  We report on the local electronic structure of Fe impurities in MgO thin
films. Using soft x-ray absorption spectroscopy (XAS) we verified that the Fe
impurities are all in the 2+ valence state. The fine details in the line shape
of the Fe $L_{2,3}$ edges provide direct evidence for the presence of a
dynamical Jahn-Teller distortion. We are able to determine the magnitude of the
effective $D_{4h}$ crystal field energies. We also observed a strong
temperature dependence in the spectra which we can attribute to the thermal
population of low-lying excited states that are present due to the spin-orbit
coupling in the Fe 3d. Using this Fe$^{2+}$ impurity system as an example, we
show that an accurate measurement of the orbital moment in Fe$_3$O$_4$ will
provide a direct estimate for the effective local low-symmetry crystal fields
on the Fe$^{2+}$ sites, important for the theoretical modeling of the formation
of orbital ordering.
