The Department of Veterans Affairs’ (VA) top lawyer claimed Wednesday that a boss’s offer of $305,000 in U.S. funds to get an employee to quit after she refused to help cover up that boss’s arrest did not constitute using taxpayer money to “stifle” a whistleblower.

The assertion was a slap in the face to Rosayma Lopez, a meek Puerto Rican woman who documents show raised the ire of her boss, hospital director Dewayne Hamlin, for refusing to lie for him. Hamlin asked her to write a report that could be used to fire Joseph Colon because Colon called attention to an intoxicated Hamlin being arrested at 3am with painkillers, the diversion of which is a major problem for VA hospitals.

When Lopez’s analysis of facts and rules concluded Colon shouldn’t be fired, Hamlin tried to fire Lopez for insubordination, and when that was blocked by ethics officials, he offered her $305,000 from the hospital’s budget for her to quit and agree not to re-apply.

VA general counsel Leigh Bradley would not give any evidence for why it was appropriate to purge Lopez from the workforce, claiming the Privacy Act prevented her from discussing it, even though a representative of the Office of Special Counsel (OSC), a federal agency that advocates for whistleblowers, and others at the hearing did not seem to think it prevented them from discussing cases in some detail.

She could not explain, even in the abstract, why such an employee would be compensated with one-third of a million dollars while the agency simultaneously contended that no one had wronged her and also that she was a bad employee.

Lopez’s firing paperwork says openly that she is being fired for not massaging the facts of an investigation to fit her boss’s preferred outcome–that Colon be fired. “You were again tasked to re-open your initial investigation to conduct a supplemental investigation … However, yet again, you reached the same conclusions,” Lopez’s firing notice says.

OSC said it was investigating Hamlin since the VA has not imposed any discipline on him on its own.

But Bradley defended Hamlin, saying the case wasn’t one of retaliation. In most cases when a VA employee does something embarrassing, the VA refuses to address it entirely, saying it can’t because there is an ongoing investigation. In this case, there is an OSC investigation ongoing, but VA felt comfortable weighing in by going to bat for the supervisor.

Members of the House Committee on Veterans Affairs repeatedly pressed VA officials in a hearing Wednesday on the payoff offer, which was exclusively revealed by the Daily Caller News Foundation last month. The $305,000, which is currently on the table–Lopez refused an earlier offer, and never asked for any money–would be the largest settlement in recent years.

It emerged at the hearing that Hamlin–the person who was retaliating against Lopez–was also the person who would authorize the hush money. (RELATED: Los Angeles VA Hospital Lost 30 Cars, Then Fired Worker Who Reported It)

Bradley said the VA has no national policies surrounding settlements and they take place at the hospital level. VA headquarters didn’t even know how much, and in what circumstances, its hospitals had paid off employees, until they asked the hospitals to tell them as part of a one-time request by Jeff Miller, the Florida Republican who chairs the House committee.

“I don’t want you to believe that nothing has been compiled,” Bradley said, just after admitting that nothing had been compiled.

Permitting officials who are trying to hide their own misconduct to authorize taxpayer money paying people to drop complaints against them is an obvious conflict of interest that is addressed by other agencies. A Department of Housing and Urban Development handbook, for example, calls for a form to flag to ethics officials: “Does the responsible management official directly involved in the dispute have settlement authority?”

Mark Takano, the top Democrat on the congressional committee, said he couldn’t be sure that local hospital leaders weren’t hiding settlements from headquarters as well as Congress. “I want to make sure there aren’t any settlements out there that the medical center directors are keeping from the secretary,” he said.

Colon told theDCNF following the hearing: “Lopez’s case is a prime example of how low an unethical leader at the VA will go. If the VA is truly committed to changing its retaliation culture, they must hold the senior leaders in Puerto Rico accountable.”

For weeks, Secretary Bob McDonald personally and his press team have both ignored questions from theDCNF about why they want Lopez to resign. Bradley said Deputy Secretary Sloan Gibson is aware of the Lopez situation, though the information that he got could have merely presented Hamlin’s perspective. Hamlin’s former top deputy said Hamlin stole from taxpayers within his first days on the job, then transferred him to a different state for objecting. He also has multiple felons working for him in high-level roles, including a sex offender working in human resources and a credit card thief running a procurement office, which the hospital has ignored questions about.

Bradley claimed that complaints filed by employees alleging mistreatment were visible in annual reports submitted to Congress, then obfuscated when members of Congress pointed out that the payments required employees to withdraw their complaints, keeping their allegations out of court and out of view–a primary motive for managers authorizing them despite their expense. She said the public isn’t ordinarily privy to the amounts VA pays to employees to induce them to quit, and the information was only being released because Congress demanded it.

One exchange about the Lopez case went like this:

Rep. Beto O’Rourke, Texas Democrat: Two things from Miss Lopez’s case in Puerto Rico since I know you can’t respond to our specific questions about it. Do we have a problem with using settlement agreements to stifle whistleblowers? Bradley: I don’t think that particular case would support that proposition. O’Rourke: This employee was trying to do the right thing, her superiors were trying to make her do the wrong thing. In an effort to make her go away, those supervisors offered her $150,000, which was raised to $300,000. Bradley: Hypothetically if we had one like this… O’Rourke: People at the local level, are they using settlements to stifle… Bradley: This case is anomalous. O’Rourke: So you don’t think we have a problem? Bradley: I don’t want to say we have a problem.

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