A government watchdog said Monday that it has made a criminal referral against two senior Department of Veterans Affairs managers who reportedly orchestrated high salaries and huge relocation bonuses for themselves at taxpayer expense as part of a broader scheme by VA officials to reward executives with covert salary hikes in an era of government pay freezes.
The VA inspector general said the agency spent more than $400,000 just to relocate Kimberly Graves and Diana Rubens, who moved about 140 miles last year from Washington to Philadelphia. Although the moving expenses were generally allowable, the inspector general said both women rigged the VA hiring system to create the job vacancies so they could apply for the posts.
After they arranged their transfers, the inspector general said, Ms. Rubens, director of the Philadelphia VA office, and Ms. Graves, director of the VA office in St. Paul, Minnesota, retained their salaries of $181,497 and $173,949, respectively, even though their new jobs had fewer responsibilities at lower rungs on the federal pay scale.
Top VA officials in Washington said Ms. Rubens was moving to Philadelphia to clean up the VA’s beleaguered regional office, which had been rocked by scandals including falsifying dates on veterans’ benefits claims, retaliating against whistleblowers, and a manager compelling subordinates to pay a medium at a party to communicate with the dead.
The VA inspector general’s office has referred the cases of Ms. Rubens and Ms. Graves to the U.S. attorney’s office in the District of Columbia for possible criminal charges.
But the inspector general’s report released Monday goes far beyond the cases of Ms. Rubens and Ms. Graves in outlining a scheme in the agency to increase the salaries of senior executives.
Examining the cases of 22 VA employees who were either promoted to senior executive jobs or moved to different positions over a three-year period, the inspector general said, it found a pattern of the Veterans Benefits Administration using the moves “as a method to justify annual salary increases.” All but one of the employees received a significant pay raise.
“Annual salary increases totaled about $321,000, and … relocation expenses totaled about $1.3 million,” the report said. “Additionally, VBA paid $140,000 in unjustified relocation incentives. In total, VA spent about $1.8 million on the reassignments.”
The inspector general said the VBA “inappropriately” used the government’s relocation program to benefit its senior executive workforce. The VBA employs more than 18,000 people nationwide and administers benefit programs that pay over $70 billion annually to veterans and their beneficiaries.
House Veterans’ Affairs Committee Chairman Jeff Miller, Florida Republican, said the watchdog’s findings are “the latest in a long line of investigations showing VA officials helping themselves instead of helping America’s veterans.”
“It is clear from this report that Undersecretary [Allison] Hickey and others in VA leadership knew they could use fear, intimidation and timely relocation incentives to coerce subordinates to relocate to jobs they didn’t apply for at the taxpayers’ expense,” Mr. Miller said. “These VA managers knew what they were doing, and it is clear that from Day One that VA officials were using the relocation expenses program to enrich themselves.”
Mr. Miller also said he was reviewing whether VA officials misled the committee at an April hearing about Ms. Rubens’ relocation.
Senior VA managers told the inspector general that they were taking steps to correct problems, including unspecified improvements in the request and approval process for its relocation program.
The VA said in a statement Monday that it concurred with the inspector general’s recommendations.
“As a result of their findings, VA leadership will conduct a 30-day review of all incentive and relocation procedures in the department,” the agency said. “In addition, VA will consider all the evidence presented by the IG, collect any additional evidence necessary, and take appropriate accountability actions. VA will fully cooperate with other federal agencies as required as we continue our daily effort to improve the timeliness and quality of care and services delivered to our nation’s veterans.”
Ms. Rubens and Ms. Graves could not be reached for comment Monday.
The inspector general’s report said Ms. Rubens “inappropriately used her position of authority for personal and financial benefit when she participated personally and substantially in creating the Philadelphia vacancy and then volunteering for the vacancy.” The report also said Ms. Hickey should be considered for disciplinary action for her role in Ms. Rubens’ move from VBA headquarters to Philadelphia.
The investigation uncovered a pattern of the VA boosting salaries of executives significantly when filling vacant positions.
For example, when the VBA transferred Pritz Navaratnasingam from director of the Houston office to director in the Seattle office, his salary increased to $167,000 — 22 percent higher than his predecessor’s pay.
When the VBA transferred Duane Honeycutt from director of the Chicago office to director in Milwaukee, his annual salary was $165,300 — 15 percent higher than that of the previous director.
Some of the most intriguing passages in the report involve claims of scheming by Ms. Rubens and Ms. Graves to get their jobs.
The investigation said Ms. Rubens had long coveted the job in Philadelphia, partly because she grew up in nearby Delaware and had family there. She was involved in getting previous Philadelphia VA Director Robert McKenrick transferred to the VA’s Los Angeles office, even though he told investigators he didn’t want the transfer because it moved him farther away from his children.
When the VA reassigned Mr. McKenrick in early 2014, Ms. Rubens began lobbying Ms. Hickey for the Philadelphia job. Ms. Hickey replied enthusiastically, telling her in one email, “I will be all in to help and make it happen.”
The report also found that Ms. Graves, Ms. Rubens and another VA official pressured St. Paul VA Director Antoine Waller beginning in early 2014 to accept a transfer to the Baltimore office. Mr. Waller resisted several times but finally accepted the transfer after the agency paid him an additional $40,000 over two years as an incentive.
When Mr. Waller vacated the St. Paul office, Ms. Graves, who has family ties to the area, began efforts to be transferred to St. Paul, keeping the same salary despite fewer responsibilities.