David Smith, a top Interior Department official, is an avid hunter and outdoorsman. He's no Buffalo Bill, but he's a good shot and can even count a buffalo among his many trophies. Why, way back in December 2004, Smith put three shots from a high-powered rifle right between the eyes of an aging buffalo at a billionaire friend's ranch in Texas. Dances With Wolves, it was not. The ranch manager drove him to the meadow where the bison was grazing, and Smith delivered the coup de grace from about 75 yards away.

The kill has caused Smith no end of trouble. Interior investigators looked into it and questioned whether Smith had received the old bull's remains as a "gratuity." They also examined his role in designating Houston as a port of entry for wildlife and wild game trophies, an action sought by hunters and others, including a friend of Smith's who is his taxidermist.

Icon. When the dust settled, Smith got both good and bad news. Federal prosecutors declined the case. But Interior investigators found that he created "an appearance of preferential treatment" in signing off on the Houston port because the action benefited his friends, including the taxidermist. As to the buffalo, the investigators said, Smith violated gift regulations and paid for its remains only after they began their inquiry.

Smith denies giving special treatment to anyone or violating ethics rules. In an interview, he said that he had intended to pay for the buffalo remains all along and wrote checks for $3,170 as soon as the ranch billed him. Effective last week, Smith, 38, resigned as deputy assistant secretary for fish, wildlife, and parks, but his departure, he says, had nothing to do with the inquiry. He quit, he says, to start a law practice with a friend.

For decades, the image of the buffalo has served as the official Interior Department seal. Last year, in a bill designed to protect buffalo at Yellowstone National Park, lawmakers wrote that "more than any other animal, the American buffalo ... is a wildlife icon of the United States ...." The irony isn't lost on Smith, who joined the Interior Department in 2001 and whose wife is a White House official. "People can have a lot of fun," he says, "a lot of mischief with this."

Interior's inspector general, Earl Devaney, opened an investigation last June, according to a copy of his report obtained by U.S. News under the Freedom of Information Act. The inquiry was based on allegations from a fish and wildlife law enforcement officer who said that Smith had "inappropriately designated" Houston as a port to help his taxidermist friend import wildlife and wild game trophies into the country at a reduced cost. He also said Smith had killed a buffalo at a Texas ranch and accepted its remains as a gift.

Investigators determined that Interior followed "appropriate administrative procedures" in designating the port. But they sharply criticized Smith's role in the decision. Their report cited his ties to a taxidermist identified by Smith and others as Mike Simpson, who owns a big taxidermy outfit in Conroe, Texas, and does some of Smith's work on animal kills.