New York City law firm Katten Muchin and Rosenman LLP, chairing the firm’s litigation department, and is now Counsel to that firm. His practice included the determination of the existence of fraud within corporations, and recoveries resulting from such fraud. Before his private practice, he was law secretary to two Federal District Court Judges, served in the United States Air Force J.A.G., and was the Chief of Special Prosecutions for the United States Attorney in the Southern District of New York.

He also served as President of the Federal Bar Council, the bar association of attorneys practicing in the Second Circuit Federal Courts, from 2002 to 2004. He received a bachelor’s degree from City College of New York and graduated cum laude from Yale Law School.

The numerous recognitions of Walpin’s legal expertise include the American Inns of Court Professionalism Award, which was presented by Supreme Court Justices Ruth Bader Ginsberg and Stephen Breyer and Court of Appeals Chief Judge John Walker during the 2003 Second Circuit Judicial Conference for outstanding professionalism as an attorney and mentoring of young lawyers. He is a frequent lecturer and writer on legal topics.

In addition to his professional accomplishments, he has received numerous awards for his charitable and philanthropic activities.

The CNCS administers many organizations, including AmeriCorps, which is actually a "division" of CNCS. In this case, AmeriCorps is definitely a part of the story of Gerald Walpin, and Kevin Johnson is central to why the investigation began in the first place, and I think, why Walpin was fired.

The Obama administration is in the midst of discrediting former Inspector General Gerald Walpin in a particularly egregious manner, with the attempt to show him as senile or some version of senile, although they have not used those words.

The claim is he was "confused and disoriented" during a May 20th CNCS board meeting. Walpin said the Board called for a break in the middle of his testimony. He left the room and when he returned, his report had become "disorganized," intimating, I think, that someone jumbled or shuffled his report.

As you read through the squeals from the White House and the charge from acting U.S. Attorney Brown saying Walpin handled his reports incorrectly, especially when he "recommended" that Kevin Johnson no longer be able to get his hands on federal funds, Gerald Walpin answered that charge in full, and remember that the CNCS was still Walpin's employer when his report was turned over the U.S. Attorney's office.

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.

Background below on Walpin firing, and former NBA start and current Sacramento Mayor, Kevin Johnson's illegal misuse of federal taxpayer money, as well as misuse of AmeriCorps volunteers:

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

Gerald Walpin Firing Update: AmeriCorp $75 Million Musused: 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