Today in Albuquerque, New Mexico, after a few final fits and starts, federal prosecutors closed the book on a case once widely touted as the biggest spy scandal since the Rosenbergs, and concluded what can only be considered one of the more embarrassing and shameful chapters in the history of federal law enforcement.

Days ago U.S. Attorney Norman C. Bay successfully sought to prevent accused nuclear weapons scientist Wen Ho Lee from being released on bail, telling a circuit court judge that Lee’s release would represent “an unprecedented risk of danger to national security.”

Today Lee walked out of prison with no restrictions whatsoever, after being held in solitary confinement since last December. And the same federal prosecutors stood before the media and pronounced themselves happy with the result. Case closed. Job well done.

U.S. District Judge James Parker, however, was hardly so generous in his appraisal of the their work. “I sincerely apologize to you,” Parker told Dr. Lee in remarks from the bench, “for the unfair manner in which you were held in custody by the executive branch.” And the judge went on to level against the government a verdict which could scarcely have been more scathing. The Departments of Energy and Justice, Parker said, “have embarrassed our entire nation and each of us who is a citizen of it.”

Under the plea agreement, Lee pled guilty to one felony charge of mishandling government secrets, and was sentenced to time served — some nine months behind bars. In addition, Lee pledged to cooperate with government investigators and, particularly, to tell them just what became of the tapes he used to download the top-secret data.

Thus, apparently, ends a case which ramified far beyond the confines of the courtroom, roiling the nation’s politics for more than a year, and leaving many in the media splattered with mud.

The case first erupted into public view on March 6, 1999, when Jeff Gerth and James Risen of the New York Times reported that China had stolen top-secret American technology used to miniaturize nuclear warheads. Though the thefts had taken place as long ago as the mid-1980s, Gerth and Risen further alleged that the U.S. Justice Department had been slow to press the investigation.

Two days later Lee was abruptly fired from his job at New Mexico’s Los Alamos National Laboratory by Energy Secretary Bill Richardson. And months after that, on December 10, 1999, Lee was arrested and charged with offenses which, if proven, would have earned him life behind bars several times over. From the moment the New York Times broke the story, the case was quickly swept into congressional Republicans’ effort to tar the Clinton administration over its China policy.

Despite the uproar, the government’s case against Lee was an ever-dwindling thing from the start. Claims of espionage were succeeded by charges that Lee had mishandled government secrets with an unknown, but nefarious, purpose. Now it turns out that that purpose was apparently not nefarious enough to garner Lee even 12 months in prison.

Now the real questions that remain have less to do with the narrow legalities of this case than the broader plume of political hysteria it ignited. For more than three years Republicans have been pressing the scandal stemming from campaign finance violations in the 1996 presidential campaign. The Lee case became the centerpiece of a tangled web of charges that the Clinton administration had either been soft on Chinese espionage or even willfully transferred American secrets to Chinese agents in exchange for a few hundreds of thousands of dollars of campaign contributions.

Before the Lee case ever came to light, Newt Gingrich had already charged that President Clinton “had approved turning over missile secrets to the Chinese.” Rep. Dana Rohrabacher, R-Calif., chairman of the House Space and Aeronautics subcommittee, claimed the president “betrayed the interests of our country,” and Rep. Charlie Norwood, R-Ga., charged that Bill Clinton was “guilty of high treason.”

Once the Lee case came to light, the media, and particularly the New York Times, picked up the story and ran with it, blaring charges that it was the most serious instance of nuclear espionage since the Rosenbergs. The accusations about Chinese spying and Clinton administration involvement seeped into contemporary political folklore. As recently as Monday, in a Washington Post article describing voters’ opinions about the presidential race, a Michigan voter tells Post reporter Tom Edsall that Gore “scares the hell out of me. I think he and his boss are in bed with the Chinese — They’ve sold their souls.”

But the Lee case was more than a morality play about evil Republicans eager to politicize the case for partisan gain. There was plenty of blame to go around: The coverage of the case in the mainstream press was shameless and lazy. And few in the Clinton administration were willing to remain firm in the face of the unfolding media firestorm. Particularly blameworthy, in retrospect, was Energy Secretary Bill Richardson, who fired Lee two days after the Times story ran and awarded one of his principal accusers, Energy Department counter-intelligence investigator Notra Trulock, with a $10,000 bonus for a job well done. Lee is no hero in this whole mess. But Richardson’s actions were no more than reckless grandstanding.

