Two VA Officials Targeted In Federal Probe Over Relocation Payout Scheme

Chuck Ross Investigative Reporter
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Federal prosecutors are conducting a criminal investigation into whether two Veterans Benefits Administration (VBA) officials improperly used their power and authority to force out their predecessors in order to take over their jobs and obtain hefty relocation incentive payouts, according to a damning new report released by the VA’s inspector general Monday.

The report also found that the VBA improperly used a relocation program to help provide raises to agency officials in order to help get around a government pay and bonus freeze that was in effect between fiscal year 2010 and fiscal year 2013.

The findings come as the VA’s top brass has blamed its failure to provide timely health care to veterans on a lack of federal funding.

The inspector general opened its investigation earlier this year at the request of Florida U.S. Rep. Jeff Miller, the chairman of the House Committee on Veterans’ Affairs.

Miller initially inquired about a $280,000 payout to Diana Rubens, who on June 1, 2014 switched from the Washington, D.C.-based deputy Under Secretary for Field Operations at VBA to the director of the Philadelphia and Wilmington VA regional offices.

The relocation payment — $211,000 of which went to a private company to help Rubens sell her Alexandria, Va. home — raised questions because of its enormity and because of the short distance between Washington D.C. and Philadelphia. (RELATED: VA Officials’ $288K ‘Relocation Payout’ Related To Little-Known House Buyout Program)

While Rubens has claimed that she required a relocation incentive in order to make the transition, evidence obtained by the IG found that she was so eager to take the position that she worked behind the scenes with several colleagues to relocate her predecessor, Robert McKenrick, against his will.

Rubens first showed interest in taking the Philadelphia job in Dec. 2011 but was denied the transfer because she was needed in the role she held at the time, she told IG investigators. McKenrick took the Philadelphia job in 2012.

In a June 10, 2015 interview, McKenrick told IG investigators that in 2014 he was essentially forced to take a director job in Los Angeles that he did not want. And according to the timeline of the IG’s investigation, Rubens appeared to have taken part in ensuring that McKenrick was picked for the position, thus clearing the way for her to take over the Philadelphia position. Rubens is from the Wilmington area, she told the IG.

McKenrick was pushed out after he was initially tapped to take part in a review board to find a new director for the Los Angeles position. But despite finding five highly qualified candidates out of 168 applicants, Rubens’ office suspended the hiring effort.

McKenrick told investigators that he had a conversation with Rubens and told her that he would have to be “direct reassigned” in order to relocate to Los Angeles. That meant that he would not volunteer for the position but would take it if ordered to do so by his superiors.

And that’s eventually what happened, though Rubens conveyed to investigators that McKenrick was eager to relocate.

In a May 28 interview, Rubens said that McKenrick expressed interest in relocating and said that “he thought it would be good for him and his…family to relocate.” But McKenrick completely undermined that claim in his interview weeks later, saying that he was disappointed in the relocation because it put him “further away from my children.”

The IG found a similar pattern of manipulation from Kimberly Graves, the director of the St. Paul VA regional office. Graves, whose mother lives in the St. Paul area, had previously held the position of Eastern Area Director. The VA paid out $129,467 to help with the move.

Graves’ predecessor, Antoine Waller, told IG investigators on June 10, 2015 that Graves initially approached him in spring 2014 about taking a job on the “east coast.”

Waller told Graves that he would consider taking the Philadelphia job, prior to Rubens being approved for the position. But Graves came back a week later and informed Waller that the situation had changed and that he was being sought for a job as director at the Baltimore VA regional office.

Waller did not want to take that job however, he told IG investigators. He said that he rejected the idea at least three times but that he felt he was under enormous pressure to play ball. Beth McCoy, who at the time was a subordinate of Rubens’, emailed Waller to tell him that his name had been sent up to the VA secretary’s office as a replacement in Baltimore and that “saying no now is not a clean or easy option.”

Once Waller was shipped to Baltimore, Graves contacted Rubens about taking the St. Paul position.

Allison Hickey, the VA’s Under Secretary for Benefits, admitted during a May 2015 interview that convincing Waller to take the job involved “heavy twisting.” She also said that the Baltimore job “was going to suck the last ounce of blood” out of whoever took it.

The IG pieced the evidence together and determined that “there was a coordinated effort by Ms. Graves, Ms. McCoy, and Ms. Rubens to put pressure on Mr. Waller to accept a reassignment to Baltimore.”

“Our analysis of available evidence indicated two directors appear to have been inappropriately coerced to leave positions they were not interested in leaving to create vacancies for Ms. Rubens and Ms. Graves,” the IG report reads. “Ms. Rubens and Ms. Graves were in positions that allowed them to effect these transfers and, therefore, misused their positions of authority for their own personal benefit.”

Based on that assessment, the IG referred the matter to the U.S. Attorney’s Office in Washington D.C. Prosecutors are still weighing whether to proceed with the case.

The Daily Caller contacted Rubens’ office for comment but was told she was out of the office for the day.

In a statement, Miller slammed VA leadership.

“It is clear from this report that Under Secretary 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,” 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. The actions of the individuals uncovered by this report are a discredit to VA employees and veterans.”

Miller also said that he is examining whether VA officials misled his committee during an April 22 hearing on Rubens’ relocation payout. Rubens testified at that hearing and said that she did not know whether she would have moved to Philadelphia without the incentive payout. (RELATED: VA Official Grilled In House Hearing Over $300K Incentive Payout)

The IG report also hits the VA over its use of relocation incentives to effectively give officials a pay raise. During a May 13, 2015 interview, Danny Pummill, the principal deputy Under Secretary for Benefits, told the IG that he believed that the VA used relocation payouts to serve as salary raises and bonuses in order to get around the pay freeze. That despite a federal pay freeze on executive salaries.

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