This is a rush transcript from "Glenn Beck," June 15, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: I want to show this to the members of the press corps that might be watching right now. It's called the Pulitzer Prize. People like you at The New York Times could win one. I'll show you how. I want to tell you about a story that is coming out of Washington that you probably haven't heard anywhere.

Byron York, he is the chief political correspondent for The Washington Examiner — is here to explain.

Byron, can you tell me what happened on Thursday night in Washington?

BYRON YORK, WASHINGTON EXAMINER: It was a very strange event. There are officials called inspectors general at all the federal agencies. And their job is to investigate allegations of stolen money, misspent money, fraud, other things like that. Because they do what they do, they often run afoul and irritate their bosses or politically appointed. They sometimes irritate the White House.

Video: Watch Beck's interview

So, because of all that, Congress gave them special job protections. There was a law passed last year that said, if the president wants to fire an inspector general, he has to give Congress 30 days notice and he has to tell them why he is doing it. What happened last —

BECK: Wait, wait. I want to make sure I have that law. That's a new law?

YORK: Well, you know, it was passed in 2008, and one of its cosponsors was, as a matter of fact, Senator Barack Obama.

BECK: Oh, wow. OK.

YORK: What happened —

BECK: So, wait, what — what does it say again? Thirty days notice and you have to let Congress —

YORK: Thirty days notice and cause. He has to give Congress the reason why he is firing this inspector general.

BECK: OK. Well, that sounds like a good plan. You don't want anybody to intimidate the inspectors general. You want to be able to make sure —

YORK: Exactly. You want — you want to protect them from political retribution.

BECK: Sure.

YORK: So, you've heard of the AmeriCorps program, which is the big national service program, just got a huge tripling and a huge $5.7 billion bill a couple of months ago.

There is the inspector general for the AmeriCorps program. And he got a phone call last Wednesday evening and it was from the White House Counsel's office. And the White House Counsel's office told him that he had one hour to either resign or be fired.

Now, he is an inspector general, covered by all these protections, and they told him you got one hour to resign or you're out.

BECK: Did he resign?

YORK: He did not. He refused and what happened was the next day, Congress — the president did inform Congress of his intention to fire this inspector general, but he didn't give a reason. He sort of — the president sort of suggested there might be a reason.

And what we know right now is that this inspector general did a rather controversial investigation of a friend and political supporter of the president, a man named Kevin Johnson, former NBA star who is now the mayor of Sacramento, California.

And before he was mayor, Johnson had a non-profit group for children called St. HOPE, and there were allegations that Johnson had misused thousands and thousands of dollars in federal AmeriCorps grants.

And the inspector general, whose name is Gerald Walpin, investigated and found out that it was true — that Johnson had used this money to have AmeriCorps employees wash his car and run personal errands for him and all sorts of stuff.

So, Johnson did an investigation — excuse me, Gerald Walpin, the inspector general, did an investigation and confirmed all of these things. And his report made a number of people high up in the organization very unhappy.

BECK: Because Obama is a friend of Johnson, right?

YORK: He is, indeed. Johnson is a supporter of the president and has made jokes about, you know, playing basketball with the president. Of course, Johnson was a big NBA star.

BECK: You know, I'll tell you, Byron, thank you, great reporting in The Washington Examiner. And hang around, because I actually want you to further this story for us tomorrow.

I wish I had a chance to — oh, my gosh, I do have a chance, to talk to the guy who was terminated.

Gerald Walpin is with us now. How are you, sir?

GERALD WALPIN, FMR. INSPECTOR GENERAL: I am fine. Thank you, and glad to be here.

BECK: OK. I read this story. You were in your car. You get a phone call from the White House.

WALPIN: Yes.

BECK: Any idea that they were going to ask you to resign?

WALPIN: No, because I thought they were calling me — I thought the White House had called me already three, four times already in the last two weeks, because I happened to be — you might disagree with this — a supporter of Sonia Sotomayor, even though I'm conservative.

BECK: OK.

WALPIN: And they had asked me for help on that and to support her, and I was doing that. So, I thought this was the same phone call.

BECK: OK. And you — you are a conservative.

WALPIN: Yes.

BECK: But you're not — I mean, obviously, you're endorsing Sotomayor, so you're — you know, you're an open-minded guy and you have gone after Republicans in the past?

WALPIN: Oh yes, I have.

BECK: Who have you gone after?

WALPIN: Well, I prosecuted Roy Cohn, for example. I was also disclosed as the person responsible for the indictments against Nixon's Cabinet members Mitchell and Stans.

BECK: So, you're not a — you're not a Republican hack or anything like that?

WALPIN: Well, I believe when I'm doing my work, I call the cards as they come out.

BECK: OK. So, gosh, he hasn't given you a reason on why you have been terminated.

WALPIN: No.

BECK: I have read the letter. It doesn't — it just does — it says it just basically that he doesn't have faith in you.

