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98–693 2016

AN EXAMINATION OF THE VA OFFICE OF INSPECTOR GENERAL’S FINAL REPORT ON THE INAPPROPRIATE USE OF POSITION AND THE MISUSE 

OF THE RELOCATION PROGRAM AND INCENTIVES 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

WEDNESDAY, OCTOBER 21, 2015 

Serial No. 114–38 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.fdsys.gov 


VACREP0180 with DISTILLER
(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

RALPH ABRAHAM, Louisiana 

LEE ZELDIN, New York 

RYAN COSTELLO, Pennsylvania 

AMATA COLEMAN RADEWAGEN, 

American Samoa 

MIKE BOST, Illinois 

CORRINE BROWN, Florida, Ranking 

Minority Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

RAUL RUIZ, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

TIMOTHY J. WALZ, Minnesota 

JERRY MCNERNEY, California 

JON TOWERS, Staff Director 

DON PHILLIPS, Democratic Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to prepare 

both printed and electronic versions of the hearing record, the process of converting between 

various electronic formats may introduce unintentional errors or omissions. Such occurrences 

are inherent in the current publication process and should diminish as the process is further 

refined. 


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C O N T E N T S 

Wednesday, October 21, 2015 

Page 

An Examination of the VA Office of Inspector General’s Final Report on 

the Inappropriate Use of Position and the Misuse of the Relocation Program 

and Incentives ...................................................................................................... 1 

OPENING STATEMENT 

Jeff Miller, Chairman .............................................................................................. 1 

WITNESSES 

Ms. Linda Halliday, Deputy Inspector General, Office of Inspector General, 

U.S. Department of Veterans Affairs ................................................................. 3 

Prepared Statement ......................................................................................... 21 

Mr. Danny Pummill, Principal Deputy Under Secretary for Benefits, U.S. 

Department of Veterans Affair 

Accompanied by: 

Ms Diana Rubens, Director, Philadelphia and Wilmington Region Office, 

VBA, U.S. Department of Veterans Affairs, 

Mr. Robert McKenrick, Director, Los Angeles Regional Office, VBA, 

U. S. Department of Veterans Affairs, 

Ms. Kimberly Graves, Director, St. Paul Regional Office, VBA, U.S. 

Department of Veterans Affairs 

And 

Mr. Antione Waller, Director, Baltimore Regional Office, VBA, U.S. 

Department of Veteran Affairs 


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(1) 

AN EXAMINATION OF THE VA OFFICE OF INSPECTOR GENERAL’S FINAL REPORT ON 

THE INAPPROPRIATE USE OF POSITION 

AND THE MISUSE OF THE RELOCATION 

PROGRAM AND INCENTIVES 

Wednesday, October 21, 2015 

U.S. HOUSE OF REPRESENTATIVES

COMMITTEE ON VETERANS’ AFFAIRS

Washington, D.C. 

The committee met, pursuant to other business, at 10:30 a.m., in 

Room 334, Cannon House Office Building, Hon. Jeff Miller [chairman of the committee] presiding. 

OPENING STATEMENT OF CHAIRMAN JEFF MILLER 

Present: Representatives Miller, Lamborn, Bilirakis, Roe, 

Benishek, Huelskamp, Coffman, Wenstrup, Walorski, Abraham, 

Zeldin, Costello, Radewagen, Bost, Brown, Takano, Brownley, 

Titus, Ruiz, Kuster, O’Rourke, Rice, McNerney, and Walz. 

The CHAIRMAN. I first want to recognize a guest in the audience. 

We have the National Commander Dale Barnett from Georgia with 

us today. 

Commander, thank you for your attendance and thank you for 

your service. We thank you all for what The American Legion does. 

And, Commander, thank you for your service and thank you for 

being here with us today. 

I think it is important for members to have an opportunity to listen to the IG and what they found in their report as well as the 

recommendations that they have made to the secretary. 

This report lays out pretty clearly the intent of two senior executives, Ms. Rubens and Ms. Graves, to move to Philadelphia and St. 

Paul respectively, and that they appear to have used their own positions of authority and their own relationships with the former 

under secretary to their advantage. 

Also according to the report, two subordinates, Mr. Waller and 

Mr. McKenrick, were then forced to move to positions they did not 

desire leaving their positions open for their superiors. 

The report concluded that not only did Ms. Rubens and Ms. 

Graves use their positions to inappropriately make these RO director positions available, they also manipulated the relocation system 

to spend hundreds of thousands of dollars to move to their respective locations. 

