* Estimated number of sexual crimes jumped 38 percent to 26,000
* Defense chief expresses outrage over weekend groping incident
* Obama urges military to 'step up our game' over the issue
The Obama administration expressed outrage about a recent high-profile Air Force groping scandal on Tuesday as the Pentagon released a study estimating that the number of sex crimes involving military personnel soared 37 percent last year.
The annual Pentagon report, which estimated there were 26,000 sex crimes ranging rape to abusive sexual contact in 2012, came a day after the Air Force removed the officer in charge of its anti-sexual assault office for allegedly groping a civilian in a suburban parking lot near the Pentagon.
Lieutenant Colonel Jeffrey Krusinski, 41, was removed from his job as head of the Air Force Sexual Assault Prevention and Response Office after he was charged with sexual battery for allegedly grabbing a civilian woman by the breasts and buttocks.
The incident provoked an outcry from senior Pentagon officials, lawmakers, and President Barack Obama, who told reporters he had "no tolerance for this."
"We find out somebody's engaging in this stuff, they've got to be held accountable. Prosecuted. Stripped out of their positions. Court martialed. Fired. Dishonorably discharged. Period. It's not acceptable," Obama told reporters.
He said he had spoken to Defense Secretary Chuck Hagel and told him "we're going to have to not just step up our game - we have to exponentially step up our game to go at this thing hard."
Releasing the Pentagon's annual report on sexual assault in the military, Hagel said the Defense Department was "outraged and disgusted over these very troubling allegations." He warned that the problem of sexual assault had reached a point that it could jeopardize the military's ability to attract and retain personnel.
"Sexual assault is a despicable crime and one of the most serious challenges facing this department," he said. "It's a threat to the safety and the welfare of our people and the health, reputation and trust of this institution.
The Pentagon study found there were 3,374 reported cases of sexual assault in 2012, up nearly 200 from the 3,192 reported in 2011. Using survey data, the department estimated there were 26,000 cases of unwanted sexual contact in 2012, compared to 19,000 in 2011.
More men than women reported unwanted sexual contact - 13,900 versus 12,100 - but a higher proportion of female personnel were affected - 6.1 percent, versus 1.2. percent - the study found.
SERIES OF EMBARRASSING SCANDALS
The military has faced a series of embarrassing sexual assault scandals in the past year. An investigation at Lackland Air Force Base in San Antonio, Texas, that began in 2011 has so far turned up 59 cases of sexual assault of military recruits by drill instructors.
The military has also been involved in controversial cases where the officer in charge of a court martial proceeding has thrown out the sexual assault convictions of service members. Those incidents have raised questions about whether the military can effectively deal with its sexual assault problem.
Despite the difficulties, Hagel told reporters he did not favor removing the prosecution of sex crimes from the authority of the military chain of command.
"Some things do need to be changed," Hagel said. "Taking it away - the ... ultimate responsibility - away from the military, I think that would just weaken the system."
Even so, Krusinski may not face a military court over his sexual battery charge because the Arlington County prosecutor Theo Stamos decided to retain jurisdiction over the case rather than relinquish it to the military. She said it did not make sense to hand the case over to the military since it took place in a civilian setting.
Hagel announced a series of steps to improve the military's efforts to prevent and respond to sexual assaults, but some lawmakers expressed skepticism and vowed to move ahead with efforts to remove responsibility for prosecuting the crimes from the chain of command.
"Despite pledges of zero tolerance from the military ... this report provides troubling evidence that we are going in the wrong direction," said Democratic Senator Kirsten Gillibrand from New York, who said she would introduce legislation next week.
Air Force Secretary Michael Donley and Chief of Staff General Mark Welsh faced sharp questions over the sexual assault issue at a Senate Armed Services Committee hearing on Tuesday.
They said they were appalled by Krusinski's weekend arrest, but they resisted lawmakers' calls to remove prosecutions of sexual assault and rape from the military chain of command.
Democratic Senator Claire McCaskill from Missouri told the Air Force leaders that perceptions about the military's handling of sexual assault cases went to the heart of the issue.
"That is the crux of the problem here, because if a victim does not believe that the system is capable of believing her, there's no point to risking your entire career," she said.
How difficult, she asked, would it be for a victim "to have to salute the man who had been convicted by his peers of assaulting her."