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Corruption, Sleaze, Skullduggery, the Swamp, and Treason

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Glenn Beck has done some good work bringing attention to this case:


Today the WSJ jumps in:

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.

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.

Krauthammer was right in noting that Fox news is a fantastic outlet that is the only major source of news that is not corrupted with the MSM bias.  A few city newspapers, and talk radio and that is it.
That God (or Murdoch) for Fox.  I don't know how I could stand watching all the propaganda from the other outlets.  CNN is at least reeanable but the rest are all NYT style propaganda.

The Obama Administration's fast-track sale of bankrupt auto-parts supplier Delphi hit a speed bump late last week when Judge Robert Drain ordered that Delphi conduct an open auction for its assets. That has a number of distressed-debt investors circling. It may also mean that the public will get some answers about the curiously structured sale that GM had quietly put forward the same day it filed for bankruptcy protection itself.

Under that deal, a bankrupt GM -- which is to say, taxpayers -- was set to provide most of the funding for Delphi's exit from bankruptcy, with private-equity firm Platinum Equity throwing in some cash and getting a sizable equity stake in return. The investors who have so far provided most of the debtor-in-possession (DIP) financing during Delphi's four-year bankruptcy case would have gotten as little as 20 cents on the dollar -- almost unheard-of in bankruptcy cases.

Those investors cried foul, pointing out that DIP financers generally have the right to take control of the company if they can't be paid in full. GM and the government at first threatened to play hardball, claiming that Platinum was the only buyer acceptable to GM and so its deal was the only one on the table. Judge Drain wasn't buying it, however. "I don't know what makes Platinum acceptable to GM and why Platinum is unique," he said. "Unless I hear more, there's something going on here that doesn't to me make sense."

That's putting it mildly. When the government arranged the Chrysler and GM bankruptcies, it noted with some justification that, as the DIP financer for the cases, it had wide latitude to determine the companies' fates and ownership structure. But when it comes to Delphi's private DIP lenders, it has taken a very different position, apparently in the interests of wrapping up Delphi's case as quickly as possible to speed GM's own exit from bankruptcy. Taxpayers and investors alike deserve to know more about what looks like a sweetheart deal for one favored group of investors, and Judge Drain deserves kudos for putting on the brakes.

Will Democrats cover up the AmeriCorps mess?

By: Byron York
Chief Political Correspondent
06/16/09 12:13 AM EDT

Can Republicans in Congress get to the bottom of President Obama's sudden -- and suspicious -- decision to fire AmeriCorps inspector general Gerald Walpin? The answer is no -- unless some. Democrats show interest in what could possibly be the first scandal, or at least mini-scandal, of the Obama administration.

In dismissing Walpin, the president seemed to trample on the law -- a law he himself had co-sponsored as a senator -- that protects inspectors general from political influence and retribution. In addition, it appears that at least part of the reason Walpin was fired was for the tenacity he showed in investigating misuse of AmeriCorps money by a friend and supporter of the president, Kevin Johnson, the mayor of Sacramento, California. Walpin got the goods -- evidence of Johnson's serious misuse of federal dollars -- and the inspector general ended up getting fired for his troubles.

So the Walpin case is just the kind of thing the watchdogs of good government in the House and Senate might investigate. But Democrats enjoy solid majorities in both houses, and thus control what will be investigated, and how any investigation will proceed. As the minority party, Republicans have little power to do anything.

"We can't move something through a committee," says one Republican Senate aide. "We can't issue a subpoena. But we can write letters, and we can jump up and down."

That's pretty much what Republicans are reduced to doing now. They are asking the administration for information -- politely -- and are trying to get the message out through the press. That's all they can do.

They're not particularly optimistic about getting help from the other side. Would Majority Leader Harry Reid really have any interest in a tough probe of a Democratic White House, a Democratic AmeriCorps, and a Democratic mayor who just happens to be a friend of the president?

The committee that would normally be expected to look into the matter would be the Senate Health, Education, Labor and Pensions Committee, which oversees AmeriCorps. But the chairman is Sen. Edward Kennedy, who in April joined President Obama to celebrate the passage of the $5.7 billion Edward M. Kennedy Serve America Act, which will triple the size of AmeriCorps. Kennedy is highly unlikely to support an investigation that might tarnish his favorite program.

Inspectors general as a whole are watched over by the Homeland Security and Government Affairs Committee, headed by Sen. Joseph Lieberman. Some Republicans hope -- a little -- that Lieberman will lend a hand, but they're not holding their breath.

The one lawmaker who has shown real interest in investigating the AmeriCorps matter is Iowa Republican Sen. Charles Grassley. Throughout his career, Grassley has been something of a guardian angel for inspectors general, and he was on the Walpin case from the very beginning.

But Grassley is not just a Republican, he's also on the Senate Finance Committee, which really doesn't have much jurisdiction over this particular matter. So he did what Republicans can do -- he wrote a letter, to Alan Solomont, the former Democratic fundraiser who now heads AmeriCorps.

"It is vital that Congress obtain a full understanding of the role that you and your colleagues&hellipplayed in these matters," Grassley wrote. "Inspectors General have a statutory duty to report to Congress. Intimidation or retaliation against those who freely communicate their concerns to members of the House and Senate cannot be tolerated. This is especially true when such concerns are as legitimate and meritorious as Mr. Walpin’s appear to be."

Grassley asked AmeriCorps to hand over all records and e-mails and documents and other information about the Walpin firing. But if Grassley is the only one doing the asking, the administration doesn't really have to comply.

