The House ethics committee is poised to pay a half-million dollars by year’s end to resolve the mess that remains of its three-year probe of Rep. Maxine Waters.

An outside counsel and private law firm will sort out how to handle the most substantive case on the committee’s plate this session, as the panel tackles more modest matters. Waters, a powerful California Democrat, and a former senior staffer on the committee have separately questioned the integrity of the panel’s investigation.

Since last fall, The Washington Post and other news media have reported that partisan squabbling between staff and committee members derailed the Waters probe by the end of 2010 and threatened other ethics cases. The allegations, first made against her in early 2009, center on whether Waters used her public office to help bail out OneUnited, a bank in which her husband had a significant investment.

A recent Politico story revealed many more details in an internal 2010 memo from the former committee staff director. In it, he accused the two investigators under his supervision of secretly sharing information about the case with only Republican members, including Rep. Jo Bonner (Ala.) the then-ranking member who has since become ethics committee chairman in the Republican House.

Bonner and the former chairman, Rep. Zoe Lofgren (D-Calif.), battled as the 2010 congressional midterm elections neared, with Bonner and two investigators claiming the chairman was going easy on Democrats.

Waters’s scheduled ethics trial in November 2010 was postponed amid the disputes. Both the staff director and the two investigators left the committee, with the case unresolved.

The new outside review of the Waters case is already underway and being led by respected defense lawyer Billy Martin. It aims to determine whether the committee so tainted the investigation that it must drop the charges. If Martin finds the case can proceed, and the ethics committee agrees, he and associates at his firm of Dorsey & Whitney would lead the revived probe.

When the committee’s new staff director, Dan Schwager, arrived in May he immediately reviewed the handling of the Waters case. In a private meeting the week of June 28, the committee agreed with Schwager’s proposal that the panel should hire outside counsel. Chief among the reasons was a lack of public trust in the process and Waters’s accusations that the committee had broken its own rules. Schwager, known as an even-handed counsel to the Senate ethics committee, has been well-received by committee members.

The committee announced Martin’s hiring July 20, and acknowledged that its conduct was the subject of “serious allegations.”

“The outside counsel’s review will . . . help assure all respondents and the entire House community of the integrity of the committee’s process for all matters,” the statement said.

Under his contract, Martin needs committee approval to release any information about the Waters probe and finish his initial review by Jan. 2.

Martin was among more than 20 top lawyers whom the committee considered. Finding a local lawyer with distance proved tricky. The committee had to strike many candidates because their firms had appeared before a key witness in the Waters case, Rep. Barney Frank (D-Mass.).

Frank formerly chaired the House banking committee and has said that Waters, a banking committee member, confided to him that OneUnited had come to her seeking help. Frank said he urged her to stay away because of the conflict with her husband’s bank stock.

A former federal prosecutor, Martin has handled a series of high-profile clients. He represented Monica Lewinsky and her parents during the investigation of President Bill Clinton, and also represented the parents of Chandra Levy, the murdered intern who had a clandestine relationship with her married boss, Rep. Gary A. Condit (D-Calif.).

Ethics watchdogs from both ends of the political spectrum praised the hiring of outside counsel, but they said the move makes clear that Congress is failing to properly police its own and sorely needs a new process.

“If there’s one thing to learn from all this it’s that the ethics system is not functioning properly,” said Ken Boehm of the conservative National Legal and Policy Center.

Craig Holman, of the liberal-leaning Public Citizen, said the committee members are “essentially admitting they cannot handle or perform their job.” Holman said both Waters and her accusers might face a harder look.

“Knowing Billy Martin and his superb ability to do his job, I suspect Maxine Waters is going to come under much closer scrutiny,” Holman said. “This could be a double-edged sword for Maxine Waters.”

Waters declined to comment.

In the first week of August, the committee had its first rumblings of activity, but mostly to clear members of wrongdoing and handle relatively minor matters. It dismissed the cases against Reps. Luis V. Gutierrez (D-Ill.) and Jean Schmidt (R-Ohio), and extended two cases that were holdovers from the previous congressional session.