Special Report

Obama Plays Hardball With Watchdogs

The independence of inspectors generals comes under fire.

By 6.25.09

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Gerald Walpin has quickly become the most famous of the three inspector generals who've left their jobs in recent weeks, exposing what appears to be a pattern of pressure from the Obama administration.

In radio and television interviews, the silver-haired 77-year-old former AmeriCorps IG has certainly contradicted insinuations of senility that administration officials made in defending the quit-or-be-fired ultimatum that Walpin said he received on June 11. On Tuesday, Walpin released a letter signed by more than 140 allies -- including a former White House counsel to President Clinton -- attesting that they have never seen him "confused" or "disoriented," as the administration claims he appeared to be at a May 20 meeting.

Yet the investigations into President Obama's evident crackdown on IGs -- designated watchdogs who guard against waste, fraud and abuse in federal agencies -- are not about Walpin.

Those familiar with the investigations (and yes, that noun is plural) caution against personalizing or politicizing the situation. These sources are especially concerned that inquiries by Republican members of Congress should not be portrayed as a partisan "gotcha" game against the popular new president.

Similar words of caution are expressed by some members of the IG community, who note that Walpin had only been watchdogging the Corporation for National and Community Service for two years. An able attorney and certainly not the doddering incompetent that Obama officials portrayed him to be, Walpin hasn't been an IG long enough to have acquired "veteran" status, and some say he had a reputation as "arrogant" or "holier-than-thou."

Whatever Walpin's reputation, however, sources familiar with his dismissal believe it was no accident that he was shown the door immediately after getting into a dispute with Eric Holder's Justice Department over a program affiliated with Sacramento Mayor Kevin Johnson, an enthusiastic political ally of Obama. And perhaps the most important fact of the case so far is that the FBI is now investigating an accusation that e-mails relevant to Walpin's work were deleted by Johnson or others. Destroying evidence in a federal investigation is a serious crime, no matter what the other circumstances of the case may be.

While Walpin's case has pushed the IG story into the headlines, the cases of two other ex-IGs are now the subject of congressional inquiries:

• Judith Gwynn, inspector general for the International Trade Commission, was notified last week that her contract would not be renewed. She received that notice shortly after Iowa Sen. Chuck Grassley sent a letter to ITC Chairwoman Shara Aranof inquiring about an incident in which Gwynn said procurement documents "were removed forcibly from [her] possession" by a commission staffer.

• Fred Wiederhold Jr., inspector general for Amtrak, retired without notice or explanation June 18. Grassley says the unexpected resignation came after Wiederhold was asked to provide "specific examples of agency interference with OIG audits and/or investigations."

An interesting angle to emerge in the Wiederhold case, according to sources, is that many of the IG's problems involved Amtrak vice president and general counsel Eleanor Acheson. A former Clinton administration Justice Department official under Attorney General Janet Reno, Acheson is not only the grandaughter of former Secretary of State Dean Acheson, but also happens to have been Hillary Rodham Clinton's roommate at Wellesley College.

That famous connection may be merely coincidental, but shortly after The American Spectator's blog first mentioned Acheson's name in regard to the IG probe Tuesday, Michelle Malkin noted another connection that is almost certainly less of a coincidence. After joining Amtrak in January 2006, Acheson brought in as her deputy Jonathan Meyer, who spent six years as a top Senate aide to Joe Biden, who for years has proudly proclaimed himself Amtrak's No. 1 advocate in Washington.

It was Biden who in March announced that the money-losing passenger rail service would get $1.3 billion from the massive $787 billion "stimulus" bill Obama signed in February. As Malkin also noted, the vice president's son, Hunter Biden, serves on the Amtrak board of directors.

Clearly, the Amtrak IG situation will get close scrutiny on Capitol Hill -- as of Tuesday, Wiederhold had made no public comment about his sudden retirement -- but perhaps the most interesting part of the developing inspectors general story involves an IG who is still on the job.

Neil Barofsky is "SIGTARP," the special investigator general whose job is to keep an eye on disbursement from the Troubled Assets Relief Program, the $3 trillion financial bailout that was rushed through Congress in October. Last week, Grassley sent a stern letter to Treasury Secretary Timothy Geithner, asking about "a dispute over certain Treasury documents that were being withheld from SIGTARP auditors on a specious claim of attorney-client privilege."

At stake in the TARP case -- as in the cases of the IGs at Amtrak, AmeriCorps and the ITC -- is whether the inspectors generals will remain vigilant watchdogs on behalf of taxpayers or become compliant lapdogs, allowing Obama's political appointees to do as they wish without fear of independent scrutiny.

Given the controversial nature of the TARP -- including the public outcry over bonuses paid to top employees of insurance giant AIG, a bailout beneficiary -- Grassley is by no means the only member of Congress interested in preserving Barofsky's independence. In April, Geithner was grilled by Texas Republican Rep. Jeb Hensarling and other members of Congress at a hearing after Barofsky reported a "staggering" amount of fraud in the bailout program.

Hensarling is one of the staunchest critics of TARP and, as ABC News reported last week, the Texan sent a letter to Elizabeth Warren, chairwoman of the congressional panel charged with overseeing the bailout, warning that Treasury's actions were a "threat to [Barofksy's] independence."

Several observers see the administration's push against the IGs as emblematic of the notorious Chicago style of political hardball that Obama learned to play early in his career. As investigators move forward in their effort to safeguard the independence of the inspectors general, it will be an important test of whether "the Chicago way" will prevail on the shores of the Potomac.

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About the Author

Robert Stacy McCain is co-author (with Lynn Vincent) of Donkey Cons: Sex, Crime, and Corruption in the Democratic Party (Nelson Current). He blogs at The Other McCain.