Demoted VA Senior Executives Appeal Their Punishment

The two former senior executives at the center of the relocation benefits controversy at Veterans Affairs are appealing the department’s decision to demote them.

The Merit Systems Protection Board has received appeals from both Diana Rubens and Kimberly Graves, and will render a decision in the next few weeks on whether the agency’s punishment stands, or whether the two should be reinstated as members of the Senior Executive Service.

Rubens, former director of the Veterans Benefits Administration’s Philadelphia office, and Kimberly Graves, former director of VBA’s St. Paul, Minn., regional office, were demoted officially on Jan. 6 to General Schedule jobs, and reassigned to assistant director positions at the VBA’s Houston and Phoenix regional officials, respectively. Those demotions come with pay cuts of more than $50,000 each: Rubens’ annual salary decreased from $181,497 to $123,775; Graves’ annual salary fell from $176,558 to $122,932.

If this all sounds familiar, that’s because it is. The VA in October 2015 originally initiated disciplinary actions against Rubens and Graves, demoting them to GS-15 assistant director positions within VBA. The two promptly appealed the punishment to the MSPB. But an administrative error forced VA in early December to rescind the punishment and restart the disciplinary process. The department had failed to provide Rubens and Graves with all the information regarding their punishment during the notice period. So, MSPB dismissed those appeals as “moot,” because the department had to restart the disciplinary process. Hence, these latest appeals.

Under the 2014 Veterans Access, Choice and Accountability Act, the VA can fire or demote SES employees immediately, with paychecks getting cut off the day of termination. The affected executive would then have seven days to issue an appeal to MSPB, which in turn would have 21 days for an expedited adjudication. 

In September, the VA inspector general concluded the two improperly helped create vacancies at their respective offices and volunteered to fill them. The two employees occupying the Philadelphia and St. Paul director jobs at the time were relocated to jobs they did not volunteer for to make room for Rubens and Graves, who were working elsewhere at the time in positions with more responsibility, according to the watchdog. VA paid roughly $274,000 in relocation expenses for Rubens, and about $129,000 for Graves, for a total of more than $400,000. The two are eligible for some relocation benefits pending their reassignments to Houston and Phoenix, “in accordance with governmentwide statutes and regulations that require federal agencies to pay for the geographic relocation of an employee directed to relocate” the department has said.

The U.S. Attorney for the District of Columbia in December declined a referral for criminal prosecution from the VA watchdog related to Rubens and Graves. “The U.S. Attorney’s Office has notified the VA’s Office of the Inspector General of this decision and referred the matter to the VA for any administrative action that is deemed appropriate,” the office said in a statement at the time.

The IG in its fall report had concluded that VBA managers reassigned senior executives to circumvent a pay freeze, and also paid many of those executives unjustified relocation incentives. VBA spent a total of about $1.8 million on 23 reassignments from fiscal 2013 to fiscal 2015, the IG found. All but two of the reassignments came with pay raises, despite an Office of Personnel Management freeze on Senior Executive Service pay from 2010 through 2013, and a separate VBA ban on bonuses in 2012 due to lack of progress addressing the backlog of outstanding disability benefits claims.

VA’s decision to demote and not fire Rubens and Graves has added more tension to an already hot debate over firing in the federal government. Many lawmakers of both parties and other observers are frustrated with the department’s inability to quickly shed 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 VA isn’t using the new authority adequately. (Department officials used that authority to demote Rubens and Graves.) Critics of the expedited firing authority say it violates career employees’ due process rights.

VA Deputy Secretary Sloan Gibson has been emphatic about the importance of following due process and evidence in disciplinary actions against employees. During a Dec. 9 hearing before the House Veterans' Affairs Committee, he defended his decision to demote and reassign rather than fire Rubens and Graves. The evidence against the two did not warrant firing, or the IG’s criminal referral to the Justice Department, Gibson argued.

“I’m not going to recommend, I’m not going to propose a disciplinary action that is based upon media coverage, or an opinion that is expressed in the IG report, if it is not supported by the evidence,” he said, adding that he knew his decision not to fire Rubens and Graves wasn’t going to “sit well, with virtually everybody.”