I want to make it clear that based on our reading of VA’s policy 

prior to this IG report that the relocation program was available 


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for all SES employees within the department, which by the way I 

believe is an abuse of taxpayer dollars. Regardless, I understand 

that since Ms. Rubens and Ms. Graves are both SES employees 

they are both eligible to receive this program under that policy. 

The report, however, makes it very clear that the IG believes 

they orchestrated the whole transfer for their own personal and financial gain. Last April we first discussed VA’s relocation program, 

specifically Ms. Rubens’ move, a move in which she received more 

than $288,000 in relocation expenses, and we requested the IG to 

look into allegations concerning financial benefits and preferences 

that may have been given. 

Until the IG report came out in September the department 

strongly supported Ms. Rubens’ move and her role in her official 

capacity in Philadelphia. It was not until the report came out that 

VA decided to backpedal on this and concur with all of the IG’s recommendations. As I said before, this report is damning and it deserves to be examined by this committee. 

We cannot the request the IG to do an investigation, a thorough 

one at that, and then once they are done refuse to do anything 

about it while we await actions on the department’s behalf. That 

is why we are here this morning. This is our role as an oversight 

committee. We are not here to hold VA’s hand and bend to their 

every request. That has happened far too often in the past under 

both parties and has contributed to the current situation that we 

are in. We are here to look at the facts before us and to fairly ask 

the right questions to ensure transparency between this committee, 

the department, and the American public. 

Although our other witnesses are not here today, we will hear 

from the VA Office of the Inspector General and I hope all members will take this opportunity to learn more about what is in the 

final report and the recommendations that have been made to the 

Secretary. 

The CHAIRMAN. Ms. Brown, do you have any comments before 

Ms. Halliday begins? 

Ms. BROWN. Yes, sir. 

The CHAIRMAN. Ms. Brown, you are recognized. 

Ms. BROWN. Thank you, Mr. Chairman, for holding this hearing. 

This morning we will be considering a report issued by the VA Inspector General on September 28th, 2015 regarding the inappropriate use of the position and misuse of reallocation programs and 

incentives. I am very concerned about the allegations contained in 

this report. I also believe that VA employees deserve to have a 

process that is fair and enable them to process necessarily to reach 

a fair conclusion. I have urged the Secretary to take suitable action 

after the VA has considered all of the evidence. 

The VA is still in the process of making a determination. I understand the sensitive nature of this decision and I want to stress 

again that I am not urging a certain action but rather that a suitable action be taken at the appropriate time. I know that all members of this committee realize the sensitive nature of this morning’s 

hearing and the balance we are trying to take between the committee’s important oversight duties and the VA’s ongoing investigation 

of these matters. 


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I look forward to the discussion of the VA IG’s report on this 

matter. We know that the vast majority of all Veterans Benefits 

Administration employees, many of them veterans themselves, 

work hard everyday to provide veterans with the benefits they 

have earned. This is why the allegations and conclusions of this IG 

report is so troubling. We need to work together to ensure all Veterans employees, from senior leaders to front line employees, know 

that they will be rewarded for working hard and that any abuse 

of a position or authority will simply not be tolerated. 

So let us discuss the VA IG reports. We are also waiting the VA 

determination regarding the issue raised in this report and the results of the VA review of incentive and relocation processes. This 

is the area where the committee has a direct oversight interest in 

to make sure that relocation incentives are used properly. 

Thank you, Mr. Chairman, and I yield back the balance of my 

time. 

The CHAIRMAN. Thank you very much, Ms. Brown. Thank you 

again members for being here. With us this morning is Ms. Linda 

Halliday, Deputy Inspector General, if you would, Ms. Halliday, 

please come up, with the VA Office of the Inspector General. We 

have heard her testimony on other issues in the past. We appreciate you being here today. And you are recognized for five minutes 

for your opening statement. Thank you very much. 

STATEMENT OF MS. LINDA HALLIDAY 

Ms. HALLIDAY. Thank you. Mr. Chairman and members of the 

committee, thank you for the opportunity to discuss the results of 

the OIG’s recently published report on the use of the relocation 

program and incentives within VBA. The report detailed results of 

our administrative investigation of allegations that VBA senior executives inappropriately used their position for personal and financial benefit and that VBA misused the VA relocation program for 

the benefit of its senior executive service workforce. 

