The $328,000 Air Force One Photo

WASHINGTON [CBS] — On the same day that the White House released the photograph that cost $328,000 and turned the stomachs of thousand of New Yorkers, President Barack Obama accepted the resignation of the official who authorized the presidential aircraft flyover in lower Manhattan last month, CBS 2 reports.

Louis Caldera, the director of the White House Military Office, handed in his resignation Friday. The news comes as Defense Secretary Robert Gates says the Air Force flyover that sparked a panic was not adequately reviewed and approved by senior service and department officials.

The flyover was arranged as part of a photo opportunity for White House records. The official photo was released along with Caldera’s resignation and the official report on the flyover.

Caldera said the controversy had made it impossible for him to effectively lead the White House Military Office. “Moreover, it has become a distraction in the important work you are doing as president,” Caldera said in his resignation letter to President Barack Obama.

The sight of the huge passenger jet and an F-16 fighter plane flying past the Statue of Liberty and the lower Manhattan financial district sent panicked office workers streaming into the streets on April 27. Obama said it would not happen again.

Caldera’s office approved the photo-op, which cost $35,000 in fuel alone for the plane and two jet fighter escorts. The Air Force estimated the photo shoot cost taxpayers $328,835.

White House officials said the flight was designed to update the official photo of the plane, known as Air Force One when the president is aboard. The White House released a photo of the blue-and-white plane high above the Statue of Liberty, with New Jersey in the background.

The White House released the report late Friday afternoon via e-mail, with a short written statement from White House press secretary Robert Gibbs. There was no statement about the matter from Obama, who last month declared the embarrassment a “mistake” and vowed it would not be repeated.

Gibbs said Obama has ordered a review of how the White House Military Office is set up, and how it reports to the White House and the Air Force.

That review, to be conducted by Deputy Chief of Staff Jim Messina and Defense Secretary Robert Gates, will also offer recommendations to Obama designed to ensure that such an incident will not happen again, Gibbs said.

Caldera, a former Army secretary, has headed the office that coordinates presidential travel on Air Force jets.

When Obama appointed Caldera to the job during the presidential transition, the then president-elect hailed Caldera as having a resume that was second-to-none. Obama said then: “I know he’ll bring to the White House the same dedication and integrity that have earned him the highest praise in every post.”

His resignation takes effect May 22, but he is done at the White House Military Office now — not just as director, but in any part of the office’s work. He said he will use the two weeks of his employment to complete the necessary steps to leave the White House.

Days after the incident drew panic and anger from frightened New Yorkers, CBS 2 HD discovered the federal officials knew that sending two fighter jets and a the 747 from the presidential fleet to buzz Ground Zero and Lady Liberty might set off nightmarish fears of a 9/11 replay, but they still ordered the photo-op kept secret from the public.

In a memo obtained by CBS 2 HD, the Federal Aviation Administration’s James Johnston said the agency was aware of “the possibility of public concern regarding DOD (Department of Defense) aircraft flying at low altitudes” in an around New York City. But they demanded total secrecy from the NYPD, the Secret Service, the FBI and even the mayor’s office and threatened federal sanctions if the secret got out.

“To say that it should not be made public knowing that it might scare people it’s just confounding,” Sen. Charles Schumer said last month. “It’s what gives Washington and government a bad name. It’s sheer stupidity.”

The flyover — ordered by the White House Office of Military Affairs so it would have souvenir photos of Air Force One with the Statue of Liberty in the background — had President Obama seeing red. He ordered a probe and apologized.

“It was a mistake. It will never happen again,” President Obama said.

The cost of the frivolous flight was about $60,000 an hour and that was just for the presidential aircraft. That doesn’t include the cost of the two F-16s that came along.

The flight by the VC-25, a modified Boeing Co. 747, and two F-16 fighter jets cost $328,835, Air Force spokeswoman Vicki Stein said.

That includes $300,658 for the larger plane, which flew a three-hour mission, and about $28,178 for the F-16 jets, which flew 1.8 hours each, Stein said in an e-mailed statement.

The NYPD was so upset about the demand for secrecy that Police Commissioner Ray Kelly vowed never to follow such a directive again and he accused the feds of inciting fears of a 9/11 replay.

“Did it show an insensitivity to the psychic wounds New York City has after 9/11? Absolutely. No questions about it. It was quite insensitive,” Kelly said.

The mayoral aide who neglected to tell Mayor Michael Bloomberg about it was reprimanded.