A Department of Veterans Affairs manager who steered a $4 million contract to a relative was promoted to the second-highest position in the hospital weeks after she was caught and exposed in the national media.

Wendy Gillis was the project manager in charge of building a new health center for the Fayetteville, North Carolina VA hospital, which included helping find a plot of land to build it on.

The hospital evaluated 16 plots, five of which were owned by relatives of Gillis. A committee ranked them by suitability, and a non-Gillis plot was determined to be best. But in an “unusual” move, the VA selected land owned by William Gillis instead, and paid him $4.25 million.

“Oh my God, I shouldn’t be here,” Wendy Gillis said when scoping out her relative’s land for government purchase, according to the IG report. Her own house sits on land gifted by William Gillis, and she admitted she “may have” alerted family members of the bidding opportunity.

The damning report, issued in March 2015, was a major scandal leading to national media coverage, but the VA claimed taxpayers had no reason to be concerned because swift corrective action would be taken.

“The VA said on Thursday that it plans to provide refresher ethics training for all employees identified in the report, in addition to working with the appropriate department offices to determine whether administrative action is warranted,” The Washington Post wrote at the time.

Within three months, in June 2015, Gillis was put on a detail to serve as acting associate director, the second-highest position in the hospital, The Daily Caller News Foundation has learned. The elevation was a big promotion considering the fact that others were more senior and higher-ranked.

“Integrity is one of our core values, and we hold employees to high ethical standards,” VA spokesman Randal Noller assured the paper.

Noller declined to tell TheDCNF why, given the incongruence, anyone should trust the department’s frequent similar assurances following major misconduct, or why there was no punishment despite a damning IG report that “substantiated” problems, other than saying the department conducted a “thorough review of the OIG report and its exhibits.”

If Gillis were to be punished, it would have come from two bosses who had already been faulted by the IG for knowing about the problem and doing nothing to stop it — or from people who worked directly for them. By punishing Gillis, both would be implicitly incriminating themselves.

Noller ignored a question about this conflict of interest in doling out punishment for an apparent conflict of interest. He would say only that after conferring with human resources and the general counsel, a “review team recommended no administrative actions for the program manager, Ms. Gillis. The team did however recommend ethics training for the program manager. On April 30, 2015, Ms. Gillis completed an Ethics Refresher Course that was conducted by an Ethics Attorney.”

The report found that the hospital’s Director Elizabeth Goolsby and her boss Regional Director Daniel Hoffmann both “failed to properly discharge the duties of their positions when they individually learned of the possible conflict of interest and took insufficient action.” Goolsby was intimately involved in the planning of the new building. The IG recommended possible punishment for both bosses. (DATABASE: Who Runs VA? Not Veterans.)

Hoffmann told the IG he was never troubled by ethical implications so much as the prospect of the public finding out. “To me it was more a public relations issue,” he said.

In this case, the IG itself seemed to go to great lengths to make sure that the individuals who erred wouldn’t face consequences. It posted only a summary of the report on its website, and released the report only after a Freedom of Information Act request by the Fayetteville Observer.

The 28-page report refers to Gillis throughout only as “The Project Manager,” seemingly nullifying the point of undertaking resource-intensive investigations by making it difficult or impossible to know where the problem actually lies.

This was after the IG had already been faulted for protecting the people it was supposed to police by hiding reports, and after it had promised not to hide its reports anymore.

The report found “many discrepancies” with the real estate transaction, including strangely-dated letters of interest.

It said the Fayetteville Observer had even specifically brought the appearance of conflict of interest to the attention of VA managers early on, but they did not act on it and did not even reply to the paper’s question.

It also said Gillis’ actions seemed to violate the standards she was bound to as an accredited engineer.

[dcquiz] Employees involved in the site search, including Gillis, “certified that they would not disclose information relating to the site selection proceedings,” but anti-conflict of interest forms that were “usually a part of the selection process” were missing.

Gillis’ name is only known because the hospital’s chief of facilities was so troubled about what she saw and that no one in charge appeared to care, that she blew the whistle.

Goolsby touted the new building in a June 2013 newsletter that featured Gillis in a blue dress and construction hat performing the ceremonial groundbreaking on her newly-enriched relative’s land.

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