An independent federal investigation has determined that former U.S. Attorney Rachel Paulose retaliated against the No. 2 person in her Minneapolis office after he filed a complaint that she had mishandled classified materials.

The announcement by the Office of Special Counsel in Washington on Wednesday appeared to be a full vindication of John Marti, the first assistant U.S. attorney, who resigned his management position in 2007, along with two other top lawyers in the Minneapolis office.

Marti, who continues to work as an assistant U.S. attorney, reached a financial settlement with the Justice Department. Any negative references will be removed from his personnel records. He had filed a complaint under the Whistleblowers Protection Act.

The finding, by acting Special Counsel William Reukauf, caps two years of near-constant turmoil in the local U.S. attorney's office over Paulose's policies and management style. The contention pitted many of the office's career attorneys and staff against Paulose, a political appointee of President Bush.

When the U.S. Senate approved her appointment in December 2006, Paulose, then 33, was the youngest U.S. attorney in the country and the first woman to hold the post in Minnesota. She resigned in November 2007 and was reassigned to a non-supervisory position in the Department of Legal Policy within the Justice Department in Washington, D.C.

Former U.S. Attorney Tom Heffelfinger said that complaints like Marti's are rare and that the very strong public statement from the special counsel was also unusual. "The press release is not good news for Rachel Paulose because it is very critical of her conduct as U.S. attorney," he said.