SACRAMENTO, Calif. — A nonprofit organization run by mayoral candidate and former NBA star Kevin Johnson used AmeriCorps grants to pay volunteers to engage in school-board political activities, run personal errands for Johnson and even wash his car, federal investigators say.

The findings from an agency that oversees the grants were sent to federal prosecutors and listed in a letter to Johnson dated Wednesday that also says he will be prohibited from receiving federal money while the investigation is under way. The Associated Press obtained a copy of the letter Friday.

Johnson said he will appeal the decision and believes the U.S. attorney's office will find no substantial wrongdoing.

"Rest assured, I will fight this tooth and nail," Johnson said Friday during a campaign event. "I am optimistic about the outcome."

He spoke after he and NBA star Shaquille O'Neal shook hands with youths at a Sacramento Boys and Girls Club. O'Neal made no comments during the brief event.

Johnson said his 19-year-old organization, St. HOPE, is a worthy program that has helped young people succeed at leading colleges.

For three years, St. HOPE received money through AmeriCorps, which provides college grants to people who volunteer for certain community service programs. He handed over management responsibilities for St. HOPE this year so he could focus on his campaign to unseat Sacramento Mayor Heather Fargo.

Investigators from the Corporation for National and Community Service say several jobs St. HOPE assigned to its volunteers fell outside the scope of the federal grants. They said those jobs included running errands for Johnson, washing his car, recruiting students to attend St. HOPE Academy, engaging in political activities related to a local school board race, traveling to New York to help promote an academy Johnson has opened in Harlem and performing cleaning duties.

"The evidence is adequate to suspect that you have committed irregularities which seriously reflect the propriety of further federal government dealings with you," William Anderson, who is in charge of suspensions for the corporation, wrote to Johnson.

The U.S. attorney's office in Sacramento said it had received a report from the corporation but would not discuss the case. Prosecutors will decide whether to file charges.

Bill Portanova, a former federal prosecutor who represents Johnson, said the allegations represented the opinion of one person and noted that the full report hasn't been vetted.

"We don't know what they're saying because we don't have it," Portanova said. "We do know, however, that volunteer organizations are staffed by people with good hearts and intentions. And, as a rule, are not accountants by trade."

Johnson's campaign issued a statement characterizing the problem as administrative errors.

The campaign also accused the corporation's investigation of being tainted. It cited 2005 news reports that its inspector general, Gerald Walpin, introduced Massachusetts Gov. Mitt Romney at a Washington luncheon as a head of state run by the "modern-day KKK ... the Kennedy-Kerry Klan." Johnson, a three-time all-star for the Phoenix Suns, is black.

The campaign suggested Walpin was using the case for publicity.

"We have said all along that there may have been administrative errors, much like the hundreds of other small nonprofits that have been investigated in the past," the campaign said. "We are confident that the U.S. Attorney will decide not to proceed when it conducts a nonpolitical review of the allegations."

According to Wednesday's letter, the corporation's investigation is ongoing, but officials declined to elaborate on when it would be complete or whether money would have to repaid.

Johnson, who retired from the NBA in 2000, bested Fargo 47 percent to 40 percent in the June primary, but the two face a runoff Nov. 4 because Johnson did not get more than 50 percent of the vote. Sacramento city elections are nonpartisan.

St. HOPE oversees two charter schools as well as a number of nonprofit endeavors in Sacramento, Johnson's hometown. Those include a development company and Hood Corps, an urban peace corps program at the center of the federal investigation.

Hood Corps received $807,000 in federal money between 2004 and 2007 but has received none since then.

ARENAS, WIZARDS FINED BY NBA: Gilbert Arenas and the Washington Wizards were fined $15,000 apiece by the NBA on Friday after he ducked out of the team's annual preseason media day, avoiding any discussion of his third left knee operation in 1 1/2 years.

A few of his teammates who did speak at the event wondered aloud about when — and whether — their All-Star point guard would be back to his Agent Zero self on the court.

"I think probably everybody's worried about that. I think Gil's got to be worried about that," center Brendan Haywood said.

"It's one of those things. I want to see him bounce back and be the player he was when he averaged 30 points, six assists, and was one of the top five vote-getters in the Eastern Conference. I think he can get back there. The doctors all say he can get back there," Haywood added.

"But in the back of everybody's mind, you're a little worried: 'What if?"'

What if Arenas takes longer to return than the vague, December-or-January target he wrote about on his blog the day after last week's knee surgery?

What if when Arenas does return, it takes a while for him to get into shape?

What if when Arenas does get into shape, it takes a while for him to play at his best?

"One thing I'm expecting to happen is that when he comes back, we're going to see Gilbert this year, but we probably won't see Agent Zero until the end of the season," forward Antawn Jamison said, "or maybe towards next year."

Arenas has yet to answer any questions in front of a group of reporters since his $111 million, six-year contract was announced in July. His first public discussion of his latest surgery was supposed to come Friday, but he was the only Wizards player the media wasn't able to talk to at the team's arena.

He did show up long enough to pose for photographs, but the team said Arenas cited his knee rehab work in declining to speak. Instead, a Wizards spokesman said, Arenas will address the media today, when the team opens training camp in Richmond, Va.

Arenas was penalized "for failing to make himself available to the media," the league said, while Washington was docked the same amount "for failing to ensure that its players comply with NBA media interview rules."

Team spokesman Scott Hall said the Wizards wouldn't comment on the fines.

The Wizards haven't offered any timetable for when Arenas might be able to start practicing or playing. He first had surgery on the left knee in April 2007, then had another operation in November, and appeared in only 13 regular-season games last season.

Wizards president Ernie Grunfeld, coach Eddie Jordan and several players have been optimistic about playing well until Arenas does don a uniform. The Wizards made the playoffs last season by relying on All-Star forwards Caron Butler and Jamison, veteran guards DeShawn Stevenson and Antonio Daniels, and Haywood.

"We need to go out there and understand that if Gilbert's here, it's a great thing," Stevenson said, "and if not, we're just going to have to work a little bit harder."

Whatever worries Arenas' teammates might harbor, they are looking on the positive side.

Long as it might take, they figure, certainly the day will come when their enigmatic guard is hitting buzzer-beating 3-pointers, just like in the old days.

"Eventually, he's going to be back to normal. I think so," Jamison said. "He's going to do everything possible to make sure he's at that level and healthy."

Stevenson has spoken to Arenas about what the future may hold.

"We're tight, so obviously, we've talked about it. I know him. I know he's going to work hard. He's not one of them guys who gets his money and goes out the window," Stevenson said. "So you will see a Number Zero jersey back on the court."

A reporter pointed out that about half the questions put to Stevenson were about his pal and backcourt mate.

Stevenson shrugged, smiled and replied: "Making $111 million, it's going to be like that."

ROCKETS' BATTIER TO MISS MOST OF PRESEASON: Houston Rockets forward Shane Battier will be sidelined up to four weeks and miss most of preseason because of an inflammation in his left foot.

He had surgery May 9 to remove bone spurs from his left ankle, and the team said the foot inflammation occurred during rehabilitation. The Rockets open training camp Tuesday.

The 6-foot-8 forward started 78 games last season and averaged 9.3 points and 5.1 rebounds. He was one of the team's most dependable 3-point shooters, hitting 38 percent.