With the news dominated by Iran, health care, and Sonia Sotomayor, you might not have noticed what could become the first scandal, or at least mini-scandal, of the Obama White House.
It concerns AmeriCorps, one of President Barack Obama's favorite federal programs. A few weeks ago, the president was beaming as he signed a $5.7 billion bill that will triple the size of the domestic volunteer agency. Now, there are questions about whether he tried to meddle with an investigation into allegations of waste and fraud there.
On the evening of Wednesday, June 10, Norman Eisen, the special counsel to the president for ethics and government reform, called a man named Gerald Walpin, who was the inspector general with oversight of AmeriCorps, to tell Walpin he was being fired.
"He said, 'Mr. Walpin, the president wants me to tell you that he really appreciates your service, but it's time to move on,'" Walpin recalls. "Eisen said, 'You can either resign, or I'll tell you that we'll have to terminate you.'"
There are inspectors general in every federal agency and department. Their job is to investigate allegations of waste, fraud and other misdeeds involving federal tax dollars.
Because their work often irritates the politically appointed higher-ups in their departments — sometimes even in the White House — Congress has given inspectors general special job protections.
In 2008 lawmakers passed the Inspector General Reform Act. The law says that if a president wants to fire an inspector general, he must first give Congress 30 days' notice, along with the reason for his decision.
The Act was co-sponsored by then-Sen. Barack Obama. So it was quite a surprise when the inspector general of a favorite Obama agency received a call, out of the blue, from the White House telling him he had an hour to decide whether to resign or be fired.
That completely flew in the face of what the lawmakers who wrote the Inspector General Reform Act intended. Walpin refused to resign, and only then did the White House notify Congress, as the law required.
Why did it happen? It turns out Walpin had angered the top management of AmeriCorps by investigating Sacramento, Calif., mayor Kevin Johnson, a prominent friend and supporter of the president.
Before being elected mayor last November, Johnson, a former NBA star, ran a non-profit educational group called St. HOPE, which received about $850,000 in federal AmeriCorps funds.
Last year, Walpin's office got a tip that Johnson was misusing some of the money. After an investigation, Walpin found that, indeed, St. HOPE had used federally-funded AmeriCorps staff for, among other things, "driving [Kevin Johnson] to personal appointments, washing his car, and running personal errands."
Walpin came to the conclusion that Johnson and St. HOPE should be banned from receiving any more federal money.
That created an awkward situation, to say the least, especially after Congress passed the $787 billion stimulus bill. The bill raised hopes in cities across the country that local governments would be given zillions of federal dollars. What would it mean for Sacramento if its mayor were banned from receiving federal money?
There was a lot of pressure in the city for the Johnson ban to be lifted. And there was pressure in the top ranks of AmeriCorps to stop the investigation that was causing discomfort for a high-profile Obama supporter. So a deal was cut — Johnson agreed to pay back some of the AmeriCorps money, and the ban was thrown out.
Walpin, the man who had found the misuse of federal money in the first place, was not consulted. When he learned about it, he was plenty mad — and he let the AmeriCorps board of directors know about it. He also let members of Congress know. And not long after, he got that "you've got one hour" call from the White House.
Now, Republicans in Congress are calling for an investigation of Walpin's firing, and even some Democrats have questions.
When he got the ultimatum from the White House, Walpin told Norman Eisen, the official who called him, that the timing seemed "very interesting," given the controversy over the Sacramento investigation. Eisen, according to Walpin, responded that it was "pure coincidence."
Maybe so. But to find out, Congress will need to demand some answers.
Byron York is chief political correspondent for The Washington Examiner.