June 24, 2008 -- Senior Justice Department officials violated federal law and internal guidelines by improperly using political considerations to make hiring decisions for two competitive employment programs, an internal investigation has found.

The review, conducted by the department's inspector general and Office of Professional Responsibility -- both internal department watchdogs -- has concluded that many graduates at the top of their classes from the nation's best law schools were deselected from the highly competitive Justice Department Honors Program and the Summer Law Intern Program because of their political leanings or because of their affiliation with perceived liberal groups.

In one instance, a candidate who graduated at the top of his or her class at Harvard Law was denied a Justice Department job because of past work for the Council on American Islamic Relations.

The report also notes that Michael Elston, former deputy chief of staff to the deputy attorney general, told a member of the search committee to weed out "Wackos" and "Wack Jobs."

Allegations about improper hiring practices in the programs surfaced in an anonymous April 2007 letter sent to Congress signed by "A Group of Concerned Department of Justice Employees." The claim prompted the internal review.

The issue surfaced after the U.S. attorneys scandal, in which Democratic lawmakers charged that the department fired at lease nine of the prosecutors for political reasons, began to unravel, and scrutiny focused in on then-Attorney General Alberto Gonzales' management of the department.

"This joint report exposes the wrongdoing that occurred, and provides recommendations on how to prevent the improper infusion of partisan politics into the workings of the Honors Program and the Summer Law Intern Program in the future," Marshal Jarrett, the chief counsel of the Justice Department's Office of Professional Responsibility, wrote.

The DOJ review examined the hiring criteria used for the programs in 2002 and 2006 when a high number of applicants were deselected. As part of the 2002 review, the inspector general found that, while a higher proportion of candidates with Democratic affiliation were deselected based on information on their applications, the inspector general "found no other evidence that the members of the screening committee intentionally considered political or ideological affiliations in making their deselections, and the committee members all denied doing so."

The investigation did not find major issues or concerns about the deselection process from 2003-2005, but focuses on the actions of the selection committee in 2006 when Gonzales was the attorney general. The 2006 screening committee was chaired by Elston and Esther Slater McDonald, a political appointee who served as counsel to the associate attorney general. McDonald was a graduate of Pensacola Christian College and attended Notre Dame Law School.

The report also mentions Daniel Fridman, a career Justice official and assistant U.S. attorney from the Southern District of Florida, on detail to the deputy attorney general's office.

The report notes that Fridman expressed reservations about the selection process. "Fridman told us that, after his conversation with Elston, he was concerned and uncertain about what he was supposed to do. He did not understand what Elston meant by 'wackos' or 'wack jobs,' or how he was supposed to identify a candidate who fell within Elston's definition of those terms.

"Fridman said he had 'serious questions' about whether such a review was even appropriate."

Seeking clarification according to the report, "Fridman said Elston told him that, when he asked Fridman to weed out 'wackos and wack jobs, he meant he wanted us to weed out extremists on either side of the ideological spectrum.'"

The report found that the number of honors program candidates and summer interns deselected was so significant that component heads in Justice Department divisions became concerned about the process, noting that "several component hiring officials said that the large number of apparently high quality SLIP [Summer Law Intern Program] candidates who were deselected, led them, in the absence of any explanation, from the screening committee, to suspect that political or ideological affiliations played a role."

"The department's screening committee inappropriately used political factors when considering the hiring of career attorneys, when merit should have been the sole criteria. These actions undermined confidence in the integrity of department's hiring processes," Justice Department Inspector General Glenn Fine said in a statement Tuesday.

According to the report, McDonald was assigned to the selection committee only weeks after having joined the Justice Department in late 2006.

In a Nov. 29, 2006 e-mail, McDonald had noted one candidate was unacceptable because he belonged to a "leftist" group, writing, "Poverty and Race Research Council actively works to extend racial discrimination through increased affirmative action and, while there, [the candidate] helped draft [a] document arguing that federal law requires recipients of federal funding to seek actively to discriminate in favor of minorities (racial, language, and health), rather than merely to treat all applicants equally."

In an instance, when Fridman noted his concerns, the report documented McDonald's criteria. "One candidate was at the top of his class at Harvard Law School and was fluent in Arabic. McDonald's written notations indicated that she had concerns about the candidate because he was a member of the Council on American Islamic Relations, and that she had placed the application in the questionable pile. Fridman said he wrote on the application that this candidate was at the top of his class at Harvard, and was exactly the type of person DOJ needed."

The review added how McDonald also used Internet searches, saying, "Fridman learned that McDonald was obtaining additional information about candidates on the Internet when he saw notations by McDonald providing information that was not contained in the candidate's application. When Fridman asked McDonald how she obtained the additional information, she told him she conducted searches on Google and MySpace, and read law review articles written by the applicants."

As the head of the approval process, Elston, when he was interviewed by the inspector general, "stated that he wished he had been 'more proactive and more protective of the department's reputation.'"

"...We concluded that Elston violated federal law and department policy by deselecting candidates based on their liberal affiliations," the report continued.

The report notes that, while both officials violated the law "because both McDonald and Elston have resigned from the department, they are no longer subject to discipline by the department for their actions." Elston might have been influential in deciding which prosecutors would be dismissed.

According to the inspector general, McDonald declined to be interviewed by the inspector general and resigned from her Justice Department job the day before her interview with the inspector general was to take place.

McDonald had been hired by Monica Goodling, who served as counselor to Gonzales, and was a central figure in the controversial plan to fire the U.S. attorneys last year, which resulted in Gonzales' resignation and the departure of many in the top ranks of the department.

Calls to McDonald were not returned Tuesday, and e-mails to Elston from ABC News were not returned.

Senate Judiciary Chairman Sen. Patrick Leahy, D-Vt., said the report "confirms our findings and our fears that the same senior department officials involved with the firing of United States attorneys, were injecting improper political motives into the process of hiring young attorneys. I suspect further reports from the inspector general will continue to shed light on the extent to which the Bush administration has allowed politics to affect -- and infect -- the department's priorities."

In response to the report, Attorney General Michael Mukasey said in a statement, "The Department overhauled its honors program and summer law intern program hiring processes last year, and I am pleased that the report remarked positively on these institutional changes. I have also made clear, and will continue to make clear, that the consideration of political affiliations in the hiring of career department employees is impermissible and unacceptable."