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As the Examiner's Byron York has reported, the sense of urgency that led to the June 10 quit-or-be-fired ultimatum to AmeriCorp IG Gerald Walpin was related to concerns that Walpin's whistleblowing about Sacramento Mayor Kevin Johnson -- whose St. HOPE Academy misused hundreds of thousands of taxpayer dollars -- would jeopardize Sacramento's ability to get its share of $787 billion in stimulus spending.

California blogger Eric Hogue calls attention to a KRCA radio interview in March with Rep. Doris Mastui, the Democrat who represents Sacramento in Congress:

Sacramento Mayor Kevin Johnson has asked U.S. Rep. Doris Matsui to help keep the flow of federal funds coming into the city.
Johnson is not allowed to receive federal funds because of allegations his St. Hope-Hood Corps Foundation misused federal money.
Matsui, D-District 5, who appeared on the KCRA 3 Morning News on Saturday morning, said she believes Sacramento will get money, but she can't guarantee it.
"Under any scenario, we are going to get the money. We are going to get the money," she said. "I understand that process has to unfold. The mayor is dealing with that. We are dealing with the situation at the federal level. The city is taking the right steps. They have to disclose this, and we are moving forward."
Matsui added that she has been in contact with White House officials and other members of the federal government.

If Matsui contacted the White House before Walpin was fired . . . Well, this interview is certainly raising questions on Capitol Hill.

Also on Capitol Hill, the lawsuit Walpin filed last week, seeking reinstatement to his IG job, has provided Democrats with a perfect excuse to stop investigating the AmeriCorps case. The Washington Post's Ed O'Keeke reports:

Rep. Edolphus Towns (D-N.Y.) said his Oversight and Government Reform Committee would suspend its investigation into the firing of Gerald Walpin, the former inspector general at the Corporation for National and Community Service, since the former watchdog filed suit against the agency last Friday in federal court. "We have met with White House staff and interviewed staff at the Corporation for National and Community Service, and Democratic and Republican board members, and have reviewed hundreds of pages of documents," Towns said in a statement. "This evidence shows that the Corporation board’s report expressing concerns about Mr. Walpin’s performance was fact-based, unanimous, and nonpartisan." Towns said President Obama had "legitimate reasons for removing Mr. Walpin."

Translation: "Nothing to see here. Move along." This was perhaps to be expected, and probably won't make much of a difference. One Republican source on the Hill described Democratic investigative staff on the House Oversight Committee as "useless." Meanwhile, the congressional patron saint of watchdogs and whistleblowers, Republican Sen. Chuck Grassley of Iowa, published a column in Politico:

The IGs, in particular, are the government's first line of defense against fraud. Obama needs them to both deter and stamp out waste. Let's hope he doesn't close the door on them. . . .
I've been a strong advocate for government watchdogs and spent a lot of time on congressional oversight and investigation, so I have high hopes for what Obama has said about making the federal government more transparent and accountable.
At the same time, there are recent allegations of the administration undermining IG independence. Whether the claim that the IG for AmeriCorps — the federal program that sponsors volunteerism — was fired for reporting waste at a pet project is true or not, the decision to get rid of the IG sends a signal from the White House that could have a chilling effect on IG work. It could turn other IGs into lap dogs afraid to ask tough questions and expose problems. . . .
With the money spigot wide open, taxpayers deserve an IG in chief. The FBI director testified in March that the surge in stimulus-related funding will cause fraud to "skyrocket." . . .

Read the whole thing. Despite every effort of Democrats to ignore it, "The Little Scandal That Could" just keeps chugging up that hill.