Top Public Servants Will Soon Get Wall Street-Grade Bonuses

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Luke Rosiak Investigative Reporter
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The top “1 percent” of the federal civil service will be eligible for much bigger pay bonuses next year, according to a new Office of Personnel Management (OPM) advisory.

Agencies can now give bonuses to top executives from a pool amounting to 7.5 percent of their total spending on Senior Executive Service (SES) salaries, up from 4.8 percent. An individual can get an annual bonus of more than that percentage. SES employees earn base salaries of up to $181,000, and 7.5 percent of that is $13,500.

Members of the SES represent less than 1 percent of the federal workforce, and are generally permanent career civil servants. In some ways, this makes them more influential than political appointees who often stay in a government job only about 18 months.

The SES was created by the Civil Service Reform Act of 1978 as the federal government’s top career managers. They received higher pay in return for agency heads having more flexibility in assigning SESers to new jobs.

In the decades since, however, SESers have been represented by a powerful lobbying force, the Senior Executives Association (SEA). SEA has lobbied to give them the pay and power of at-will managers at major corporations, but with the job security of a unionized blue-collar worker or tenured college professor.

The Daily Caller News Foundation revealed in an April 24, 2016, story that SEA is essentially a front for a law firm that profits through endless appeals on behalf of individual SESers fighting discipline. The group has taken agencies to court over bonuses for clients.

The law firm out of which SEA is based is representing Sharon Helman, a convicted felon and former Department of Veterans Affairs (VA) executive who accepted gifts from a contractor while veterans died on falsified wait-time lists. She could get her job back, and got a court to undo the rescission of a bonus that was received while her hospital was performing abysmally.

Critics contend the civil service performance rating system is a failure because the vast majority of career employees — including SESers — are rated as good performers or better.

The Government Accountability Office found, for example, that “more than 85 percent of the career SES… were rated in the top two of five categories for fiscal years 2010 through 2013, and career SES received approximately $42 million in awards for fiscal year 2013.”

As The New York Times put it, “all of the 470 senior executives at [VA] received annual ratings over the last four years indicating that they were ‘fully successful’ in their jobs or even better … despite delays in processing disability compensation claims and problems with veterans’ access to the department’s sprawling health care system.”

The Times also reported that none of VA’s SESers received “either of the two lowest of five possible job ratings, ‘minimally satisfactory’ or ‘unsatisfactory,’ in any of the past four fiscal years.”

The VA’s head of construction, for example, got high marks and $60,000 in bonuses even as new hospital building projects went $2 billion over budget.

The SEA has reasoned circuitously that SESers are all high-performing, because if they weren’t, they wouldn’t be SESers. It has also claimed that without added incentives, no one would apply for jobs paying $181,000.

The OPM memo encouraged agencies to give larger bonuses to a smaller number of people, rather than making bonuses for SESers a de facto entitlement.

“Agencies should ensure only… employees who have demonstrated the highest levels of individual performance… receive the highest annual summary ratings and the largest corresponding performance awards,” OPM said.

Despite high pay, SESers are almost never removed. The managers have repeatedly been figures of disgrace at VA hospitals. A TheDCNF analysis found that the department merely rotated failing execs from one facility to the next.

The strategy generated the illusion that bad apples in the management corps were being fired, when they not only weren’t, but effectively could not be. Even if an SESer is demoted, he is entitled to keep the same pay while he takes a new job with less responsibility.

Earlier this year, lobbying interests successfully removed a provision to limit VA bonuses to $360 million.

With President Barack Obama’s second term approaching its end, some of his political appointees are frantically trying to convert to permanent or career SES status to retain their high-paying government jobs and the accompanying generous benefits, a generally illicit practice known as burrowing.

The Aug. 12 OPM memo was first reported by FedSmith.

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