Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (6 page)

Erik Jones, the St. HOPE teacher who eventually reported one of the victim’s allegations to the police, resigned in protest over the way the matter was handled by the school. In his resignation letter, Jones wrote “St. HOPE sought to intimidate the student through an illegal interrogation and even had the audacity to ask me to change my story.” Another St. HOPE official, Jacqueline Wong-Hernandez, also left St. HOPE because of the way the allegations were handled.
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But in the wake of Johnson’s mayoral victory and President Obama’s election, Acting U.S. Attorney Lawrence Brown rushed to settle with the new mayor so that he could avail himself of federal stimulus funds and other government money. Brown, who just so happened to be angling for a presidential appointment as the permanent U.S. attorney at the time,
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excluded Walpin’s office from settlement negotiations, even though Walpin had repeatedly asked that he be allowed to participate.

As Walpin said in his report:

The [CNCS] suspension [from access to federal funds] was lifted because, as one Corporation official put it, the Corporation could not “stand in the way of Sacramento”—thereby effectively stating that, while Respondent Johnson was not sufficiently responsible to receive further Federal funds in his management position as a grantee, he suddenly became sufficiently responsible when elected Mayor of a city receiving substantially more Federal funds—akin to deciding that, while one should not put a fox in a small chicken coop, it is fine to do so in a large chicken coop!

The settlement accepted by the Corporation leaves the unmistakable impression that relief from a suspension can be bought. In addition, media pressures and political considerations both appear to have impacted the Corporation’s decision here. The Corporation—in a departure from talking to and working with OIG on any matter in which OIG has an interest and/or involvement—refused to discuss this “settlement” with OIG and obtain OIG’s views on the terms, and merely informed OIG of the “done deal” after it had been signed.
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How threatened was the political establishment? Sacramento Mayor Kevin Johnson’s fiancée, Michelle Rhee—the high-powered schools chief of the District of Columbia—just happened to have been on the board of directors of St. HOPE at the time of the probe. She paid Walpin a visit in June 2008 to vouch for Johnson. As Byron York of the
Washington Examiner
reported:

Rhee’s June 2008 visit to Walpin’s office wasn’t her first talk with him. Shortly before that, she had called Walpin, apparently to see how the investigation was going. It was widely reported at the time that Rhee was planning to include St. Hope in a group of educational organizations that would be hired to run 10 of the District’s most troubled high schools.

“Because she knew we were investigating Johnson, she called me to find out whether there would be anything coming out that she should take into account in deciding whether to contract with Johnson,” Walpin says. “I told her I could not give her any bottom line as to what we were doing, but she knew that we were looking into the St. Hope matter.”

At the time of her conversations with Walpin, Rhee was not only aware of the financial misuse investigation; she appears to have known about the sexual misconduct allegations, too. According to a new report by Republican investigators in the House and Senate, a former St. Hope employee told Walpin’s staff that Rhee “learned of the allegations and played the role of a fixer, doing ‘damage control.’”
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Walpin refused to buckle to political pressure. Shortly after he issued his scathing report, the White House announced that it had “lost confidence” in Walpin and fired him.
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“Damage control” quickly gave way to a Washington witch hunt.

Who was behind Walpin’s termination? Evidence gathered by Senator Grassley and Congressman Issa point to a possible role by Michelle Obama:

