An outraged Chicago Mayor Rahm Emanuel blasted the prosecution’s decision Tuesday to drop all charges against “Empire” actor Jussie Smollett, calling it a “whitewash of justice” resulting from the celebrity’s “influence and power.”

“This is without a doubt a whitewash of justice and sends a clear message that if you’re in a position of influence and power, you’ll get treated one way. Other people will be treated another way,” Mr. Emanuel said at a press conference. “There is no accountability then in the system. It is wrong, full stop.”

Chicago Police Superintendent Eddie Johnson stood by his department’s investigation, which alleged that Mr. Smollett falsely reported that he was attacked by two men Jan. 29 for being black and gay, and had orchestrated a hoax.

“Do I think justice was served? No. Where do I think justice is? I think this city is still owed an apology,” said Superintendent Johnson, who is black.

The sudden end of the Smollett case set Chicago’s Democratic leaders at war with one another. Police and city officials said they were blindsided by the Cook County State’s Attorney’s Office’s decision to drop all 16 felony charges against Mr. Smollett, 36, who stars in the Fox TV show “Empire,” and seal the record.

“After reviewing all of the facts and circumstances of the case, including Mr. Smollett’s volunteer service in the community and agreement to forfeit his bond to the City of Chicago, we believe this outcome is a just disposition and appropriate resolution to this case,” the state’s attorney’s office said in a statement.

Mr. Smollett agreed to forfeit his $10,000 bond payment, and there will be no deferred prosecution, said his attorney, Patricia Brown Holmes.

“There is no deal. The state dismissed the charges,” Ms. Holmes told reporters at the courthouse. “We have nothing to say to the police department except to investigate charges and not try their cases in the press.”

But Mr. Emanuel, a former Obama White House chief of staff, said he believed Mr. Smollett’s case was a hoax. He noted that a grand jury agreed to indict the actor after being presented with only a sliver of evidence unearthed by police.

“He said he was a victim of a hate crime both for his sexual orientation and for being black,” Mr. Emanuel said. “The evidence came forward, a grand jury saw the evidence, realized this was a hoax — a hoax on the city, a hoax on hate crimes, a hoax on people of good values, who were actually empathetic at first — and he used that empathy for only one reason.”

“He did this all in the name of self-promotion,” the mayor said.

The Cook County prosecutor who dropped the charges said he believes the actor is guilty but decided not to prosecute him anyway.

“I do not believe he is innocent,” Joseph Magats, first assistant Cook County state’s attorney, told CBS Chicago.

Asked whether he thinks Mr. Smollett is guilty, Mr. Magats said, “Yes.”

He said he opted to drop the charges based on the TV star’s lack of criminal background and other factors.

“Based on all the facts and circumstances, based on his lack of criminal background. I mean, we defer or do alternative prosecutions. In the last two years, we’ve done it on 5,700 other felony cases,” said Mr. Magats, a 28-year veteran of the office.

Police have said Mr. Smollett sought to boost his career and increase his salary on the TV show by appearing to be the victim of a high-profile hate crime.

After the court hearing, Mr. Smollett maintained his innocence. “I’ve been truthful and consistent on every single level since Day One,” he said.

“I would not be my mother’s son if I was capable of one drop of what I have been accused of,” he said. “This has been an incredibly difficult time, honestly one of worst of my entire life. But I am a man of faith, and I am a man that has knowledge of my history would not bring my family, our lives or the movement through a fire like this. I just wouldn’t.”

The stunning decision met with cheers by the writers of “Empire,” who tweeted “see y’all Wednesday.” The actor, who portrays the character Jamal Lyon, was written out of the final two episodes of the season last month.

Meanwhile, conservative commentators joined the mayor and police chief in condemning the decision. Several called for the FBI to investigate, raising the possibility that a threatening letter received by Mr. Smollett could open the case to federal jurisdiction.

Mr. Emanuel said the episode has come to an enormous cost to Chicago in terms of police resources and the city’s reputation.

“Now you have a person, because of their position and background, who’s getting treated in a way that nobody else would …,” the mayor said. “Our officers did hard work day in and day out, countless hours, working to unwind what actually happened that night. The city saw its reputation dragged through the mud.”

The decision to drop the charges brought renewed attention to Cook County State’s Attorney Kimberly M. Foxx, who recused herself from the case Feb. 19 after intervening on behalf of a Smollett relative and Tina Tchen, who served as chief of staff to first lady Michelle Obama, according to emails obtained by the Chicago Sun-Times.

Ms. Foxx had asked the police to bring the case to the FBI. Last week, the Fraternal Order of Police asked U.S. Attorney John R. Lausch Jr. to turn over the case to a special prosecutor, describing the late recusal as “wholly insufficient,” as reported by CWBChicago.

Elected in 2016, Ms. Foxx was bankrolled in part by Illinois Safety & Justice, a PAC funded by liberal billionaire George Soros, according to the Illinois State Board of Elections.

The Democratic megadonor has spent millions of dollars since 2015 to elect minority and leftist prosecutors. Liberals credit him with trying to “buy America a less racist justice system,” as New York Magazine put it.

Superintendent Johnson declined to comment on the state’s attorney’s office or Ms. Foxx and focused his criticism on Mr. Smollett.

“Prosecutors have their discretion, of course. We still have to work with the state’s attorney’s office,” the police chief said. “I’m sure we’ll have some conversation after this. But again, at the end of the day, it’s Mr. Smollett who committed this hoax, period. If he wanted to clear his name, the way to do that was in a court of law so that everybody could see the evidence.”

Ms. Holmes said the decision to avoid a court trial was made so that her client “could go on with his life and get this over with and not have to fight and not have to continue with all of the disruption to his career.”

“He is a very sweet individual,” she said.

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