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* Arpaio: ‘I said all along I would be cleared in this case’

* Civil rights investigation of sheriff continues

* Second Arizona sheriff, accused by ex-lover, cleared of

wrongdoing

(Recasting; adds background, details on Babeu case)

By Tim Gaynor

PHOENIX, Aug 31 (Reuters) – Two tough-on-immigration Arizona

sheriffs with national profiles in the Republican Party were

cleared of criminal wrongdoing on Friday in unrelated probes,

though one remains accused of racial profiling and other abuses

in a pair of federal lawsuits.

The U.S. Attorney’s Office in Arizona said it had closed its

criminal investigation of alleged financial misconduct by

Maricopa County Sheriff Joe Arpaio, self-described as “America’s

toughest sheriff”, and was declining to bring charges.

But a separate U.S. Justice Department investigation and

lawsuit relating to alleged civil rights abuses by Arpaio’s

office, including accusations of widespread racial profiling in

his immigration enforcement, is continuing, federal prosecutors

said.

And a federal judge is expected to rule soon in a similar

suit brought against Arpaio, this one a class-action case by

five Hispanic citizens who claimed they were stopped by the

sheriff’s deputies because of their ethnicity.

Earlier on Friday, another Arizona lawman with national ties

to the Republican Party and a reputation for cracking down on

illegal border crossings, Pinal County Sheriff Paul Babeu, was

cleared of criminal charges by the state attorney general’s

office.

Babeu resigned as co-chair of Republican presidential

nominee Mitt Romney’s state campaign after allegations he

threatened a male lover with deportation but asked for the state

investigation of his conduct to clear his name.

Babeu acknowledged at the time he was gay and had a personal

relationship with his accuser, Jose Orozco, who was reported to

be from Mexico, but denied that he had made any threat to deport

him.

“The Attorney General’s Office will not file charges against

either Babeu or Orozco,” Solicitor General Dave Cole said in a

statement.

“The investigation determined that Babeu did not commit any

criminal violations and further concluded that, although Orozco

conducted himself in a manner that may constitute a violation of

the law, there was no reasonable likelihood of conviction or

anything more than a misdemeanor charge,” Cole added.

Babeu said in a statement that “the truth had won out in the

end”, and that he had been fully exonerated.

The decision on the Arpaio case marked the end of an

investigation that began in November 2010 at the behest of the

Maricopa County Board of Supervisors to examine alleged

financial improprieties by the county sheriff and his deputies.

A criminal inquiry into several of those matters was

concluded last summer with the U.S. Attorney’s Office in Arizona

declining to initiate charges.

‘MY PEOPLE ARE NOT CROOKS’

Maricopa County authorities were informed on Friday that

federal prosecutors had likewise declined to bring charges in

connection with two remaining allegations against the sheriff’s

office – that it had misused county credit cards and misspent

jail-enhancement excise taxes.

In addition, the U.S. Attorney’s Office declined to

prosecute two former officials of the county attorney’s office

who were accused of wrongfully prosecuting a local judge.

Assistant U.S. Attorney Ann Birmingham Scheel said in a

statement that her office “is closing its investigation into

allegations of criminal conduct by current and former members of

the Maricopa County Sheriff’s Office and the Maricopa County

Attorney’s Office”.

In a four-page letter to the county attorney elaborating on

her decision, Scheel wrote: “After careful review, we do not

believe the allegations presented to us are prosecutable as

crimes.”

Arpaio said he learned the case was dropped on his return to

Arizona from the Republican National Convention in Florida.

“I said all along I would be cleared in this case,” Arpaio,

looking tired, told reporters gathered at his office in downtown

Phoenix late Friday. “If I did something wrong, there would be

indictments floating around all over the place.”

He added: “My people are not crooks. They are trying to do

their job.”

Arpaio, 80, who is seeking re-election to a sixth term as

sheriff in November, has ignited controversy over his aggressive

enforcement of immigration laws and his politically charged, and

fruitless, pursuit of evidence questioning the validity of

President Barack Obama’s U.S. birth certificate.

He has been under a federal investigation since 2008 over

allegations that he and his deputies engaged in an extensive

pattern of civil rights abuses. That probe led the Justice

Department to file a lawsuit in May accusing the sheriff and his

office of racial profiling and unlawful arrests of Latinos in a

bid to crack down on illegal immigration.

The civil suit also accused Arpaio’s office of routinely

violating the constitutional free-speech rights of political

opponents by retaliating against them through unsubstantiated

legal action, including unlawful arrests.

A separate lawsuit accusing Arpaio and his deputies of

racial profiling went to trial earlier this summer, with the

sheriff denying under oath that his office ever arrested people

“because of the color of their skin”.

(Writing by Steve Gorman; editing by Peter Cooney, Mohammad

Zargham and Pravin Char)