Bloomberg — Attorney General Michael Mukasey named a special prosecutor to investigate possible crimes arising from the Bush administration’s firing of nine U.S. attorneys.

Mukasey made the appointment after a blistering internal Justice Department report today said officials may have made false statements and obstructed justice in dismissals likely tainted by politics. The review said there should be further investigation by an attorney who can compel witness cooperation.

“The Justice Department has an obligation to the American people to pursue this case wherever the facts and the law require,” Mukasey said in a statement. He said the handling of the dismissals was “haphazard, arbitrary and unprofessional.”

The 2006 firings mired the Justice Department in scandal and led to resignations last year of many top agency leaders, including Mukasey’s predecessor, Attorney General Alberto Gonzales. Congress has spent more than a year investigating whether partisanship played a role in the ousters.

Gonzales had “an extraordinary lack of recollection about the entire removal process,” the report said. “Most remarkable” was his congressional testimony that he didn’t remember a November 2006 meeting in his conference room where he approved the dismissals.

“It is about time the baton gets passed to a prosecutor with the power to compel answers,” said Senator Charles Schumer, a New York Democrat who has helped lead congressional inquiries of the firings.

Today’s report, by the agency’s inspector general and ethics office, found “substantial evidence” that partisan politics played a role in removing several federal prosecutors.

Still, the investigators said there were “gaps” in their review because of the refusal of some important witnesses to cooperate, including former White House officials Harriet Miers and Karl Rove. The White House also didn’t turn over some documents requested by the Justice Department watchdogs.

“It is important to note that our report did not conclude that the evidence we have uncovered thus far establishes that a violation of any criminal statute has occurred,” wrote Inspector General Glenn Fine and Marshall Jarrett, head of the department’s Office of Professional Responsibility. “However, we believe that the evidence collected in this investigation is not complete and that serious allegations have not been fully investigated or resolved.”

Gonzales’s attorney, George Terwilliger, said the report confirms his client “engaged in no wrongdoing” and “provided Congress with a truthful account of his knowledge and involvement.”

Mukasey named Nora Dannehy, a career prosecutor and acting U.S. attorney for Connecticut, as special counsel. He said the report “leaves some important questions unanswered” though “many of the most disturbing allegations” have been put to rest.

Mukasey directed Dannehy to assess the facts in the report, conduct further investigation as needed and determine whether any prosecutable offenses occurred in connection with the firings or testimony about them. He told her to give a progress report within 60 days.

Today’s report concluded that Gonzales and his Deputy Attorney General Paul McNulty “abdicated their responsibility to safeguard the integrity and independence” of the Justice Department by failing to oversee the firings, the report said.

Investigators said Kyle Sampson, Gonzales’s chief of staff, was the one most responsible for conceiving the plan to fire the prosecutors and selecting who should go. Once the ousters became public, the report said, Sampson downplayed his role and misled the White House, members of Congress and Justice Department officials.

“Most troubling” was the firing of New Mexico U.S. Attorney David Iglesias after Republicans and party activists complained to Bush administration officials, the report said. Republicans accused Iglesias of failing to bring voter fraud and public corruption cases in the weeks leading up to the 2006 elections.

Investigators said they couldn’t determine why Seattle U.S. attorney John McKay was dismissed, noting there is evidence he may have been targeted because of complaints from local Republicans about his handling of voter fraud probes. The main reason given for McKay’s firing was his clash with McNulty over a law enforcement information-sharing program.

Kansas City U.S. Attorney Todd Graves was removed after complaints from Senator Christopher Bond, a Missouri Republican, the probe found. Graves refused to intercede in a conflict between Bond’s staff and aides to Graves’s brother, Sam, a Republican congressman from Missouri.

Another U.S. attorney, Bud Cummins of Arkansas, was pushed out to provide a job for Timothy Griffin, a former aide to Rove, investigators said.

The report said two U.S. attorneys, Kevin Ryan of San Francisco and Margaret Chiara of Grand Rapids, Michigan, were fired for “reasonable concerns” about their performance. U.S. Attorney Daniel Bogden of Las Vegas first appeared on a list of candidates to be fired after a complaint that he wouldn’t assign a prosecutor to work on a case for the Justice Department’s task force for obscenity prosecutions, the report found.

Also, investigators said that they found no evidence that Carol Lam, the chief prosecutor in San Diego, was dismissed because of her handling of public corruption cases. The office successfully prosecuted ex-Republican Representative Randy “Duke” Cunningham.

Arizona U.S. Attorney Paul Charlton wasn’t fired for his office’s prosecution of Rick Renzi, a Republican congressman, the report concluded.