The United States Court of Appeals for the District of Columbia has rejected fired AmeriCorps inspector general Gerald Walpin's lawsuit seeking reinstatement to his job. In a ruling issued Tuesday morning, the three-judge panel -- one appointed by the first President Bush, another appointed by President Clinton, and the third appointed by the second President Bush -- agreed with a lower-court ruling that Walpin does not have a "clear and indisputable right" to his former job.

In June 2009, Walpin was the inspector general for the Corporation for National and Community Service, which oversees the AmeriCorps service program.  He had been aggressively investigating the misuse of $800,000 in AmeriCorps grant money given to a program run by Kevin Johnson, the mayor of Sacramento, California who also happens to be a prominent Obama supporter.  As a result of Walpin's investigation, Johnson was, for a while, suspended from receiving any new federal grants.  Later, an acting U.S. attorney who was seeking a post in the Obama administration refused to pursue the Johnson matter.  Inside the Corporation, Walpin expressed his unhappiness with that decision and his desire to continue investigating corruption in Sacramento.

On June 10, 2009, Walpin received a call from the White House counsel's office in which he was given one hour to resign or be fired.  He chose not to resign and was fired.  The action alarmed Republicans on Capitol Hill, particularly Sen. Charles Grassley, because it appeared to violate a law designed to protect the independence of inspectors general by requiring the president to give Congress 30 days' notice, plus an explanation, before firing an IG.

Later, the White House told Congress that Walpin had not been summarily fired; he had been placed on "administrative leave" for 30 days and then fired  And as a reason for the firing, the White House told lawmakers that the president no longer had the "fullest confidence" in Walpin.

Walpin sued, arguing that his removal clearly violated the law. In June of 2010, Walpin lost his case before U.S. District Court in Washington.  Now, he has lost before the Court of Appeals.  The three-judge panel ruled that the White House's decision to place Walpin on administrative leave for 30 days (after telling him he was fired) did not violate the law.  Further, the judges ruled that Obama's explanation that he no longer had "fullest confidence" in Walpin "satisfies the minimal statutory mandate that the president communicate to the Congress his 'reasons' for removal."

It is an across-the-board defeat for Walpin.  But it is also a clear danger sign for the independence of inspectors general.  The court's decision effectively means that the president can remove future inspectors general immediately, without notice to Congress, simply by placing an inspector general on immediate administrative leave, following by formal firing 30 days later.  Also, the president can simply tell Congress he did it because he no longer has confidence in the inspector general.

Such a scenario is not what the bipartisan group of lawmakers had in mind when they crafted the protections for inspectors general.  Whether they will strengthen the law as a result of the Walpin case remains to be seen.

UPDATE: Sen. Grassley, perhaps the strongest advocate of inspectors general in Congress, has released a statement expressing his unhappiness with the court's ruling:

While the IG Reform Act doesn't include a private right of action to enforce the 30-day notice, there's no doubt that this termination violated the spirit and intent of the law.  Giving the Inspector General a one-hour ultimatum in order to force a resignation clearly would have side-stepped the legal notice requirement if it had worked.  At the request of several senators, the White House eventually provided a more detailed notice about the reasons for the removal.  I'm disappointed that the Court appears to have interpreted the notice requirement even more narrowly than the White House.  It dilutes the independence of these government watchdogs if the only explanation necessary for their removal is something as vague as "lost confidence." That's bad news for accountability in government.