EXCLUSIVE: VA Watchdog Promised To Stop Misleading Congress, Then Rewrote Report To Hide Misconduct

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Luke Rosiak Investigative Reporter
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One week after promising to keep Congress and the public “fully and currently” informed, the Inspector General (IG) of the Department of Veterans Affairs (VA) rewrote a report to remove evidence that a senior VA executive tried to steer a massive government contract to her husband’s employer.

Laura Eskenazi, then-vice chairman of the Board of Veterans Appeals (BVA), “misused her public office” by plotting with her husband Jonathan to develop a plan that could lead to a major financial “opportunity” for CACI, a government contractor that employed him. Eskenazi then sought to cover it up with “dubious” claims, according to a 49-page draft version of the IG report that was obtained by The Daily Caller News Foundation Investigative Group (TheDCNF).

But the version given Congress and the public was only 10 pages discussing an unrelated and less serious rumor about Eskenazi, which the IG said it “did not substantiate.” Nothing was said in the final version about the contracting issue.

Michael Missal, then-newly appointed IG, promised to end activities that had earned the office a reputation as a lapdog, not watchdog, USA Today reported May 8, 2016. He was responding to revelations that his predecessors “failed to release the findings of 140 probes of VA health care and sat on the results of 77 wait-time investigations,” including burying evidence of deliberate manipulation of wait times in a “restricted” report years before the scandal led to dozens of deaths.

Missal’s office published a final report May 17 that was notable for how little it said, and the draft obtained by TheDCNF shows that is because its major findings and the evidence supporting them were removed.

Missal also promised to begin publishing reports online following outrage in Congress about a report on opioid abuse in a Wisconsin VA facility that was withheld until after a preventable death and after information about 40 veterans dying was watered down.

Eskenazi did “create the appearance of a conflict of interest,” “failed to discharge the duties of her position” and misled an ethics attorney, according to the draft report.

Her husband works for CACI on a records management tool it sold to the Department of Defense (DOD). Eskenazi had him help draft a policy paper advocating that VA purchase a new records management tool, which was submitted to the Deputy Secretary as the work of VA staff.

Emails show that her husband wrote to colleagues: “I hope (Laura hopes) to be able to make this happen as soon as it can … she has a SIGNIFICANT IT budget.”

“You also know all the stories about Laura working hard to get attention for the need to support a new appeals system,” he wrote. “I suggested to Laura that … an intro meeting … would be valuable (obviously with the hopes that it will lead to some opportunity [for CACI]).”

The couple arranged for CACI to demonstrate their work to VA officials. “I am specifically told not to make this a big deal and keep it low-key,” her husband wrote. “I know there is a [conflict of interest] concern,” he said, before strategizing that there is a “CACI contract vehicle in place can be leveraged somehow.”

“Eskenazi deleted her husband’s comments and then sent the email to her colleagues,” the draft report said.

The “vehicle” remark was an apparent suggestion that the government avoid competitively bidding the work by adding it on to an existing CACI contract with VA concerning a failing project for implementing electronic records that was causing considerable grief and financial losses for taxpayers.

The draft IG report said “Eskenazi told us that … she did not intend to provide her husband’s company with a future contracting opportunity,” and that she claimed the position paper was drafted using “public sources.”

But “their collaboration included her telling him specific VA business information concerning BVA’s need for an appeals management system, issues BVA was experiencing with [the current system], conversations she had with VA IT officials concerning the state of VA’s IT infrastructure, and BVA’s IT budget,” the draft report said.

“When her husband spoke in his emails about ‘future opportunity’, Ms. Eskenazi said, ‘I called him and I said, I basically yelled at him and I said stop,'” the draft report continued. “Eskenazi [then] asked her husband if he wanted to come to the software demonstration.”

“We find dubious Ms. Eskenazi’s assertions that she became upset with her husband for imposing his help upon her and that she tried unsuccessfully to get him to stop. Eskenazi asked her husband to help her and continued to engage him … Further, it was not until we notified her that she was under investigation that Ms. Eskenazi sought ethics advice from a VA ethics attorney, during which she failed to give full disclosure of all the relevant facts.”

Mike Nacincik, the IG’s spokesman, told TheDCNF the draft report “had not undergone our extensive review process” to ensure it was “accurate, fair and balanced. As a result of the review process … it was concluded that Ms. Eskenazi did not engage in a conflict of interest. The software in question, although initially developed by her husband’s employer, was actually owned by the government … Further, there was no additional contract award.”

But the draft had raised and refuted the idea that DOD owning the CACI program justified Eskenazi’s actions, citing emails showing the idea was that the demonstration would be used to create new work for CACI to modify the program for VA’s needs.

The draft report also included emails in which the Eskenazis discussed framing the demonstration as an intragovernmental project to make it more palatable and “pushing [DOD employees] to the side,” to which Eskenazi responded, “Need to discuss on the phone.”

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