Judge Tells VA to Repay Former Senior Exec’s Bonus

This story has been updated.

The Veterans Affairs Department has to return the bonus it took away from Sharon Helman, the former VA senior executive at the center of the scandal over patient wait times.

Judge Alan R. Caramella ruled on Feb. 25 that the department has to repay part of the $9,000 bonus it recouped from Helman last year until he makes a final decision on the matter; he has scheduled an April 29 hearing. Caramella is an administrative law judge with the Postal Service Board of Contract Appeals.

Caramella directed VA to repay Helman $5,624.80 by March 10, the amount the department withheld from her pay to recoup the bonus over last summer and fall. The remaining $3,455.80 represents taxes and deductions the VA took out on Helman’s behalf, which she is not eligible to recoup.

Helman, the former career senior executive who ran VA’s Phoenix health care system when the scandal over falsifying wait lists erupted last spring, was fired in November, and then appealed her case to the Merit Systems Protection Board. Chief Administrative Judge Stephen C. Mish in December upheld Helman’s firing because she improperly accepted more than $13,000 in gifts from a lobbyist and failed to report them, not because she engaged in misconduct related to manipulating data to conceal excessive wait times for vets seeking health care.

When the wait times scandal erupted last spring, then-VA Secretary Eric Shinseki rescinded the performance award given in 2013 to Helman, a bonus that the department said was awarded because of an administrative error. Federal employee advocates as well as department officials, however, have questioned whether the agency actually has the authority to rescind an employee bonus for malfeasance.

The House earlier this month passed legislation that would give the secretary of the Veterans Affairs Department clear authority to order employees to repay bonuses.

H.R. 280 would require notifying affected employees before they had to repay the money, and would give them an opportunity for a hearing conducted by the secretary. It would allow employees to request a hearing by a third party after the secretary’s decision. The legislation also includes a provision directing the secretary to publish regulations describing the bonus rescission process so that employees know their rights under the bill. H.R. 280 now heads to the Senate.

The idea behind the measure is to give the VA chief another tool to punish those engaged in misconduct – in this instance by allowing the department to revoke bonuses those employees have received. But the legislation does not specify criteria that would be grounds for ordering a repayment, giving the secretary broad discretion. The bill also is aimed at clearing up any confusion over whether VA has the authority to claw back bonuses.

Last year, a USA Today report found that VA awarded $380,000 in bonuses to “directors and top executives” at 38 hospitals under investigation for falsifying records.

Most federal agencies are not making meaningful distinctions in performance ratings and bonuses for senior executives, according to a recent report from the Government Accountability Office. The result is a system where nearly everyone is considered outstanding, and truly exceptional senior executives are treated similarly to their above-average peers when it comes to performance ratings and awards, GAO concluded. 

Career senior executives across government received about $42 million total in bonuses for fiscal 2013. There were 7,900 senior executives in 2013. The average salary for all senior executives across government in fiscal 2013 was $168,608; SESers do not receive locality pay (which has been frozen for those in the General Schedule since 2011), and their pay increases are based on performance and at the agency’s discretion.

Helman earned an annual salary of $169,000 while she was director of the VA Phoenix health care system.

President Obama on Friday was scheduled to visit the VA health care facility in Phoenix that sparked the department’s management overhaul.