First Lady Michelle Obama has involved herself in the President’s effort to increase national service by making personnel decisions at the Corporation. According to notes from a March 12, 2009 CNCS Board call, “the First lady will be playing a central role in the national service agenda.” In June 2009 [the same month that Walpin was fired], the First Lady’s former chief of staff was installed as an adviser to the Corporation. The First Lady has also been tasked with appointing the Corporation’s next Chief Executive Officer.
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Mrs. Obama’s interest in AmeriCorps is more than passing. She ran the AmeriCorps-funded non-profit Public Allies in Chicago from 1993 to 1996 and served on its national board until 2001. Like so many of the AmeriCorps recipients investigated by the inspector general’s office over the years, Public Allies was found to have violated basic eligibility and compliance rules. A January 2007 audit reported that the group lacked internal controls verifying that recipients who received education grants and living allowances were legal citizens or permanent residents as required by law.
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Mrs. Obama’s former chief of staff, Jackie Norris, told the
Chronicle of Philanthropy
that her role as national service adviser was to ensure—in her words—that corporation officials are their “No. 1 cheerleaders.”
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Congressional investigators discovered that on the day before Walpin was fired, Norris had met with then-CNCS chairman Alan Solomont. Solomont was a top Democrat campaign finance bundler, the chief New England fundraiser for the Obama presidential campaign, and was later confirmed as the U.S. Ambassador to Spain in December 2009. When questioned about his meeting with Norris, Solomont initially denied it took place. When confronted with visitor logs contradicting his denial and showing that Solomont had met at least three times with Norris, Solomont then denied that they discussed Walpin. In a letter to Solomont, GOP Congressman Darrell Issa blasted Solomont’s disingenuousness and holes in Solomont’s stories.

“Because of these remaining questions,” Issa said, “I am not able to conclude with any confidence that inappropriate political considerations did not play a part in Mr. Walpin’s removal. I am also left with serious questions about the veracity of your... testimony.”
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The White House staff cut off further questioning of Solomont, who conveniently escaped the glare of public scrutiny by moving with his family to Spain to take up his new ambassadorship.

Then there’s the matter of the manner in which Walpin was fired. In 2008, Congress passed a law—the Inspectors General Reform Act—that requires the president to give Congress both thirty days notice and an explanation before firing an inspector general. The law was co-sponsored by then Senator Barack Obama, among others.

After Walpin was dismissed, Democrat Senator Claire McCaskill of Missouri expressed concern that the Inspectors General Reform Act had not been followed, since Congress was given neither thirty days notice nor a reason for Walpin’s dismissal. In response, White House lawyer Norman Eisen explained that Walpin was fired because he had appeared at a meeting of the CNCS in which he “was confused, disoriented, unable to answer questions and exhibited other behavior that led the Board to question his capacity to serve.” Eisen stated that it was “pure coincidence” that Walpin was fired during the St. HOPE controversy.
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First Law of the Chicago Way: There’s no such thing as coincidence.

Based on their investigation, Senator Grassley and Congressman Issa conclude that Eisen’s inquiry was not really much of an inquiry:

Eisen relied entirely on information provided by [former CNCS chairman Alan] Solomont and Walpin’s chief adversaries [CNCS Acting CEO] Nicola Goren and [CNCS General Counsel] Frank Trinity. In many cases, their concerns about Walpin’s fitness to serve as IG lacked merit. Often, their concerns amounted to complaints that Walpin was difficult to work with. Because Eisen apparently did no further investigation and engaged in no genuine consultation with Congress, the White House failed to implement the IG Act as intended.
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In the wake of his firing at the hands of Obama’s cronies and moneymen, Walpin appeared on numerous television and radio talk shows. In every appearance that I observed, he was as sharp as a tack.

A bipartisan group of attorneys came to Walpin’s defense and pushed back against the Obama smear machine. In response to the White House allegations, 146 practicing lawyers—including Democrats such as Bernie Nussbaum, former President Clinton’s first White House counsel—signed a letter stating that “we have never seen Mr. Walpin to be ‘confused, disoriented [or] unable to answer questions.’”
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The letter continued:

