Doctor Bitter Over Accusations That Put Him Under Navy Microscope : Military: Surgeon looks forward to getting on with his life now that the service has released him.

On Feb. 27, Dr. Mitchell Grayson, a Navy Hospital plastic surgeon, accepted a civilian job offer in Pennsylvania, thinking he was off to a new life.

It turned out to be the same day that Grayson--who volunteered his time to operate on Third World patients--became ensnared in a 3-month Navy investigation, which culminated in a letter of reprimand and a $2,000 fine last month. He was accused of improperly borrowing surgical utensils for those operations.

Cmdr. Grayson has operated on more than 200 Third World patients to correct cleft lips and palates. Four years ago, he also founded the San Diego chapter of Operation Smile, a national group of medical volunteers providing reconstructive surgery to Third World indigents.

Grayson, 36, who joined the Navy 15 years ago, had planned to leave the service in March for a civilian job. The day he accepted it, he also received a call from a Navy attorney informing him he had been put on “legal hold”--meaning he could not leave the Navy.

The nightmare came to an end Tuesday when the Navy formally released him, but for months, “I felt like the world was coming to an end,” Grayson said.

He spoke openly Wednesday for the first time about the ordeal. “I had no clue as to what was going on. I said, ‘How can you hold me? Is there a war going on?’ ”

Grayson’s request for release from military service was delayed while the Navy investigated allegations that someone had given him a $10,000 trust fund and expensive furniture, and that he took gratuities for cosmetic surgery from relatives of military personnel while ignoring active duty personnel. He was also accused of stealing surgical equipment and of abusing temporary-duty status by taking 90 days off from duty.

“I always wore my uniform with pride,” Grayson said. “Now I feel bitter and betrayed at the same time. It’s not like I did a bad thing--I had no personal gain. And now I have personal losses.”

In recent disciplinary proceedings, most of the charges against Grayson were dropped. But he was slapped with a fine for borrowing 40 used surgical utensils for operations conducted in the Third World.

“I used the instruments and I returned them all. The instruments were older and they were never being used by the operating room,” Grayson said. “I have always done everything very openly. Everyone knows I borrow instruments. It’s no secret, and I always bring them back.”

During the disciplinary hearing, he also explained that a former commanding officer at the hospital had given him permission to use the utensils, he said.

Navy officials declined to comment on the case.

Grayson says the Navy’s 3-month investigation of his activities was spurred by a complaint to a fraud hot line from a disgruntled employee, whom he had reassigned to another area in the hospital. Hiring an attorney and battling the Navy cost Grayson more than $10,000, as well as his respect for the Navy, he said.

It also derailed his career plans. With his pregnant wife due to deliver their second baby by the end of this month, Grayson has delayed their move east until August.

Up to now, Grayson has refused to talk on the record to reporters, fearing retaliation and further delay of his request to leave the Navy. But since he was released this week, he said he felt more comfortable discussing the nightmare that consumed his life.

“This has been a tremendous disruption to our life,” he said.

Grayson said he established Operation Smile because he believes countries such as the United States have a moral obligation to help less privileged nations. He had received permission to volunteer his time working in countries such as Ghana, Mexico, Colombia, Liberia and the Philippines.

“It’s a very rewarding experience,” he said. “We are so blessed here in the States that we are obliged to give something back to others.”