The action by the chief of naval operations in the case of Lt. Jacob Portier is the latest blow to military prosecutors and comes a month after a jury cleared Special Operations Chief Edward Gallagher of murder and attempted murder charges.
Portier, the leader of Gallagher's platoon, faced charges of dereliction of duty, destruction of evidence and conduct unbecoming an officer for holding Gallagher's re-enlistment ceremony next to the corpse of a teen Islamic State militant the decorated SEAL was accused of stabbing to death after treating the boy's wounds.
Adm. John Richardson dismissed the case because it was "in the best interest of justice and the Navy," according to a statement.
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Defense attorney Jeremiah J. Sullivan III said Portier was relieved to get the news and is still "proud to wear the uniform" and would happily return to combat.
Gallagher was convicted of a single charge of posing for photos with the 17-year-old militant's corpse. He was sentenced to the maximum penalty of four months but will serve no jail time because he was confined longer while awaiting trial.
Richardson intervened a day after President Donald Trump ordered the secretary of the Navy on Wednesday to strip prosecutors of medals they were awarded for their handling of the case despite the fact Gallagher was acquitted on the most serious charges.
Eugene Fidell, who teaches military justice at Yale Law School and served as a lawyer in the U.S. Coast Guard, said he has never seen anything like this.
He said there should be a court of inquiry -- the highest level of investigative body under the military justice system -- and that the proceedings should be made public because the American people deserve answers.
"We're entitled to more of an explanation as to why the case against Lt. Portier is being ditched," he said. "Are they saying the entire investigation, the entire set of facts have been corrupted beyond repair? That doesn't follow."
Sullivan, a former Navy prosecutor and military judge, said events of the last two days were a scathing indictment against military prosecutors and he wouldn't be surprised if resignations follow.
"The legal military justice system -- their integrity has just been eviscerated," Sullivan said. "It's certainly discrediting to the Navy leadership to have the president of the United States strip away awards."
A prosecutor who had been removed from the case before trial -- and not given a medal -- was admonished for taking part in an effort that used software to track emails sent to the defense team that a judge said violated Gallagher's constitutional rights.
The email tracking was meant to ferret out the source of leaks to the news media that plagued the case. The Navy said it never found the leak.
The Gallagher case was further doomed at trial when one of his fellow SEALs took the stand for the prosecution and said he killed the Islamic State militant himself.
Special Warfare Operator 1st Class Corey Scott, who testified with immunity from prosecution, said Gallagher had stabbed the teen. But he stunned the court when he told the jury the boy would have survived those wounds except that Scott had plugged his breathing tube.
Prosecutors were investigating Scott for perjury, but Richardson blocked prosecutors from taking any action against him.
Defense lawyer Brian Ferguson said Scott was "profoundly grateful" the chief of naval operations intervened to exonerate Portier. He also thanked the president for his interest in the case.
Scott called Portier "a model of courage on the battlefield in the fight against ISIS and back home in the defense of his platoon," Ferguson said.
Lawyers for Gallagher are fighting his sentencing, which included a reduction in rank that would affect his benefits as he prepares to retire.
The sentence must be approved by the commanding officer who oversaw the court-martial.
This article was written by Brian Melley and Julie Watson from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.