VA's shortfall didn't preclude bonuses for top staff

Congress plans hearings over $3.8-million in payouts by an agency struggling to provide care to the wounded.

Published May 4, 2007

WASHINGTON - Congressional leaders demanded Thursday that the Veterans Affairs secretary explain hefty bonuses for senior department officials involved in crafting a budget that came up $1-billion short and jeopardized veterans' health care.

Rep. Harry Mitchell, chairman of the House Veterans' Affairs subcommittee on oversight, said he would hold hearings to investigate after reports that budget officials at the Veterans Affairs Department received bonuses ranging up to $33, 000.

A list of bonuses to senior career officials in 2006 documents a generous package of more than $3.8-million in payments by a financially strapped agency straining to help care for thousands of injured veterans returning home from Iraq and Afghanistan.

Among those receiving payments were a deputy assistant secretary and several regional directors who crafted the VA's flawed budget for 2005 based on misleading accounting. They received performance payments of up to $33, 000 each, a figure equal to about 20 percent of their annual salaries.

Sen. Daniel Akaka, who heads the Senate Veterans' Affairs Committee, said the payments pointed to an improper "entitlement for the most centrally placed or well-connected staff." He has sent a letter to VA chief Jim Nicholson asking what the department plans to do to eliminate any bonuses based on favoritism.

"These reports point to an apparent gross injustice at the VA that we have a responsibility to investigate, " said Mitchell, D-Ariz. "No government official should ever be rewarded for misleading taxpayers, and the VA should not be handing out the most lucrative bonuses in government as veterans are waiting months and months to see a doctor."

One member of the House committee, Rep. Phil Hare, D-Ill., called for Nicholson to resign.

Also receiving a top bonus was the deputy undersecretary for benefits, who helps manage a disability claims system that has a backlog of cases and delays averaging 177 days in getting benefits to injured veterans.

The bonuses were awarded even after government investigators had determined the VA repeatedly miscalculated - if not deliberately misled taxpayers - with questionable methods used to justify Bush administration cuts to health care amid the burgeoning Iraq war.

Annual bonuses to senior VA officials now average more than $16, 000 - the most lucrative in government. All bonuses are proposed by division chiefs, then approved by Nicholson.

A VA spokesman said the payments are necessary to retain hardworking career officials. "Rewarding knowledgeable and professional career public servants is entirely appropriate, " spokesman Matt Burns said.

Several veterans' groups questioned the practice. They cited short staffing and underfunding at VA clinics that have become particularly evident after recent disclosures of shoddy outpatient treatment of injured troops at Walter Reed Army Medical Center in Washington.

"Rewarding bureaucrats for failure while veterans wait for care is inexcusable, " said Paul Rieckhoff, executive director of the Iraq and Afghanistan Veterans of America.

In a letter to Nicholson, Akaka also asked the department to outline steps to address disparities in which Washington-based senior officials got higher payments than their counterparts elsewhere.

"Awards should be determined according to performance, " said Akaka, D-Hawaii. "I am concerned by this generous pat on the back for those who failed to ensure that their budget requests accurately reflected VA's needs."

Burns, who said the department is reviewing Akaka's request, said many of the senior officials have the kind of experience that would be hard to replace.

"The importance of retaining committed career leaders in any government organization cannot be overstated, " Burns said.

VA officials characterized the agency's Washington-based jobs as more difficult, often involving management of several layers of divisions that would justify the higher payments.

In July 2005, the VA stunned Congress by suddenly announcing it faced a $1-billion shortfall after failing to take into account the additional cost of caring for veterans injured in Iraq and Afghanistan.

The admission, which came months after the department insisted it was operating within its means and did not need additional money, drew harsh criticism from both parties and some calls for Nicholson's resignation.