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By Paying Off One Corrupt Manager, VA Protected Others From Discipline

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Luke Rosiak Investigative Reporter

Days before a January 2016 trial on whether Diana Rubens should keep her job, charges against her deputy were dropped, thus ensuring the subordinate couldn’t provide public testimony bolstering evidence of serious misconduct by the Department of Veterans Affairs (VA) senior executive.

The charges were dropped against Lucy Filipov by VA officials who were former Rubens subordinates. They did so despite an internal VA board’s recommendation that Filipov be fired for overseeing manipulation of data; shredding of official documents; double-paying benefits; abusing federal employment for financial gain; and terminating a whistleblower. Official action to fire her began in July 2015.

Not only did VA withdraw its firing of Filipov in December 2015 after she threatened to force a public hearing, the department also paid her lawyer, gave her blanket immunity, and created a work-from-home job for her. She agreed not to file complaints with the Merit Systems Protection Board (MSPB) or other judicial panels.

Complaints before the MSPB result in public hearings where sworn testimony would delve into who at VA did what, just when the fates of Rubens and another top VA executive, Kim Graves, hung in the balance.

Graves and Rubens were both previously Filipov’s boss. Filipov could have saved her own job by showing that others committed the same misconduct without repercussion, and that it was therefore unfair to punish her.

That was Rubens’ argument at her hearing. The judge restored her to her job, citing VA’s “inconsistent treatment.” Graves saved her own job in a hearing the same month by demonstrating that her “chain of command completely knew what the circumstances were and never once raised any concerns.”

Filipov also could have argued that she was simply following orders from her bosses.

Beginning in 2011, Filipov was assistant director and then acting director of the Philadelphia benefits office. Graves, who ran a supervisory office that oversees all the pensions offices in the region, was Filipov’s boss while Rubens was over both, working in VA’s Washington, D.C., headquarters.

Rubens and Graves got into trouble with relocation schemes in 2014. Rubens moved the director of the Philadelphia VA benefits office to Los Angeles against his will, then took over his job, which put her near family. She received $300,000 for relocation expenses. That’s when Filipov became Rubens’ deputy.

Rubens and Graves were exposed by a September 2015 inspector general report. The pair pleaded the Fifth Amendment before Congress in November 2015 while preparing for their MSPB hearings in January 2016. Then VA let Filipov off the hook with the December settlement.

Rubens’ position went to her former assistant, Beth McCoy, who got an $18,000 pay raise in the deal. The IG said McCoy “created the precise appearance of conflict of interest” by facilitating Rubens’ Philadelphia move.

At best, officials like McCoy would owe Rubens a favor, and at worst, they would be fearful of accusations against themselves that could emerge in a new MSPB hearing.

Ken Crandall, the VA whistleblower Filipov illegally fired after he alerted authorities to corruption, told The Daily Caller News Foundation he believes managers made the deal with Filipov to avoid having themselves or friends implicated.

In 2012, he sent an email to VA Under Secretary for Benefits Allison Hickey outlining mail shredding and duplicate payments, “and five days later Lucy Filipov fired me.” A judge ordered VA to reinstate him, and the next day, he was fired a second time. He went back to court, charging that he was being fired again for exposing waste and corruption that his boss wanted hidden.

“I was going to win again, and we wound up settling out of court,” Crandall told TheDCNF. By authorizing a settlement with Crandall, VA managers avoided officially being found guilty of retaliation—while also letting them keep a known whistleblower from returning to work.

100-page inspector general report confirmed Crandall’s allegations and led to calls for Filipov’s firing.

A former career federal senior executive, speaking on condition of anonymity, told TheDCNF VA managers would almost certainly have been able to make the firing stick, and that there seemed to be a hidden reason why they folded in the settlement with Filipov.

“From a federal manager’s standpoint, oftentimes it comes down to if you’ve got skeletons in your own closet, you’re putting yourself at personal risk,” they said.

Cheri Cannon, a federal employment lawyer with the Tully Rinckey law firm, said Filipov “had to have some sort of leverage, otherwise there’s no reason” for VA managers not fire her. “Do politics come into it? Yes. Do concerns about media attention? They can.”

The inspector general report on Rubens and Graves portrayed a VA office in which friends took care of friends.

Hickey — who never responded to Crandall’s email — was Rubens’ boss, and promised to “be all in to help and make [the transfer] happen,” according to the inspector general. Hickey resigned in October 2015, thereby avoiding having to testify against Rubens before Congress the next month.

Rubens was behind at least one incident of misconduct for which Filipov was faulted. Filipov placed congressional investigators, who had arrived to look into corruption at her facility, in a room that was bugged “with activated microphones and an activated camera.”

One found a notepad saying VA staff should “ignore” the investigators, especially one with a “stick up her a–.” Also written on the page were the names of two whistleblowing employees, who were later harassed.

It was Filipov’s notebook, but Rubens later said the notes represented instructions from her.

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