Gonzales deputy resigns from Justice Department

By David Alexander

WASHINGTON (Reuters) - U.S. Deputy Attorney General Paul McNulty, second-in-command to Attorney General Alberto Gonzales and caught in the firestorm over the firing of federal prosecutors, resigned on Monday citing family financial reasons.

In a letter to Gonzales, who faces his own calls to resign for the scandal over last year's controversial firings, McNulty said he was stepping down "on a date to be determined in the late summer."

McNulty is the third Justice Department official to resign since March as the Democratic-controlled Congress investigates a controversial department decision to fire eight of the country's 93 U.S. attorneys last year. A ninth federal prosecutors said last week he was pushed out as well.

The administration has insisted the decision was justified, though mishandled. Congressional investigators are attempting to determine if the firings were politically motivated.

McNulty testified that only the federal prosecutor in Arkansas was let go so the job could be given to a former White House aide, with the others fired for performance-related issues.

According to documents released by the Justice Department, Gonzales aides said that the attorney general was upset by McNulty's testimony on Capitol Hill in February.

When later information suggested otherwise, Gonzales said both he and his deputy were misinformed by top aides.

In his resignation letter, McNulty wrote, "The financial realities of my college-age children and two decades of public service lead me to a long overdue transition in my career."

Democratic Sen. Charles Schumer, who has been among those pressing the Senate Judiciary Committee investigation of the firings, used McNulty's resignation to criticize the administration.

"It seems ironic that Paul McNulty, who at least tried to level with the committee, goes, while Gonzales, who stonewalled the committee, is still in charge. This administration owes us a lot better," he said.

McNulty's resignation follows that of former Justice Department aide Monica Goodling, who abruptly resigned last month. Goodling, as counselor to Gonzales and Justice Department White House liaison, was involved in the prosecutor firings.

In March, Kyle Sampson resigned as chief of staff to Gonzales after acknowledging that he did not tell other department officials sooner about his dealings with the White House over the firings.

Gonzales praised McNulty's record of service.

"Paul is an outstanding public servant and a fine attorney who has been valued here at the department, by me and so many others, as both a colleague and a friend. He will be missed," the attorney general said, without mentioning the recent controversy.

At the White House, spokeswoman Dana Perino said, "The president greatly appreciates all that Paul McNulty has done on behalf of the American people. He's been a tireless public servant and he has a tremendous future in front of him."

(Additional reporting by Joanne Allen and James Vicini)