Judge Overturns Demotion of Second VA Official Accused in Job Scam

Philadelphia VA Director Diana Rubens. Cliff Owen/AP

The demotion of Department of Veterans Affairs' director for the Philadelphia region has been reversed by an administrative law judge.

The VA demoted Diana Rubens from director of the Philadelphia office to assistant director and reassigned her elsewhere after concluding she forced out her predecessor and then moved into the Pennsylvania job.

On Monday, William L. Boulden, chief administrative judge for the Merit System Protection Board in Philadelphia said VA's disciplinary action against Rubens was unreasonable and ordered that she be returned to her job in the Senior Executive Service with all "back pay, interest on back pay, and other benefits" within the next 60 days.

Rubens was the second director to appeal her demotion and reassignment to a Merit System Protection Board judge over allegations she maneuvered herself into a desired job at the expense of the previous director.

Last week, Kimberly Graves' demotion and reassignment from the St. Paul, Minnesota regional office was reversed by an MSPB judge in Chicago.

The VA demoted the two after the Office of Inspector General investigation found they abused their positions as SES officials and manipulated the employment system for their own benefit. The IG claimed they coerced the former directors of the two regional offices into taking transfers neither wanted, and then maneuvered themselves into the vacated jobs.

VA said the two were demoted for exercising poor judgement and creating a perception of impropriety.

Initially, both women held onto their SES status even though the regional directorships carried less responsibility. Also, in making the job-related moves the women were awarded a total of about $400,000 in relocation expenses. But in demoting the officials, the VA stripped them of their SES status, which reduced their annual salaries by about $50,000.

The department forwarded the IG report to the U.S. Attorney's Office for possible criminal charges but the office declined to prosecute and returned it to the VA for any disciplinary action.

Chief Administrative Judge Michele Szary Schroeder, who ruled on Graves' appeal, noted Graves broken no laws by retaining her SES salary or by receiving the relocation benefits.

Schroeder said Graves was able to show that in her demotion and reassignment, she was treated differently than a more senior official in her chain-of-command, Acting VA Under Secretary for Benefits Danny Pummill, whom the VA considered taking action against but failed to do so.

"If Ms. Graves is going to be disciplined for failure to exercise sound judgement by creating the appearance of impropriety, then it would only be reasonable if any other [SES] members … involved in the same situation were disciplined as well," Schroeder said.

In ruling on Rubens' case, Boulden named other officials that the IG linked to the improper job switches. These included former Under Secretary for Benefits Allison Hickey, who resigned amid the scandal in October, Pummill, and Beth McCoy, deputy under secretary for field operations.

McCoy had been Rubens' assistant and moved into her old job when she took the Philadelphia region directorship.

The VA ultimately took no action against Hickey, Pummill or McCoy.   McCoy, Boulden said, not only pressured Antoine Waller, director at the St. Paul office, to take a transfer to Baltimore, Maryland, but benefited directly from Rubens' move to that job.

McCoy facilitated Graves' reassignment to Philadelphia office, Boulden said, by signing off on a recommendation approving her for a relocation program. Rubens made it clear she wouldn't take the Philadelphia job without the program, which provided her about $300,000 for the cost of her home.

"Once [Rubens] was reassigned, McCoy stepped into appellant's former position with a sizable pay raise," Boulden said. "This creates the precise appearance of impropriety which appellant created ... Additionally, as an aggravating matter, McCoy, unlike appellant, actually pressured Waller to go to Baltimore."

For these reasons, he said, the onus was on the VA to show a legitimate reason for punishing Rubens and not McCoy.

Rep. Jeff Miller, a Republican from Florida who chairs the House Veterans Affairs Committee, urged the strongest possible disciplinary action against the Graves and Rubens. On Friday, he called Schroder's ruling "a twist of tragic comedy [as] VA's attempt to discipline Kimberly Graves was undone by its refusal to discipline other employees involved in this scandal."

Monday's ruling repeats that, he said.

"VA isn't consistently and fairly holding employees accountable and -- contrary to the repeated assertions of department officials -- VA leaders do not have the authority they need to swiftly discipline misbehaving employees," Miller said.

-- Bryant Jordan can be reached at bryant.jordan@military.com. Follow him on Twitter at @bryantjordan.