In the filing on Friday, US Attorney Jeanine Pirro and Assistant US Attorney Michael Spence asked a judge to drop the Trump administration's case against David "Davey" Hearn, 67, whom it had accused of vandalising the pool, which has become a flashpoint over President Donald Trump's efforts to remake Washington.
Prosecutors wrote that the pool's peeling problems stemmed not from vandalism, but from "flawed installation" by the contractor, Atlantic Industrial Coatings, according to documents provided by the Department of the Interior.
"The information subsequently demanded by USAO and disclosed by DOI — which was not known to the prosecutors or the grand jury before the return of the indictment — strongly suggest that a rushed and botched installation by AIC, the primary contractor, led to the damage to the lining of the Reflecting Pool," Pirro and Spence wrote.
The Interior Department and Atlantic Industrial Coatings did not immediately respond to a request for comment.
Following the initial vandalism charges brought against Hearn and others, Interior officials only "slowly started trickling information" to prosecutors after "dozens and dozens" of requests from the US Attorney's Office, according to Pirro and Spence.
"Had DOI been forthcoming with the information clearly in its possession, the government would not have sought a grand jury indictment," they wrote.
The 600m pool, a centrepiece of Washington's National Mall, had been refurbished with an "American flag blue" liner at Trump's request. The work was hurried in an attempt to get it done in time for events associated with the 250th anniversary celebration of US independence, according to the filing.
The pool renovation was part of Trump's efforts to remake the US capital city, which have included tearing down the East Wing of the White House to put up a new ballroom and plans to build a massive arch near Arlington National Cemetery, where the US honours its war dead and other prominent Americans.
The renovated pool quickly developed blooms of algae that tinted the water green, while pieces of the blue lining peeled off. Trump, facing criticism over the $US14.7 million ($A20.9 million) renovation, blamed the problems on vandals he alleged had intentionally sabotaged the project.
Hearn, a former US Olympic canoeist, pleaded not guilty earlier this month to vandalising the pool. He faced a felony destruction of property charge after federal prosecutors alleged he intentionally damaged lining material at the bottom of the Reflecting Pool in June.
Hearn had acknowledged reaching into the Reflecting Pool while cycling in the area and touching a piece of pool liner that was already partially detached, but denied removing anything from the pool.
Hearn's lawyers on Friday said the dismissal of the case against him does not erase "the abuse of government power" and the Trump administration owed him an apology.