In 1993, just after Bill Clinton was elected and Democrats controlled both the House and Senate, a lone Republican congressman, Rep. Bill Clinger, wanted to investigate the suspicious firings of the White House Travel Office staff.

But majority Democrats had no inclination to pursue the matter. Clinger tried and tried, wrote letter after letter, and jumped up and down, but he didn't begin to get results until after November 1994, when Republicans took control of both Houses of Congress.

When it comes to investigating allegations of wrongdoing, Republicans today are right back where they were in 1993.

Byron York, The Examiner’s chief political correspondent, can be contacted at byork@washingtonexaminer.com. His column appears on Tuesday and Friday, and his stories and blog posts can be read daily at ExaminerPolitics.com.


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AmeriCorps feared bad press if IG investigation continued
Chief Political Correspondent
06/24/09 5:42 AM EDT
One of the mysteries surrounding President Obama's firing of AmeriCorps inspector general Gerald Walpin is what prompted the White House, supported by the board of directors of the Corporation for National and Community Service, which oversees AmeriCorps, to try to get rid of Walpin so quickly and quietly?

On the evening of Wednesday, June 10, an official of the White House counsel's office called Walpin to tell him he had one hour to resign or be fired.  The action flew in the face of a law (sponsored by Barack Obama when he was a senator) that requires the president to give Congress 30 days' notice, plus cause, when he intends to fire an IG.  In this case, the White House apparently wanted to dispatch Walpin quickly by pushing him to resign, which would not have required the president to go through the congressional notification process.  Instead, Walpin refused to quit, and only then did the White House tell Congress.

Why the rush?  Walpin had certainly displeased the board by his aggressive investigation into the misuse of AmeriCorps funds by Kevin Johnson, the former NBA star who is now mayor of Sacramento, California and a prominent supporter of President Obama.  Prior to his election as mayor, Johnson ran an educational organization called St. HOPE, which received $850,000 in AmeriCorps money.  Walpin discovered that Johnson and St. HOPE had failed to use the federal money for the purposes specified in the grant and had also used federally-funded AmeriCorps staff for, among other things, "driving [Johnson] to personal appointments, washing his car, and running personal errands."

Walpin recommended that Johnson be banned from ever receiving any more federal funds.  But after the passage of the $787 billion stimulus bill, amid worries that such a ban on the mayor would keep Sacramento from receiving its share of the stimulus cash, the board of the Corporation for National and Community Service reached an agreement with the acting U.S. attorney in Sacramento under which Johnson would repay some of the mis-spent money and also be eligible to receive new federal grants in the future.  Walpin strongly objected to the agreement.  (Knowing his opposition, the board excluded him from the negotiations.) 

Walpin's objections were the subject of a now-controversial May 20 meeting in which Walpin, to use his term, "lectured" the board on what he believed was its mistake in approving the Johnson settlement.  On the morning of the meeting, the Sacramento Bee reported that a man named Rick Maya, who worked with Kevin Johnson in the St. HOPE project, claimed that Johnson's emails had been deleted during the time of Walpin's investigation.  The Maya news suggested that there might have been obstruction of justice in the St. HOPE affair, and Walpin used it to drive home his point that the board should have let his investigation stand.

It appears the discussion of the St. HOPE matter was a turning point not only in the May 20 meeting but in Walpin's tenure at the Corporation.  In a recent interview, a Republican member of the Corporation board told me that Walpin told board members at the meeting that he wanted to issue some sort of public statement to the effect that there should be more investigation of the St. HOPE matter.  "He said, 'I feel so strongly about this that today I am going to issue a statement to the press calling for further investigation,'" the member said, recalling Walpin's words.  "The board members all caught that.  Several of us wrote down that he was going to be issuing a statement to the press that afternoon."

It was a distressing scenario for the board.  As a favorite program of Barack and Michelle Obama, AmeriCorps was enjoying a higher profile than ever before.  The Corporation also stood to receive vast amounts of new funding from the $5.7 billion Edward M. Kennedy Serve America Act, which would triple the size of AmeriCorps. And in the midst of that, here was the agency's inspector general saying he might re-open an investigation into an embarrassing episode involving hundreds of thousands of mis-spent dollars and a politically prominent supporter of the president.

"Right now, when there is such a great emphasis on service, we did not need any press out there on this St. HOPE matter, which was already settled," the board member told me.  "We thought he was going to use the press…He had an issue with the fact that a settlement was reached…and he was doing everything he could to continue to keep the issue at the forefront."

As it turned out, Walpin did not issue any statement, to the press or anyone else.  (He doesn't recall whether he said precisely what the board member recalls, although, he told me, "There wouldn't have been anything wrong if I had.")  Instead, Walpin contacted the FBI in Sacramento with word of the Maya allegations, and agents there are now investigating the matter.

Later in the meeting, members questioned Walpin about his intentions.  It was at that point that they say Walpin became confused and disoriented.  But whatever Walpin's demeanor, it appears that board members, of both parties, were worried about the possibility of embarrassing new revelations involving a sensational case they thought had been closed.  After the meeting, the board began an accelerated effort to remove Walpin, compiling an informal list of grievances against him -- he could be difficult, he telecommuted, he was somehow disabled -- that the White House would ultimately cite as cause for his firing.  But there is no doubt that, whatever the other reasons, the board feared that a revival of a scandal they thought was in the past would be embarrassing to the newly-prominent AmeriCorps.

For more background on the Walpin firing, see here and here and here and here.
-Byron York



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