WALPIN: Well, that's a conclusion. That's not a reason.

BECK: Now, you not only went after one of his good friends, Kevin Johnson, but you're after going after CUNY, which is City University of New York.

WALPIN: Which is a good university — and, in fact, I'm an alumnus of it — and is doing a good job in getting teachers.

But the problem is, the AmeriCorps people have put almost $80 million into that program, even though the teachers at CUNY agree to be teachers before they're even told that there is an opportunity to make some money by joining AmeriCorps.

BECK: So, your job, as I understand it, is to track down money that is being wasted or is being misused.

WALPIN: Exactly.

BECK: My tax dollars, Erin's tax dollars, everyone's tax dollars.

WALPIN: That is correct. The AmeriCorps program and the other agency programs and services I believe are great as long as they are properly managed and the money is not abused or misused.

BECK: Why do you think this is happening?

WALPIN: I can only say that I became a thorn in the side of someone, and because I was doing my job and I was fired for doing my job.

And by the way, the investigation, for example, of Johnson, was started by the agency itself. AmeriCorps management called us and asked us to investigate reports they had heard that there was wrongdoing, and we...

BECK: Were you ever pressured to stop it?

WALPIN: No.

BECK: Were you ever...

WALPIN: No.

BECK: Did anybody — I mean, what makes you think...

WALPIN: The only thing — the only thing that had came up was after Johnson was elected mayor, after the stimulus money came in, there was great media and political pressure to get him off the hook and get his suspension lifted.

BECK: This happened on Thursday. Do you remember the case when...

WALPIN: Wednesday night.

BECK: Wednesday night. Do you remember the case when George Bush fired those attorneys which he had the right to do?

WALPIN: They were serving at his...

BECK: At his discretion.

WALPIN: ...discretion.

BECK: Yes. You are not serving at the president's discretion.

WALPIN: Only he can — under the statute which is intended to protect the independence of inspector generals, I could be terminated only if he gives 30 days advance notice and gives the reason for it to Congress.

BECK: Got it. So, it's all open and everybody knows.

WALPIN: That's correct.

BECK: Right. OK. That way you are truly independent.

WALPIN: Yes.

BECK: Because if somebody doesn't — if somebody doesn't — if somebody can put pressure on you, well, then, you're no good to anybody.

WALPIN: That is correct.

BECK: OK. So...

WALPIN: And by the way, the fact that pressure was placed on me and that I was terminated is going to have a chilling effect on all the other inspectors general.

BECK: Why do you say that?

WALPIN: Because they know that if they do something wrong to somebody who is liked by somebody else or for whatever reason, they can be terminated, too.

BECK: Are you familiar with RAT, the new thing under the stimulus package?

Is Byron still on with us? Byron?

YORK: Yes, here I am.

BECK: Can you explain RAT — the thing tucked into the stimulus package that no one wants to claim now?

YORK: This is a Recovery Accountability and Transparency board. And, you know, one of the things Democrat sponsors of the $787 billion stimulus bill did was promised it would all be transparent and there would be a lot of accountability. So, they created this new board.

The problem was the board was given the power to tell inspectors general to conduct an investigation or probably, more importantly, to not conduct investigations.

Senator Charles Grassley, who is the Republican senator who is kind of a guardian angel of inspectors general got very concerned about that and made some noise about it, but couldn't stop it from being in the bill. So, there is possibly another threat to the independence of inspectors general.

BECK: What do you think about that?

WALPIN: I now know what you were talking about, and that's a horrible provision in the statute.

BECK: Why would they do it?

WALPIN: Why? I think, in view of the fact that they terminated me, that they don't want inspectors generals doing the job that they were hired to do — which is to objectively look at the facts and determine whether there is waste, fraud and abuse.

BECK: How long you been in government?

WALPIN: On this stint? Just 2 1/2 years.

BECK: How long total? I mean, you...

WALPIN: Oh, I've been — I was a prosecutor in the U.S. Attorneys Office in New York, where, as I said, I prosecuted Roy Cohn, and I — so, I have had over 10 years of government service, but I was in private practice when President Bush's White House called me.

BECK: Have you seen anything like this before?

WALPIN: No. This is shocking. I know of no other inspector general who has been terminated on this method, and the call to me — look, as you can tell, I'm not a young guy and I didn't need this. But I felt that I couldn't look myself in the mirror if I just resigned to this pressure.

BECK: What's your next step?

WALPIN: Oh, I'm considering all alternatives. And what I think is most important is that the public know, because as Franklin Roosevelt said, the great — sunshine is the greatest...

BECK: Yes.

WALPIN: What was the word?

BECK: I know what you're saying...

WALPIN: Disinfectant!

BECK: Yes.

WALPIN: I want the public to know and I want other inspectors general to know that they can stand up, too.

BECK: Thank you, sir.

WALPIN: Thank you.

Content and Programming Copyright 2009 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.