Audit: Gonzales-Era DOJ Played Politics

Top aides to former Attorney General Alberto Gonzales violated federal law and Justice Department policy by considering politics in hiring career employees, according to an internal department report released today.

Monica Goodling, the former Justice Department White House liaison, came under particular scrutiny in the report.

"Our investigation found that Monica Goodling and others in the attorney general's office subjected candidates for certain career positions to the same politically based evaluation she used on candidates for political positions, in violation of federal law and department policy," Inspector General Glenn Fine said in a statement. "This resulted in high quality candidates for important department positions being rejected because of improper political considerations."

Goodling's attorney, John Dowd, said via e-mail that he thinks the report leaves many questions unanswered. Dowd and the rest of Goodling's legal team released a statement this afternoon, praising their client for the "candor and detail" of the testimony she gave before Congress in May 2007, after she resigned from the department.

The attorneys say that "each and every one of the core conclusions" of the report "is consistent with, and indeed, derived from, Ms. Goodling's testimony before the House Judiciary Committee," and that it was Goodling, herself, who brought the issues to light.

"As concluded in the report, Ms. Goodling candidly admitted to Congress that she had 'crossed the line' by considering political factors with respect to a variety of career positions at the Department of Justice, and that she regretted those errors," their statement added.

Because none of the officials singled out in the report still work at the Justice Department, they aren't subject to internal sanctions. It's not yet clear whether a criminal investigation is underway, but Democratic lawmakers on the House Judiciary Committee said Thursday that they are looking into a possible criminal referral regarding testimony DOJ officials gave to Congress.

"The report also indicates that Monica Goodling, Kyle Sampson, and Alberto Gonzales may have lied to the Congress about these matters" contained in the report, a statement from panel Chairman John Conyers, D-Mich., said. "I have directed my staff to closely review this matter and to consider whether a criminal referral for perjury is needed."

Goodling's attorneys called the insinuation that she might have lied to Congress "outrageous," and noted that Conyers thanked her for her testimony at last year's hearing.

The report did not offer any evidence that Gonzales was personally aware of any of the illegal hiring procedures, and his attorney railed against any suggestion that the former attorney general lied to Congress.

Calling on Conyers to retract his statement, George Terwilliger III said in a letter to the lawmaker that the report "in no way 'indicates' that Judge Gonzales may have been untruthful with Congress" about the matters addressed within it.

The former attorney general issued a statement on the report's findings. "Political considerations should play no part in the hiring of career officials at the Department of Justice. I am gratified that the efforts I initiated to address this issue have now been affirmed and augmented by this report. I agree with the report's recommendations."

Terwilliger said in a statement issued earlier today that the report findings indicate Gonzales "was not involved in or aware of the politicized hiring practices of staffers" and that, before he left the department, Gonzales made moves to correct the department's problems.

In addition to Goodling, investigators knocked several other former high-level officials at the department, including former Gonzales chief of staff Kyle Sampson. But the report focuses heavily on Goodling, who resigned in the wake of the political firestorm last April.

Investigators cited examples of job candidates whom Goodling allegedly discriminated against because of their political leanings or other ideological differences, and cases in which lesser-qualified applicants filled jobs because of Goodling's decisions.

In one case, investigators found Goodling was hesitant about a candidate for an assistant U.S. attorney position because his resume indicated he was a "liberal Democrat."

"Goodling also stated that, because Republicans had lost control of Congress after the November 2006 elections, she expected that Republican congressional staff might be interested in applying for AUSA positions in Washington," the report said.

Goodling also refused to approve the appointment of a seasoned assistant U.S. attorney -- with significant experience prosecuting terror cases -- to a counterterror position, even though he came highly recommended from several department officials, according to the report.

The candidate's wife "was a prominent local Democrat elected official and vice-chairman of a local Democratic Party," which investigators determined to be the reason Goodling would not approve the appointment.

The position eventually went to an attorney who "had no counterterrorism experience and had less than the minimum of five years of federal criminal prosecution experience required by the job announcement," but was a registered Republican, the report states.

Additionally, Goodling elected not to renew the appointment of a Republican employee, at least in part, because she was reportedly involved in a lesbian relationship, investigators found.

"In sum, we concluded that the evidence showed that Goodling violated both federal law and department policy, and, therefore, committed misconduct when she considered political or ideological affiliations in hiring decisions for candidates for career positions within the department," the report said.

The report tracks with the findings of a separate inquiry completed last month, which found that Justice Department officials played politics in the hiring process for two competitive employment programs for law students and recent graduates.

Complaints about the allegedly political motivations behind the firing of at least nine U.S. attorneys in 2006 spurred on the investigation, which expanded to include an investigation into allegations that Goodling considered political and ideological leanings in hiring at the department.

Investigators interviewed Gonzales as part of the investigation, but reported that he did not recall or did not have knowledge of the events in question, even though they involved his top aides. Gonzales left the department last September after months of criticism from both Democratic and Republican lawmakers.

The report noted that, while testifying on Capitol Hill last May, Goodling said she did not think Gonzales was aware that she posed political questions to job applicants. In an interview with investigators, Gonzales upheld that account.

"It's simply not possible for any cabinet officer to be completely aware of and micromanage the activities of staffers, particularly where they don't inform him of what's going on," Terwilliger explained.

Gonzales' successor, current Attorney General Michael Mukasey, said in a statement that he is "disturbed" by the findings and reiterated his stance that "it is neither permissible nor acceptable to consider political affiliations in the hiring of career department employees."

Mukasey also noted that the department, starting under Gonzales, has implemented reforms to combat the issues called out in the report.

Senate Judiciary Committee chairman Patrick Leahy, D-Vt., said in a statement that the report's findings further demonstrate "a clear indication of the untoward political influence of the Bush administration on traditionally non-political appointments." Leahy said he believes politicization at the Justice Department is not because of "a few bad apples," but that the issues are "rooted deeper than that."

Fine will testify about the report's findings before Leahy's committee om Wednesday.

ABC News' Pierre Thomas and Ariane de Vogue contributed to this report.