Our statements and comments will be limited in order to preclude any allegation that our testimony unduly influenced VA or 

the Department of Justice regarding potential administrative or 

criminal action. 

I am accompanied by Mr. Nick Dahl, the Director of the OIG’s 

Bedford Office of Audits and Evaluations; and Ms. Linda Fournier, 

Director of the OIG’s Administrative Investigation Office. 

In March this committee and the Senate Veterans’ Affairs Committee requested we review allegations concerning the relocation of 

a VBA headquarters senior executive to the position of the Philadelphia VARO Director. The allegation included questions about 

the relocation package and the retention of salary, even though the 

VARO Director position had decreased responsibilities. We were 

also asked to conduct a broader review of VA’s permanent change 

of station, or PCS, relocation expense program. 

I would first like to share some background information. The federal travel regulation states that an employee transferring in the 

interest of government from one agency or duty station to another 

for permanent duty that is located at least 50 miles from their duty 

station is eligible for relocation expense allowance. Examples of the 

relocation expenses include transportation, shipment and storage of 


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household goods, real estate expenses. Employees can also be eligible for temporary quarters, subsistence expense, which would include temporary lodging, meals and tips, dry cleaning expenses. 

Federal agencies can offer employees assistance through the appraised value offer program, known as AVO, which is designed to 

help employees sell their primary residence. The program operates 

as follows: while the employee’s property is for sale two separate 

appraisals are conducted to estimate the value of the home. The 

average of the two appraisals serves as a backup offer for instances 

when the employee does not sell their home in a timely manner. 

If the home does not sell after being on the market 60 days the employee may accept the AVO. In these instances a contractor buys 

the property from the employee for the average appraised value. 

Each VA administration defines which employees are authorized to 

participate in the AVO. The then Under Secretary for Benefits told 

us that all VBA SES employees were offered AVO benefits when 

making a PCS move. If the employee accepts the AVO, VA pays a 

contractor a home sale acquisition fee. In fiscal year 2014 this fee 

was 27.5 percent of the AVO. 

One last piece of background information pertains to VA’s SES 

pay structure. In 2004 VA established a pay band structure for 

SES pay. In 2014 VA’s SES salaries ranged from approximately 

$120,000 to $181,000. VA categorized their SES positions into three 

different pay bands based on the scope of responsibility for each position, with pay band one representing the highest level of complexity and pay band three representing the lowest. 

The position of Deputy Under Secretary for Field Operations is 

a VA central office based SES pay band one position located in 

Washington, DC. The position is responsible for the oversight of 

four area offices and 56 VAROs within VBA. The Director of the 

Philadelphia and Wilmington VAROs is an SES pay band three position and involves significantly less responsibilities than the Deputy Under Secretary for Field Operations. 

VA paid a total of about $274,000 related to the move of the Deputy Under Secretary for Field Operations to move from the Washington, DC., area to the Philadelphia area. The payments included 

about $33,000 paid to Ms. Rubens, who held that position, primarily to reimburse her for lodging, meals, tips, and dry cleaning 

expenses. Payments to other entities totaled approximately 

$241,000 and included about $212,000 to the home sale contractor, 

$16,000 to the company that moved and stored Ms. Rubens’ goods, 

and about $13,000 in service fees that went to VA’s Financial Service Center and the VA Technology Acquisition Center. 

Ms. Rubens did retain her pay despite the decrease in job responsibilities. But according to the federal regulations, the SES rate of 

basic pay for a career senior executive may only be reduced if the 

senior executive has less than a fully successful annual summary 

rating or has failed to meet the performance requirements of a critical element. From fiscal year 2009 to the time of her reassignment 

the Deputy Under Secretary for Field Operations was rated better 

than fully successful on all performance appraisals. Therefore we 

concluded that all critical elements were met. Based on applicable 

federal regulations we determined VA could not reduce the annual 


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salary upon reassignment despite the decrease in the scope of responsibilities. 

We also conducted a limited assessment of VBA’s use of the PCS 

relocation program. We determined VBA’s reassignments of seven 

general schedule GS–15 employees who were promoted to SES, and 

another 15 SES employees who were moved to different SES positions. We determined that VBA management used reassignments 

through the PCS program as a way to increase SES pay. 

It is important to note from fiscal year 2010 to 2013 the U.S. Office of Personnel Management guidelines precluded all SES employees from receiving annual pay increases. Further, in 2012 the 

then VA Secretary determined no VBA executive would receive performance awards based on concerns over excessive backlog of veterans disability claims. 

