The State Department says it reassigned an employee from its United Nations mission because of unsatisfactory job performance, denying it retaliated against her for calling attention to alleged U.N. waste and mismanagement.

The department's position in the case of Linda Shenwick, a former budget and administrative officer at the U.S. mission to the United Nations, was outlined in a letter to Sen. Charles E. Grassley (R-Iowa), a copy of which was obtained by the Associated Press Friday.

Grassley has defended Shenwick, contending the State Department decided to transfer her because she gave information to members of Congress. Such a transfer would violate a whistleblower protection law that Grassley sponsored. Shenwick's dispute with the department dates back several years.

Grassley has been holding up the nomination of U.N. ambassador-designate Richard C. Holbrooke in an effort to pressure the State Department to resolve the dispute. The letter, in a reference to Grassley's action on Holbrooke, said the Shenwick case should not be influenced by unrelated issues.

The letter was written by Barbara Larkin, the assistant secretary of state for legislative affairs, who said reassignment or demotion is required by law in cases where a member of the Senior Executive Service, such as Shenwick, receives an unsatisfactory job performance appraisal.

"The department has no authority to deviate from this requirement," Larkin wrote.

Following a review of the case by the department's Executive Resources Board, the department assigned Shenwick to a position here as director of acquisitions management. She had been the counselor for resources management at the U.S. mission to the United Nations.

Larkin disputed an assertion by Shenwick's lawyer that this is a "made-up job of ordering furniture." She called the position "key to the procurement of goods and services that are needed to support the department's worldwide operations." The position involves contracts valued at $900 million, she said.

Larkin wrote that the department "exerted considerable effort to try to reach an amicable settlement of Ms. Shenwick's complaint. In negotiations this spring, the department made good faith settlement offers that would have allowed Ms. Shenwick to remain in New York in career-enhancing positions."

The negotiations were unsuccessful, Larkin wrote.

Grassley has said Shenwick should be reinstated to her previous position in New York. But he added that he would settle for a "mutually acceptable" agreement between Shenwick and the State Department.