Veterans Affairs pays $142 million in bonuses amid scandals VA says the awards are to attract, retain employees

Show Caption Hide Caption Veteran Affairs pays $142M in bonuses amid scandals The U.S. Department of Veterans Affairs paid more than a $142 million in bonuses to executives and employees for performance in 2014. These bonuses were doled out even as scandals over veteran's health care plagued the agency.

WASHINGTON – The Department of Veterans Affairs doled out more than $142 million in bonuses to executives and employees for performance in 2014 even as scandals over veterans' health care and other issues racked the agency.

Among the recipients were claims processors in a Philadelphia benefits office that investigators dubbed the worst in the country last year. They received $300 to $900 each. Managers in Tomah, Wis., got $1,000 to $4,000, even though they oversaw the over-prescription of opiates to veterans – one of whom died.

The VA also rewarded executives who managed construction of a facility in Denver, a disastrous project years overdue and more than $1 billion over budget. They took home $4,000 to $8,000 each. And in St. Cloud, Minn., where an internal investigation report last year outlined mismanagement that led to mass resignations of health care providers, the chief of staff cited by investigators received a performance bonus of almost $4,000.

As one of his final acts last year before resigning, then-VA secretary Eric Shinseki announced he was suspending bonuses in the wake of revelations that VA employees falsified wait lists to meet wait-time targets — ostensibly as part of efforts to secure the extra pay. But he only curtailed them for a sliver of VA executives -- those in senior levels of the Veterans Health Administration, which oversees health care.

The agency has continued to pay performance-based bonuses to nearly half of agency employees, including in health administration, according to data provided to USA TODAY by the House Veterans’ Affairs Committee. In all, some 156,000 executives, managers and employees received them for 2014 performance.

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VA spokesman James Hutton said the vast majority of agency employees are committed to serving veterans.

“VA will continue to review tools and options in order to ensure the department is able to attract and retain the best talent to serve our nation's veterans, while operating as a good steward of taxpayer funds,” Hutton said.

That’s not good enough for Florida Republican Rep. Jeff Miller, chairman of the House VA committee, which has been investigating questionable VA bonuses for years. Miller says the most recent awards reflect a “disturbing trend of rewarding employees who preside over corruption and incompetence.”

He noted the agency paid more than $380,000 in 2013 performance bonuses to top officials at hospitals where veterans faced long delays in receiving treatment, including those under investigation for wait-time manipulation. “Rewarding failure only breeds more failure,” he said Tuesday. “Until VA leaders learn this important lesson and make a commitment to supporting real accountability at the department, efforts to reform VA are doomed to fail.”

Miller spearheaded – and the House passed – a measure last year that would have eliminated bonuses for VA senior executives for five years. But ultimately the House and Senate compromised on legislation that still allows the VA to hand out up to $360 million annually to executives, managers and employees.

Overall, the agency awarded $276 million in incentives in 2014, including retention and relocation payments, rewards for saving money on travel and coming up with inventive ideas, according to committee data.

The cash bonuses of $142.5 million were tied to performance reviews. Employees were eligible to receive the lump-sum payments for ratings of “fully successful” or higher. The payments ranged from $8 to as much as $12,705. Most were more than $500. The average payout was $909.

Here are some of the recipients:

-- In Tomah, Wis., the former chief of staff of the VA medical center there, Dr. David Houlihan — whom veterans nicknamed the “Candy Man” because of his prolific prescribing of narcotics — received a $4,000 bonus in December. That was nine months after an inspector general investigation report concluded he was prescribing alarmingly high amounts of opiates. And it was four months after Marine Corps veteran Jason Simcakoski, 35, died of "mixed-drug toxicity" as an inpatient at Tomah after he was prescribed a fatal cocktail of medications, including opiates. The inpatient pharmacist supervisor also received a $1,050 bonus in December. A spokesman for the Tomah VA declined to comment. The VA moved last month to fire Houlihan. A lawyer who represented him did not respond to a message Tuesday seeking comment.

-- In Colorado, the flawed facility construction project in Denver was overseen in part by several VA officials headquartered in Washington. Among them were Stella Fiotes, executive director of the VA’s Office of Construction and Facilities Management, who received a $8,985 bonus; Dennis Milsten, an associate director in the same office, who got $8,069; and Chris Kyrgos, former national acquisitions director, who took home $3,800. VA spokesman Hutton did not address those awards beyond his general statement about the VA continually reviewing incentive options.

-- In St. Cloud, Minn., chief of staff Dr. Susan Markstrom got a $3,900 bonus in 2014. She was cited in an internal investigation report in January 2014 that concluded mismanagement led to mass resignations of health care providers at the facility. The report also said she and other leaders oversaw a work environment where employees were scared to report problems. St. Cloud VA spokesman Barry Venable said issues cited in the report were in 2013 and that Markstrom is “an excellent chief of staff" whose "ongoing contributions to patient care and safety are significant.”

-- In Augusta, Ga., VA financial manager Jed Fillingim was awarded a $900 performance bonus. He drew scrutiny from Congress last year after news reports revealed he admitted drinking and driving a government truck to a VA meeting in 2010 and a co-worker fell from the truck and was killed. Fillingim resigned from the VA after the incident but was rehired in March 2011, WRC-TV reported. A spokesman for the VA Medical Center in Augusta, Brian Rothwell, said Fillingim is not employed there.

-- In Arizona, Sandra Flint, now-former director of the Phoenix regional VA benefits office, received a bonus of $8,348. Irate veterans confronted Flint at a public forum in August 2014 over a backlog of about 8,200 pending benefit claims. Included were 3,667 pending longer than 125 days. A spokeswoman at the office could not be reached for comment.

-- In St. Paul, Minn., VA benefits office director Kimberly Graves received a bonus of $8,697 for 2014 performance. A VA inspector general report issued in September this year concluded Graves improperly used her authority to engineer a switch into her current post in October 2014. IG investigators concluded she also improperly received an additional $129,000 related to the move. Graves pleaded the Fifth Amendment and declined to answer questions at a House VA Committee hearing last week.

Hutton, the national VA spokesman, underscored that no top senior executives in the Veterans Health Administration received bonuses. “The issues raised in your questions focus on challenges VA has faced in the past,” he said. “(T)he department is working diligently to plan a foundation for the future that will modernize VA’s culture, processes, and capabilities to put the needs, expectations and interests of veterans and their families first.”

Miller said the agency, if it hands out bonuses at all, should do more to ensure they don’t reward the wrong behavior. He also wants the agency to take back bonuses deemed inappropriate after they are awarded.

“VA loves to tout its bonus program as a way to attract and retain the best and brightest employees,” he said. “Unfortunately, often times the employees VA rewards with thousands in taxpayer-funded bonuses are not the type of people the department should be interested in attracting or retaining.”