While none of us was present at the meeting referred to in Mr. Eisen’s letter, we can report only that such an allegation is totally inconsistent with our personal knowledge of Mr. Walpin who has always, through the present day, exhibited a quick mind and a command of the facts (whether we agree with him or not) and eloquence—essentially the opposite of someone who is “confused, disoriented, unable to answer questions.”
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Upon shutting down its investigation of the St. HOPE financial abuse matter in Sacramento, the FBI’s inspectors general oversight panel cleared Walpin of any wrongdoing. “After carefully considering the allegations described in the complaint together with your response,” the Integrity Committee wrote Walpin in October 2009, the panel “determined that the response sufficiently and satisfactorily addressed the matter and that further investigation was not warranted.”
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In March 2010, Congressman Issa and Senator Grassley released more documents pointing to rank politicization, White House stonewalling, and Washington game-playing. Congressional investigators found that Acting U.S. Attorney in Sacramento Lawrence Brown had frequently exchanged informal emails about Walpin with Matthew Jacobs, Kevin Johnson’s attorney, “which do not suggest an appropriately arm’s length negotiating relationship.” Indeed, Brown expressed sympathy for Jacobs, who attacked Walpin in an e-mail on March 24, 2009:

WTF is wrong with this guy! First, he tried to effect (sic) the election; now he’s messing around with the entire region’s federal funding! Over this case?!

In all seriousness, the U.S. Attorney needs to stand up and say this isn’t right. The U.S. Attorney represents the face of justice in this District, and for this District. Please.

Thanks. Matt

Brown responded: “Message heard loud and clear, Matt. I am at a complete loss and do in fact plan to speak with Gerald [Walpin].”
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Brown’s jihad against Walpin parroted all of Jacobs’ complaints. Message heard loud and clear, indeed.

House GOP investigators also discovered an internal memo that had been withheld by the White House showing that the administration had mulled over inappropriate political reasons for firing Walpin. Specifically, the May 21, 2009, memo from CNCS General Counsel Frank Trinity to Elana J. Tyrangiel of the White House Counsel’s Office cited Walpin’s audit of an AmeriCorps program at the City University of New York (CUNY)—the largest AmeriCorps program in the nation. As Congressman Issa and Senator Grassley’s report noted, “Whatever the merits of the policy dispute between Trinity and Walpin, it seems inappropriate to cite those differences as some sort of basis for removing Walpin from office. The normal course for an agency that disagrees with an Inspector General recommendation is to simply communicate the agency position to the Inspector General and to Congress rather than initiating a termination.”
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Walpin had uncovered a raft of grant violations, including criminal background check lapses and “pervasive problems of eligibility, timekeeping, and documentation.” He challenged duplicative educational awards of more than $16 million. CUNY refused to return excess funds that it had drawn down, failed to revise procedures to prevent such grant abuse, and refused to provide proof documenting that its AmeriCorps participants actually existed. Walpin advised AmeriCorps’ parent organization, the Corporation for National and Community Service (CNCS), to cut off any new funding and to re-examine past government funding totaling upwards of $75 million. But internal notes from CNCS discussions show that they had more “concern about potential for damage being done” and were irked by the “bad timing” of Walpin’s audits.
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After Walpin’s removal, CNCS administered a mere slap on the wrist to CUNY for its massive fiscal mismanagement. Instead of recouping the tens of millions in shady expenditures that Walpin had uncovered, AmeriCorps’ parent organization “docked the City University of New York (CUNY) $345,700 for this year, reducing its grant from $900,000 to $554,300.”
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“Throughout our investigation of Mr. Walpin’s removal, the White House has repeatedly communicated that the President was not motivated by inappropriate political reasons,” GOP Congressman Issa said in his report detailing Team Obama’s delays and deception. “The fact is Gerald Walpin led an aggressive investigation of a political ally of President Obama that successfully recovered taxpayer dollars. While firing an investigator who uncovered the abuse of funds by a political ally might be considered an act of ‘political courage’ in Chicago politics, for most Americans it raises troubling questions.”

A year after the threatening call and character assassination campaign from the White House, Walpin is suing to get his old job back; the Inspector General position at AmeriCorps’ parent organization is still vacant; and a chilling effect has taken hold in every other inspector general’s office in Washington, D.C.