(Adds restitution for improper credit card expenses)

By Kelly Twedell

FORT BRAGG, N.C., March 20 (Reuters) - A U.S. Army general who admitted to an adulterous sexual affair and other improper relationships with junior female officers was spared jail and dismissal from the service on Thursday, a sentence critics decried as a failure of military justice.

The case that derailed the 27-year Army career of Brigadier General Jeffrey Sinclair ended with a reprimand and $20,000 in forfeited pay as punishment after a plea deal in the rare court-martial of a top officer absolved him of sexual assault charges.

The one-star general's defense team said they were grateful for the sentence ordered by the trial judge, Colonel James Pohl. They argued Sinclair was unfairly portrayed by the Army as a sex offender when he was guilty of far lesser wrongdoing.

"The system has worked," a relieved Sinclair said after court in Fort Bragg, North Carolina. "All I want to do now is hug my kids and be with my wife."

Advocates of military justice reform said the case proved the armed forces still tolerates sexual misconduct in its ranks despite political pressure from Congress and the president to curb it. They said the lenient sentence for Sinclair would have a chilling effect on other victims of abuse.

"He made out like a bandit," said Eugene Fidell, a professor of military justice at Yale Law School. "This is a baffling denouement to a disturbing case."

The sentencing coincided with another high-profile military trial involving charges of sexual assault. A judge found a Naval Academy football player not guilty on Thursday of raping a female midshipman at an alcohol-fueled off-campus party in April 2012.

Sinclair, 51, a married father of two boys, was a rising star in the Army with five combat tours under his belt before criminal charges two years ago saw the former deputy commander of the 82nd Airborne Division stripped of his duties in southern Afghanistan.

A female captain 17 years his junior said she and the general had a three-year illicit affair, during which she alleged he had sex with her in a parking lot in Germany and on a hotel balcony in Arizona, threatened to kill her if she exposed the relationship, and forced her to perform oral sex when she tried to break it off.

CASE UNRAVELS

Sinclair admitted to adultery and mistreating the captain but maintained the affair was consensual. The case began to unravel over questions about the woman's credibility, and the defense vowed to undermine her further at trial, but the proceedings were halted this month before they got the chance.

After a finding by Pohl that politics appeared to have improperly influenced the Army's decision to reject an earlier plea offer by Sinclair, the general this week pleaded guilty to a litany of offenses in exchange for charges of coercive sex acts and indecent conduct being dismissed.

The plea bargain removed the threat of possible life in prison.

Instead, Sinclair faced a maximum of 18 months in jail for inappropriate relationships with junior female officers, possessing pornography on his laptop while deployed in Afghanistan, misusing his government credit card to visit his mistress, using derogatory language to refer to female officers and obstructing the military investigation into his conduct.

The judge handed down the non-jail sentence with no explanation. Prosecutors, who had asked for Sinclair to be dismissed by the Army and had said he abused his power and used it to exploit women, had no comment.

Sinclair's lawyers said the general planned to submit his retirement paperwork and could still be demoted by the Army as part of that process. He also will reimburse the government for about $4,000 in improper credit card expenses.

Critics said the fact that the general would be allowed to retire on his own accord rather than getting pushed out showed an overhaul of the military justice system was needed.

They said charging decisions in sexual assault cases should be made by independent military prosecutors rather than top commanders, a proposal voted down by the U.S. Senate earlier this month.

The Senate passed a measure, still subject to House approval, that would strengthen prosecutors' role in advising commanders on whether to go to court-martial and eliminate the "good soldier" defense, which allowed courts to reduce the sentence of offenders with strong military records.

"Today's sentencing is beyond disappointing, it is a travesty and a serious misstep for the Army," said retired Navy Rear Admiral Jamie Barnett, a partner in the Washington, D.C., law firm of Venable LLP who represented Sinclair's main accuser.

"The slap on the wrist and 'pat on the back' for being a so-called 'good soldier' points to the importance of Congressional action," Barnett said.

Sinclair's lead attorney, civilian lawyer Richard Scheff, rebuffed the criticism.

"Critics of this ruling weren't in court every day, haven't examined the evidence and have no idea what they're talking about," he said. (Additional reporting and writing by Colleen Jenkins; Editing by Scott Malone, James Dalgleish and Tom Brown)

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