Former Inspector General Gerald Walpin

A federal appeals court has affirmed the dismissal of a U.S. inspector general who had pursued a case involving a friend of Barack Obama and was summarily dismissed, but critics note that the dispute may not yet be concluded, as the president's actions even could be considered grounds for impeachment proceedings.

The ruling today came from the U.S. Court of Appeals for the District of Columbia in the case brought by former IG Gerald Walpin.

He had challenged his dismissal – which came on one hour's notice although Obama's administration later changed that to reflect a 30-day suspension and then a dismissal. Obama's reason for dismissal was that he didn't feel confident in the IG's work.

White House Special Counsel Norman L. Eisen removed Walpin from his office as inspector general for the Corporation for National and Community Services in June 2009. The action was taken after Walpin submitted two reports that proved highly embarrassing to the Obama administration.

The more prominent report found that Sacramento mayor Kevin Johnson, a Obama supporter, had misused some of more than $800,000 in federal grant money while running a Sacramento charter school, St. HOPE Academy. The government subsequently suspended Johnson's eligibility for receiving federal funding.

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There was no word whether an further appeal would be filed.

As WND reported at the time, the White House fired Walpin from his watchdog position following his exposure of the incidents of sexual misconduct and gross misappropriation of federal funds by Johnson, a prominent Obama advocate.

The appeals court ruling said said the president's decision to put Walpin on a 30-day "suspension" after Walpin had been given a one-hour ultimatum to resign or be dismissed actually met the requirements of the federal Inspector General Act.

"Walpin maintains he was prematurely 'removed' without the statutory notice on June 10, 2009, when he was placed on 'administrative leave,'" the court said. "His placement on administrative leave, however, did not constitute removal from office and therefore did not give rise to a clear right to relief…"

The court also ruled that Obama's expression that he didn't feel confidence was a sufficient reason to take the action.

"This explanation satisfies the minimal statutory mandate that the president communicate to the Congress his 'reasons' for removal," the court said.

Sen. Chuck Grassley, R-Iowa, who had demanded that the White House provide answers about the situation, said the ruling, if unchanged, damages those who are supposed to watch out for taxpayers' interests as the government conducts its business.

"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 IG Reform Act," he told WND.

"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.

"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," he said.

In a column at the Washington Examiner, chief political correspondent Byron York noted, "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," he wrote.

"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," he said.

The Johnson situation developed when he started a nonprofit, St. HOPE, and got about $850,000 from AmeriCorps.

Walpin's investigation found Johnson had used federal money to pay people to run personal errands, wash his car and even take part in political activities. Walpin wanted federal prosecutors to investigate.

However, a settlement was reached with St. HOPE where the organization repaid about half of the money it had gotten.

The Walpin firing was one of the incidents cited by Floyd Brown, president of the Western Center for Journalism, who has called for impeachment proceedings against Obama.

Brown said firing Walpin was among the list of offenses that should be investigated.