WASHINGTON—The Justice Department refused to prosecute former Attorney General Alberto Gonzales for improperly—and possibly illegally—storing in his office and home classified information about two of the Bush administration’s most sensitive counterterrorism efforts.

Mishandling classified materials violates Justice Department regulations, and removing them from special secure facilities without proper authorization is a misdemeanor crime.

A report issued Tuesday by the Justice Department’s inspector general says the agency decided not to press charges against Gonzales, who resigned under fire last year.

The report by Inspector General Glenn A. Fine found that Gonzales risked exposing at least some parts of the National Security Agency’s terrorist surveillance program, as well as interrogations of terrorist detainees. Some aspects of the surveillance program explicitly referred to in the documents were “zealously protected” by the NSA, the report found.

Fine referred the case to the Justice Department’s National Security Division to see if charges should be brought against Gonzales. But prosecutors dropped the case after an internal review that began earlier this year, said Justice Department spokesman Dean Boyd.

“After conducting a thorough review of the matter and consulting with senior career officials inside and outside of the division, the NSD ultimately determined that prosecution should be declined,” Boyd said in a statement.

The lack of charges against the nation’s former top law enforcement officer infuriated the Democratic chairman of the House Judiciary Committee, John Conyers, D-Mich., who demanded to know why.

Lawyers for Gonzales acknowledge he did not store or protect the top secret papers—a set of handwritten notes about the surveillance program and 17 other documents—as he should have. But they say he did not intend to risk letting unauthorized people see them, and there’s no evidence that occurred.

The report is the latest to take Gonzales to task for mismanagement at the department during his 31 months as attorney general. The criticism could foreshadow the results of an ongoing investigation by Fine’s office about Gonzales’ role in the 2006 firings of nine U.S. attorneys. That inquiry is expected to be finished within months.

In a statement Tuesday afternoon, Conyers said he was “shocked” by the report’s findings that he said only adds “to an already troubling record of the Justice Department under this administration and under Mr. Gonzales.”