Officials at the Department of Homeland Security are investigating the reinstatement of a top political appointee to the agency who was briefly suspended for failing to disclose ties to a controversial Islamic organization, FOXNews.com has learned.

Faisal Gill, director of policy for intelligence at DHS, was forced to take a few days off in March after sources close to the FBI raised flags about Gill's former position as spokesman for the American Muslim Council.

The now-defunct American Muslim Council ( search) was founded in 1990 to lobby Washington for the interests of American Muslims and had been involved in community activism to that end. AMC was established and headed by Abdurahman Alamoudi ( search), who was indicted in 2003 on passport fraud and illegal finance activities with Libya.

Court documents call Alamoudi an active supporter of Hamas (search), which the U.S. State Department considers a terrorist organization, and an official in an international charity group run by Usama Bin Laden's nephew. Alamoudi recently told federal officials he was part of a plot to assassinate King Abdullah of Saudi Arabia.

According to a report first published last month by Salon.com reporter Mary Jacoby, Gill omitted his role with the American Muslim Council when he filed his employment application and requisite security clearances at the agency. Gill left off his "Standard Form 86" that he served as AMC’s spokesman in 2001.

Homeland Security officials refused to comment on the report, but a spokeswoman for the department's internal watchdog told FOXNews.com that Inspector General Clark Kent Ervin is “looking further into the issue” of Gill's employment at the department.

“He’s taking it seriously,” said Tamara Faulkner, who would not confirm what kind of probe was being undertaken, but said reports of Gill’s re-instatement in light of his sensitive security position and failure to disclose a past affiliation with the AMC was at the heart of it.

“I don’t know where it is at this point,” she said.

Capitol Hill sources as well as other sources close to the FBI confirmed Gill's alleged omission of his ties to AMC led to his temporary removal from his post at Homeland Security. They added his employment there continues to be a source of curiosity.

According to sources close to the FBI, Gill, who also was director of government affairs for the Islamic Free Market Institute ( search) in Washington, D.C., was reinstated at DHS after a thorough background check.

Gill's reinstatement has raised questions because of his link to Alamoudi, who was once a paid consultant of the U.S. State Department hired to forward the interests of Muslim, Jewish and Christian reconciliation. Soon after the Sept. 11, 2001, terror attacks, a videotape surfaced featuring Alamoudi fueling an anti-Israel rally in front of the Clinton White House in 2000 and declaring support for Hamas and Hezbollah terrorist organizations.

Gill did not return phone calls or e-mails for comment.

Concern on Capitol Hill

Lawmakers and political observers are expressing concern about men with such ties being given access to high-level positions in the White House, and Gill's employment at Homeland Security has invigorated a smoldering debate among Republicans.

“If a person worked in any capacity for the American Muslim Council, that had to be disclosed; it’s unconscionable not to disclose that if you are going to work for the Department of Homeland Security,” said Rep. Peter King ( search), R-N.Y, who serves on the House Homeland Security Committee and recently published the Sept. 11-inspired novel, "Vale of Tears."

“The fact that he didn’t disclose this I think raises some serious questions, if anything, about his judgment,” King told FOXNews.com.

President Bush began working with the Muslim community in 2000, when Islamic Free Market Institute co-founder Khaled Saffuri organized a meeting between Muslim leaders and then-Gov. Bush's presidential campaign. According to the group’s Web site, the meeting helped set a tone of understanding between the two sides.

After the Sept. 11, 2001, terrorist attacks, the institute said it worked with the White House on issues sensitive to the Muslim faith, including the use of secret evidence against Muslim immigrants. Immediately after Sept. 11, Bush reached out to the community as a sign that the administration does not hold all Muslims accountable for terrorism. The president visited mosques during key holy days and included Muslims in interfaith celebrations at the White House.

Supporters of the president — including Frank Gaffney ( search), head of the Center for Security Studies — say they are worried that in his genuine interest to reach out, the president might be tapping the wrong people and wrongly giving access to some Muslim groups, particularly those that have proven ties to extremists, and in some cases, terrorist organizations outside the United States.

Aside from Alamoudi, former American Muslim Council director Eric Vickers has been criticized for testifying on behalf of Sami Al-Arian ( search), the former University of South Florida professor now under federal indictment. Vickers spoke for Al-Arian during the professor's 2003 bond hearing and defended him on FOX News’ "The O’Reilly Factor." He also refused to admonish anti-Israel terrorist organizations.

Gaffney also criticized FBI Director Robert Mueller, who spoke in June 2002 at the AMC’s 11th annual conference. Gaffney said groups like the council wrongly peddle themselves as moderates seeking to help forge Islamic-American relations, but are actually hurting the administration's opportunities to connect with true moderate interests in the Muslim community.

“It appears to me that this fellow Faisal Gill is an example of the more potentially dangerous part of ‘influence operations’— the placement of these individuals in the administration,” he told FOXNews.com.