It’s worth asking now whether those in politics and the media who hyped and sensationalized the story in the first place now question the larger political hysteria to which the case gave rise. But the real import of the Lee case transcends politics and any assignment of blame to particular persons. It’s about the ricketiness of our own political culture and the rapidity with which hysteria can infect not only political life but the judicial system as well.

We rightly treat the McCarthy era as an object lesson in the perils of political witch hunts and the fragility of civil liberties in moments of national crisis. Yet, in the early 1950s the United States really was endangered. The Cold War was real. This doesn’t excuse the villainies and excesses of those days. But it at least provides some mitigation and context for those who threw the baby out with the bath water. What’s our excuse today?

Lee isn’t quite out of the woods. Prosecutors retain the right to prosecute Lee if polygraph tests say he’s not telling the whole truth. In the words of the Washington Post’s Walter Pincus, who first reported many of the key developments in the case, “He’s home, but he’s not home free.”

The government now says, and the argument should not be too easily dismissed, that the sentence Lee received cannot be taken at face value. Punishment is not the government’s only priority. Finding out what actually happened is often more important, and this deal allows them to do just that. (The federal government will sometimes just sit on damning evidence and let a spy go free, simply to avoid exposing top-secret information; it’s happened before.).

But given the government’s record, and the judge’s stinging words, in this case there’s an uglier, more probable, explanation: The government never had much of a case to begin with. And after a year of chest-thumping and bluster, instead of having the good grace to admit they were wrong, they forced Lee to plead to a felony as the price for getting out of jail.

The cloud that’s been hanging over New Mexico Gov. Bill Richardson recently, and cost him his shot at being Commerce secretary, appeared to be lifted yesterday. That’s when the Associated Press broke the news that Richardson won’t face charges stemming from a federal probe of pay-to-play allegations. Now, the cloud is back.

On Thursday, a Richardson spokesman, Gilbert Gallegos, took a little victory lap, saying in a statement that the governor is “gratified that this yearlong investigation has ended with the vindication of his administration.”

New Mexico Gov. Bill Richardson appears to have successfully weathered the federal investigation that cost him a spot as secretary of Commerce. The Associated Press reports that Richardson and former top aides will not be charged in the investigation, which was looking into an alleged pay-for-play scheme.

Decisions about charging high-ranking political figures are generally made in consultation with main Justice back in Washington, D.C., which typically has final say. That appears to be what happened here, as the AP reports the decision “was made by top Justice Department officials.” The AP’s source doesn’t appear to be happy about it, saying, “It’s over. There’s nothing. It was killed in Washington.”

Update: Clinton’s mission was successful, and Kim Jong Il has pardoned the two journalists. See this post for more.

In a surprise visit, former President Bill Clinton arrived Tuesday in Pyongyang, North Korea, to meet with the isolated nation’s leader, Kim Jong Il. While North Korea’s nuclear program and recent spate of missile tests have caused growing consternation around the world, the main purpose of Clinton’s trip was to negotiate for the release of two U.S. journalists currently imprisoned there.

President Obama struck out with his first two picks for Commerce secretary, as both New Mexico Gov. Bill Richardson and Sen. Judd Gregg (R-N.H.) withdrew their nominations for the post. Now, he’s reportedly hoping to do better with a fairly obscure choice — former Washington Gov. Gary Locke.

Locke, who left in office in 2005, served two terms and opted not to run for a third; he was the first Chinese-American governor in U.S. history.

One day after the sudden announcement that New Mexico Gov. Bill Richardson’s nomination to be commerce secretary was being withdrawn, Richardson offered additional details during a press conference. It did not go off without a hitch.

Richardson maintained that the decision to withdraw was his, and said he came to make that choice because an investigation into state contracts given to CDR Financial Products Inc., whose president is a Richardson donor, had gone on longer than he expected it to — he’d hoped it would be done in December, removing the cloud from over his head before confirmation hearings were to begin. The governor said, as he had in a statement on Sunday, that the country couldn’t afford any delay in confirming a new head for the department. “Sometimes your own dreams and plans must take a back seat to what is best for the nation,” he told reporters.