Twenty-one of 23 reassignments included salary increases. These 

VBA reassignments resulted in annual salary increases totaling 

about $321,000, which averaged about $15,300 per individual. We 

identified concerns with the salary increases because they did not 

seem to consistently reflect changes in the position’s scope of responsibility. 

We also found VBA paid seven employees relocation incentives 

when they moved to new positions. The seven relocation incentives 

totaled $140,000. We determined that VBA did not properly justify 

these incentives. Five relocation expenses were not justified because job vacancies were not announced, or the positions were 

filled before candidates who applied were considered. The two other 

incentives were not timely justified as justifications were signed 

months after the job announcements were posted. The then Under 

Secretary for Benefits and the then VA Chief of Staff approved the 

VBA’s relocation incentive justification and payments. 

VBA paid relocation expenses for 20 of the 23 reassignments, 

which included AVO related expenses for 11 of the moves. Specifically VBA spent about $1.3 million on relocation expenses for these 

moves. While these reassignments resulted in significant cost to 

VA, these expenses were allowable under the federal relocation program. VBA also spent a total of $1.8 million for the 23 reassignments we reviewed. While we did not question the need to reassign 

some staff to manage a national network of VAROs, we concluded 

VBA inappropriately used VA’s PCS relocation program for the 

benefit of its SES workforce. 

In conclusion our findings demonstrate the need to strengthen 

controls and oversight in order to improve financial stewardship in 

the program and we are pleased to see the department is reviewing 

the evidence and taking this report seriously. But at this point I 

do not have specifics as to how they are going to implement the 12 

recommendations. They did give me implementation dates that 

spanned October 31 through December 31 and I expect more detail 

at that time. 

This concludes my statement and I will answer any questions. 

[The prepared statement of Linda Halliday appears in the Appendix] 

The CHAIRMAN. Thank you very much. All of my questions this 

morning for the IG are based on the evidence used to complete 

their report. Ms. Halliday, at the hearing on April 22nd Mr. PumVerDate Aug 31 2005 13:34 Oct 27, 2016 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 Y:\98-693.TXT PAT

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mel testified that the AVO program was necessary to fill the Philadelphia RO position because it was, quote, tough to fill. In your 

opinion was the AVO used in Ms. Rubens’ case because it was 

tough to fill? 

Ms. HALLIDAY. No. I believe that the Philadelphia VARO offered 

significant management challenges to whoever took over the leadership. But you have to advertise positions and there were candidates. I think our report says there were approximately 120, but 

do not quote me on the number. 

The CHAIRMAN. At the April—did you find it? 

Ms. HALLIDAY. No, I have the Philadelphia one. 

The CHAIRMAN. That is all right. At the April 22nd hearing Ms. 

Rubens testified that the AVO program was, quote, part of a benefit program that VA offers to ensure transition in as quick and as 

smooth as possible to an office that needed leadership changes, end 

quote. Based on your investigation is this the reasoning that VA 

used the AVO program in Ms. Rubens’ case? And if not, what was 

their reasoning? 

Ms. HALLIDAY. I believe the reason went to Ms. Rubens saying 

that she would not execute the move without the AVO. Originally 

she agreed, she volunteered for the position and agreed to take it. 

And then a few days later she said she would not take the position 

without the AVO benefit. And that was pushed through and approved by I believe the VA Chief of Staff—— 

The CHAIRMAN. Should that document have been signed prior to 

accepting the position? 

Ms. HALLIDAY. You would hope so. 

The CHAIRMAN. In your opinion did Ms. Rubens and Ms. Graves 

use their positions of authority to move Mr. Waller and Mr. 

McKenrick for their own personal and financial gains? 

Ms. HALLIDAY. We concluded that in our report. 

The CHAIRMAN. Were Mr. Waller and Mr. McKenrick essentially 

forced to move to Baltimore and to Los Angeles respectively? 

Ms. HALLIDAY. There are different facts that go into each move. 

We did, we interviewed those individuals. We believe we got sufficient information, feedback from them, that they felt that they 

were pushed to take those moves. 

The CHAIRMAN. Did Ms. Rubens indicate to the IG that Mr. 

McKenrick reached out to her to volunteer his name for the Los 

Angeles position? 

Ms. HALLIDAY. I believe Ms. Rubens said that her and Mr. 

McKenrick spoke and he mentioned he had interest in the LA position. But this was right on the heels of being part of the review 

panel tasked to fill the vacancy. And when we spoke with Mr. 