Gill Tied to Republican and Islamic Groups

According to a former federal counter-terrorism official who asked not to be named, Gill had a brief non-defense/intelligence-related background with the federal government after graduating from law school and joining the Naval Reserves in 1997. Press releases available on the Internet also show Gill quoted as a vice-chairman of the Prince William County Republican Committee in Northern Virginia, a post he apparently no longer holds, as well as treasurer of the Prince William Taxpayers' Alliance in 2003.

Gill, 32, worked at both the American Muslim Council and the Islamic Free Market Institute, which was co-founded by prominent Republican activist and lobbyist Grover Norquist ( search) and Saffuri, who also worked as AMC's government affairs director.

In 1999, Alamoudi contributed at least $10,000 to the Islamic Institute but the money was reportedly returned. The institute now shares an office suite with Norquist’s Americans for Tax Reform ( search).

The Salon.com article calls Gill a "protégé" of Norquist, who, according to the institute's Web site, in 1998 helped to establish the Islamic Institute with Saffuri as a way to forward American Muslim economic development and cultural understanding.

Norquist refused to comment to FOXNews.com about Gill's standing at Homeland Security or his employment at the Islamic Institute.

Gaffney has been a big critic of Norquist, who has strong ties with the Washington D.C. Muslim community as well as tight connections with White House insiders like Karl Rove, President Bush's chief political strategist. Gaffney said Norquist has helped Gill and others tied with dubious groups gain unprecedented access to the White House and administration.

“It’s downright troubling,” Gaffney said. “It seems to me exceedingly unlikely that someone who has no background in intelligence could nonetheless become the policy director in the Department of Homeland defense intelligence operations unless someone is pulling some pretty big strings.”

Norquist on Gaffney: 'He Smears People'

Gaffney’s criticisms have drawn the ire of Norquist, who stands behind his assertion that Gaffney and others paint all Muslims with a broad, bigoted brush.

“[Frank] trashes, by name, young Muslims who work in the White House, who have a higher security clearance than he ever will in the rest of his life, and goes after them and calls them names on things he knows aren’t true,” Norquist said in a Fox News Channel appearance last year after publications began writing about the growing feud between Norquist and Gaffney, both prominent conservatives.

Norquist also asserted that all new appointments to the administration are properly vetted, and they all don’t come with his personal recommendation.

“That’s why people are unhappy with Frank [Gaffney] and he has lost his reputation, because he smears people one after the other,” he said.

One of the groups that Gaffney has fingered for having extremist ties is the National Coalition to Protect Political Freedom ( search), which has been working with Norquist and civil liberties groups long before Sept. 11 to rally against the use of secret evidence in federal cases against non-citizens.

Defenders of the group say Muslim organizations and conservatives found common cause on the issue of secret evidence, and they staunchly reject claims of Gaffney that they are extremists seeking to influence the White House.

"There are always going to be people who are racist, who are anti-Muslim and feel threatened by groups like ours who do coalition work, because we stand up for groups that have taken on unpopular positions," said Kit Gage, president of the National Coalition to Protect Political Freedom.

Gage said persons even vaguely affiliated with pro-Muslim groups have been linked to, or arrested in connection with terrorist-related activities. Often, she said, no convictions come about, but Gaffney and others start rumors and innuendo that create a sense of guilt by association.

Al-Arian, founder of Gage's group, was indicted in 2003 on charges that he was a prime fundraiser for the Palestinian Islamic Jihad ( search), a group the U.S. considers a terrorist organization. The case is awaiting a January trial.

Gage said her group distanced itself from al-Arian shortly after his arrest. As for the AMC, she said she proudly worked with them to improve American and Muslim relations. "All the work I ever did with that organization had to do with very straightforward advocacy for American Muslims," she said.

As for Gill, Gage said she had no personal knowledge or affiliation to him, but added, "I don’t think working for an organization like the AMC in of itself is a bad thing."

King and others say nothing is wrong with making sure groups that say they are lobbying in Washington are doing so for positive reasons, and not with ulterior motives. Too often, a "politically correct" desire not to offend Muslims gets in the way of common sense, said King.

"I think the political correctness factor goes right across the board," he said. "The media, and opinion-makers in general, they are reluctant to criticize these Muslim organizations."

David Horowitz, a conservative author and director for the Center for the Study of Popular Culture (search) in Los Angeles, said he is has been following the issue of Muslim outreach in Washington for the last several years and believes that critics like Gaffney are on to something. He rejects criticisms that Gaffney is a racist and bigot and said it is important to take a step back and ask the right questions.

Horowitz told FOXNews.com he has only followed the Gill story from afar, but the fact that Gill is still working at Homeland Security shows the administration is perhaps not performing due diligence.

"I think this is a very legitimate and very important story to pursue if only that it might make Homeland Security more careful about what they do."