Psaki said the Bureau of Diplomatic Security has been working with the Office of Inspector General to have an additional review of the cases by outside, experienced law enforcement officers who will then assess the department's current investigation procedures.
The Oct. 23, 2012 memo, which was first reported by CBS News, alleged that the ambassador at the overseas embassy "ditched his protective security detail in order to solicit sexual favors" from prostitutes.
The memo claimed that when Under Secretary of State for Management Patrick Kennedy learned of plans to investigate the ambassador, he ordered the Bureau of Diplomatic Security to "cease the investigation and have the agent return to Washington."
The senior State Department official confirmed to ABC News that the ambassador was scolded for bad judgment -- for example, walking in a park known for sexual trysts -- but insisted there was no evidence of actual wrongdoing.
As for the investigation, the official said, there was no probable cause for the surveillance the agent advocated, and the civil rights of the ambassador needed to be protected.
The ambassador issued a statement on Tuesday denying any wrongdoing, calling the allegations "devastating."
"I am angered and saddened by the baseless allegations that have appeared in the press," said the statement. "I live on a beautiful park ... that you walk through to get to many locations and at no point have I ever engaged in any improper activity."
Kennedy also issued a statement denying that he had impeded the investigation.
"It is my responsibility to make sure the department and all of our employees -- no matter their rank -- are held to the highest standard, and I have never once interfered, nor would I condone interfering, in any investigation," Kennedy said.
The Oct. 23, 2012 memo also claimed that several members of Secretary Clinton's personal security detail solicited prostitutes during official trips to Russia and Colombia. The alleged events preceded another scandal involving Secret Service officers and prostitutes in Colombia.
The agents confessed, according to the memo, but were punished with only a one-day suspension and then reassigned to other duties.
The memo said the investigating agent concluded that solicitation of prostitutes was an "endemic" problem in diplomatic security. But again, according to the memo, an investigation was called off. A more senior agent intervened to "shut down" the investigation.
The senior official told ABC News that, while a handful of agents have been disciplined with suspensions, solicitation of prostitutes is not an endemic problem at the State Department or grounds for dismissal.
Psaki, the State Department spokeswoman, also took issue with the allegation that the use of prostitutes by Clinton's security detail was "endemic." She noted that last year, Secretary Clinton's detail traveled to 69 countries with more than 10,000-person nights spent in hotels. While she would not speak to a few individual cases, she said the use of prostitutes was "hardly endemic."
"Any case we would take seriously and we would investigate, and that's exactly what we're doing," Psaki said.
The memo alleged that Secretary Clinton's chief of staff, Cheryl Mills, personally intervened to protect Brett McGurk, who had been nominated to be ambassador to Iraq but who had also been found have had an improper relationship with a reporter who eventually became his wife.
Investigators were never able to interview McGurk, the memo claimed, "allegedly because Cheryl Mills from the secretary's office interceded."
A senior State Department official told reporters that McGurk actually was interviewed twice during the course of the investigation.
The findings, which were apparently based on interviews with investigating agents, apparently led the State Department's Office of Inspector General, which by law is to be independent from the department it investigates, to write in the Nov. 20 draft of its report that, "in some cases superiors in DS and in senior levels of the department have prejudiced the commencement, course, and outcome" of investigations.
The draft report went on to detail specifics of the cases mentioned in the Oct. 23 memo, pointing the finger at "senior '7th floor' Department officials" who ordered the investigations cease. The 7th floor of the State Department's main building is where the Secretary of State and other top officials have their offices.
"Reportedly, such top-level intervention is rare, but it has taken place once or twice a year," the draft said.
The final report in February called for a "firewall" to protect investigators from interference.
The State Department insisted such a measure was not needed.
"We've disputed the notion of the issue of the firewall with the OIG office. We would never condone this," Psaki said, referring to the Office of Inspector General.