Demoted VA Senior Executives Still Eligible For Relocation Benefits

This story has been updated.

Two Veterans Affairs Department senior executives who were demoted and reassigned because they used their positions of authority for personal and financial gain are still eligible for relocation benefits for their new jobs, according to the VA.

The department reassigned Diana Rubens and Kimberly Graves to General Schedule assistant director positions within the Veterans Benefits Administration, according to a Nov. 20 statement. The Associated Press reported that the department reassigned Rubens to the Houston facility, and Graves to the Phoenix regional office.

Their new jobs will come with a pay cut since they are being demoted from the Senior Executive Service to the General Schedule pay system. But the two, who originally got into hot water over relocation benefits and improper reassignments, are still entitled to “seek reimbursement for appropriate costs” associated with their latest reassignments “in accordance with governmentwide statutes and regulations that require federal agencies to pay for the geographic relocation of an employee directed to relocate,” said a VA spokesperson.

Those reimbursable relocation expenses would not include the Appraised Value Offer, a governmentwide housing buyout program that helps reassigned federal employees sell their homes faster. The AVO program, managed by the General Services Administration, is separate from what’s known as the three R’s—recruitment, relocation, and retention incentives—that are available to the federal workforce.

The VA indefinitely suspended its AVO program after the department’s watchdog in September concluded that Rubens, who was director of VBA’s Philadelphia regional office, and Graves, who led VBA’s St. Paul regional office, improperly helped create vacancies at their respective offices and volunteered to fill them. The two employees occupying those jobs at the time -- Antione Waller and Robert McKenrick – were relocated to jobs (in Baltimore and Los Angeles, respectively) they did not volunteer for to make room for Rubens and Graves, who were working elsewhere at the time, according to the watchdog.

Additionally, VA paid nearly $300,000 in relocation expenses, including costs related to the AVO program for Rubens, and about $129,000 for Graves. Both Rubens and Graves took on fewer job responsibilities in their new positions in Philadelphia and St. Paul, but kept their previous annual salaries of $181,497 for Rubens, and $173,949 for Graves. Overall, the IG concluded that VBA managers reassigned senior executives to circumvent a pay freeze, and also paid many of those executives unjustified relocation incentives.

The Senate included an amendment in the fiscal 2016 VA spending bill that would prohibit the use of funds for the AVO program.

The VA did not immediately respond to a question about whether it plans to try and recoup any of the relocation benefits it gave to Rubens and Graves for their Philadelphia and St. Paul moves. Allison Hickey, former VA undersecretary for benefits, recommended Rubens for the reassignment to Philadelphia and a relocation incentive. Hickey resigned from the department on Oct. 16.

Rubens and Graves have not yet filed an appeal of the disciplinary action to the Merit Systems Protection Board, according to an MSPB official. Under the 2014 Veterans Access, Choice and Accountability Act, disciplined senior executives have seven days to appeal the adverse action to MSPB, which in turn would have 21 days for an expedited adjudication. If MSPB doesn’t render a decision within 21 days of the appeal date, then the secretary’s decision stands.

“Rubens and Graves clearly should have been fired,” said House Veterans’ Affairs Committee Chairman Jeff Miller, R-Fla. “The fact that VA leaders refused to do so gives me no hope the department will do the right thing and take steps to recover the more than $400,000 taxpayer dollars Rubens and Graves fraudulently obtained.”

Miller also called on VA to recover the money "on behalf of the veterans and taxpayers they are charged with serving,” saying a refusal to do so was "utterly inexplicable and downright indefensible." 

The head of the American Legion said he was disappointed that the department decided not to fire Rubens and Graves. “They are still allowed to draw generous paychecks and continue employment in an agency that was created to serve veterans,” said Dale Barnett, the group’s national commander. “This is an insult and disgrace to all veterans. Any promises that VA officials make about accountability in the future need to be taken with a grain of salt.”

Pete Hegseth, chief executive officer of Concerned Veterans for America, went further, blasting VA Secretary Bob McDonald directly. “His refusal to take meaningful action is perhaps the clearest evidence yet that he is part of the VA's culture problem, not the solution,” Hegseth said in a statement. “If he will not fire employees who knowingly violate federal rules, misuse tax dollars and show the utmost contempt for veterans and their needs, he should follow Ms. Rubens and Ms. Graves out the door. His weakness and inability as a leader has never been more apparent.”

The VA watchdog made criminal referrals to the Justice Department in the matter, and Senate Veterans’ Affairs Committee Ranking Member Richard Blumenthal, D-Conn., in October called on the department to investigate the relocation of several VA senior executives outlined in the IG report, including Rubens and Graves.

Blumenthal on Monday called the department’s demotion of the two “an appallingly insufficient punishment,” adding that “at a time when VA should be striving for accountability and working to restore veterans’ trust in the department, this latest slap on the wrist shows once again that the corrosive culture still exists.”

Rubens and Graves appeared under subpoena at a November House VA Committee hearing, but did not answer the committee’s questions, invoking their Fifth Amendment right against self-incrimination.

The VA’s decision to demote and not fire Rubens and Graves adds more tension to an already hot debate over firing in the federal government. Many lawmakers and other observers are frustrated with the VA’s inability to quickly get rid of poor performers or those engaged in misconduct. The 2014 Choice Act makes it easier for the department to fire and demote senior executives, but some believe the VA isn’t using the new authority. (The VA used that authority to demote Rubens and Graves.) Critics of the expedited firing authority say it violates career employees’ due process rights.

But even high-ranking department officials have acknowledged how difficult it can be to fire federal workers. Danny Pummill, acting undersecretary for benefits at the department since Hickey’s departure, told Miller’s committee that he found the federal firing process “impossible” to navigate.

“The civil servants, and I believe this is federal governmentwide, have incredible protections and safeguards, and so the process of taking care of a problem employee takes an incredible amount of documentation, oversight, time and energy, and taxpayer dollars,” he said during a Nov. 2 hearing. “And normally [it] ends when somebody outside of our organization comes back and says ‘You missed a step, reinstate the person with back pay.’”

The House in late July passed a bill that would make it easier to fire all poor-performing or corrupt employees at VA, not just top officials. It would essentially expand to the entire workforce the authority under the Choice Act. The bill, which President Obama has threatened to veto, still is pending in the Senate.