A government request to transfer terrorism suspect Jose Padilla from military to civilian custody was rejected by an appeals court that said the administration's shifting tactics in the case threatens its credibility with the courts.

The three-judge panel of the Richmond-based 4th U.S. Circuit Court of Appeals also refused on Wednesday the administration's request to vacate a September ruling that gave President Bush wide authority to detain "enemy combatants" indefinitely without charges on U.S. soil.

Click here to read the 4th Circuit's ruling. (FindLaw pdf)

The decision, written by Judge J. Michael Luttig, questioned why the administration used one set of facts before the court for 3 1/2 years to justify holding Padilla without charges but used another set to convince a grand jury in Florida to indict him last month.

Luttig said the administration has risked its "credibility before the courts" by appearing to try to keep the Supreme Court from reviewing the extent of the president's power to hold enemy combatants without charges.

Padilla, a former Chicago gang member, was arrested in 2002 at Chicago's O'Hare Airport as he returned to the United States from Afghanistan. Initially, then-Attorney General John Ashcroft alleged Padilla planned to set off a radiological device known as a "dirty bomb."

The administration argued before federal courts in New York and Virginia that Padilla should be held without charges because he had come home to carry out an Al Qaeda backed plot to blow up apartment buildings in New York, Washington or Florida.

Last month, a grand jury in Miami charged Padilla with being part of a North American terror support cell that allegedly raised funds and recruited fighters to wage violent jihad outside the United States.

Administration lawyers immediately asked the appeals court to transfer Padilla from a U.S. military brig in South Carolina to the custody of law enforcement authorities in Miami.

Luttig said the Supreme Court must sort out Padilla's fate, either by accepting or rejecting an appeal by his lawyers of the appellate court's decision in September that the president has the authority to order his detention indefinitely.

Tasia Scolinos, a Justice Department spokeswoman, said the agency is disappointed by the appellate court's decision. She said the government should be able to charge suspected terrorists with crimes, as well as hold them indefinitely as enemy combatants.

"The department is in the process of reviewing the court's order and will continue to consider all options with respect to pursuing the criminal charges as expeditiously as possible," Scolinos said.

Padilla's attorney, Donna Newman, said she had "little to add" to what Luttig had written. "He says things better than I," she said. "I just hope that it's an incentive for the Supreme Court to grant our petition ... and hear this matter, which is of extreme public importance."

Luttig also chastised the administration for failing to explain why it is using a different set of allegations against Padilla and forcing the appeals court to rely on media reports about the government's motivations.

The appellate judge pointed out that anonymous government officials were quoted in news reports saying Padilla was charged in Miami because the administration didn't want the Supreme Court to review the appeals court's September decision.

In a filing with the appeals court, the administration said it was willing to walk away from that ruling — considered a major victory for its legal war on terrorism — to justify its argument before the Supreme Court that Padilla's appeal is now irrelevant.

Luttig said the administration's actions leave the impression that Padilla has been held "by mistake," and that its tactics could prove costly.

"These impressions have been left, we fear, at what may ultimately prove to be a substantial cost to the government's credibility before the courts, to whom it will one day need to argue again in support of a principle of assertedly like importance and necessity to the one that it seems to abandon today," he wrote.

"While there could be an objective that could command such a price as all of this, it is difficult to imagine what that objective would be."