Obama appointed Babauta to the position in 2009, despite the position being filled by a career employee of the Interior Department over the past decade. In Babauta's resignation letter, provided by his attorney, he urges the Obama administration to continue presidential-level appointments to the position.

"That act alone was an important contribution to federal insular policy and relations. This renewed tradition of presidential political appointment should continue," Babauta says.

The departing official does not directly reference the investigation into his handling of the job in his resignation letter, but calls his tenure "a rewarding experience."

"My office has been able to continue our efforts in the islands to improve infrastructure, build professional capacity and respond quickly to any emergencies," he continues.