McKenrick he flat out said he did not want to go to Los Angeles. 

He was given only a week to effect the move and that it put him 

further away from his children. 

The CHAIRMAN. What were your conclusions about the role that 

the current Deputy Under Secretary for Field Operations, Ms. 

McCoy, played in moving Mr. Waller out of St. Paul so that Ms. 

Graves could take that position? 

Ms. HALLIDAY. I think the actions were inappropriate. 

The CHAIRMAN. According to the report you have made a criminal referral of evidence from this investigation to the U.S. Attorney 


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for the District of Columbia for possible criminal charges. Can you 

tell us what led you to take this action and what update you may 

have received from the District Attorney’s Office if they will pursue 

the case? 

Ms. HALLIDAY. What led us to making this referral was because 

it was a misuse of position that cost the federal government almost 

half a million dollars when you look at the two, both Ms. Rubens’ 

and Ms. Graves’, actions. That seemed to be sufficiently high 

enough, and to look like there was manipulation in the email information that we received that they pushed the two individuals out. 

I have no information as of this point from the referral for Department of Justice other than they are evaluating the evidence. 

The CHAIRMAN. Ms. Brown. 

Ms. BROWN. Thank you. The report tells us that the VA could pay as much as $280,000 in relocation expenses to move Ms. 

Rubens from VA’s central office in Washington, DC., to Philadelphia. Once all PCS claims are processed, why did it cost so much 

to move Ms. Rubens from Philadelphia, since it is so close? Can you 

give us a break down of the cost? Specifically, who received what 

and did you find anything improper about the amount of reimbursements? Basically, did Ms. Rubens make any money on the 

move? 

Ms. HALLIDAY. Okay. For the amount of money that we identi- fied, the $274,000, Ms. Rubens only received approximately 

$33,261. And she is paid for temporary lodging, her real estate expenses, travel costs en route, and miscellaneous expenses associated with the move. Our general consensus is that the majority of 

those expenses were allowable under the federal travel regulations 

and there really was not a problem with the reimbursement. We 

did find two expenses, one for alcohol and one lacking receipts. I 

considered them somewhat de minimis but they are unallowable. 

And you know, you have to justify that. Federal travel regulations 

are what they are. 

The next big amount that everyone should be aware of is there 

was an amount paid to Brookfield and it is for the 2014 home sale 

fee. And that is the 27.5 percent of the average appraised value of 

the $770,000 for her house. That does not go to Ms. Rubens, that 

goes to a contractor that is under a GSA contract, not a VA contract. 

Ms. BROWN. On that point, on that very point, that is my concern. Because General Service, as I mentioned before and I mentioned it to you when you were here before, this is a government 

wide program. All of the agencies operate under this program. Now 

as of October 1, 2015, the VA will not longer offer this program to 

the VA employees. This raises the larger issue as to whether this 

program is being administered properly across the government, not 

just VA. I am concerned that the program as well, if it is not working for the VA, are they administering something wrong? Or is it 

a problem across the board? 

You indicated you only could speak to VA. I am writing a letter 

to the GAO and asking them to give us an update as to how this 

program is working government wide. Because I think it is unfair 

if all of the other agencies are administering this program and it 

is working, and the VA employees are going to be left out. And we 


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are talking about top level. But this program is available for all VA 

in the program that are moving and this is allowed for them. How 

is this going to affect the VA employees? 

Ms. HALLIDAY. First, I think your actions to ask GAO are very 

appropriate. I think you should look at this. There is a substantial 

amount of money in the AVO, the percentages paid for these home 

acquisitions. And depending on the competitive market that has 

rising prices versus dropping, sometimes it is a benefit, sometimes 

it is not. 

As far as VA deciding not to participate in the AVO program, I 

believe that is their choice. They have a couple of choices, not to 

participate or to put appropriate levels of controls in place so the 

type of activities that we described in our report do not continue 

to happen. My understanding is that they are looking at other recruiting tools that might be more appropriate but I do not have information on that at this time. As I said earlier, I am expecting 

more detail from VA. I do not necessarily think that the AVO program is the only program that could be effective here. But at this 

time I think that it is important to have some recruiting tools to 

get the best of the best to the positions they need to be in. 

Ms. BROWN. Thank you. I yield back. 

The CHAIRMAN. Mr. Lamborn, you are recognized for five minutes. 

Mr. LAMBORN. Thank you, Mr. Chairman. I appreciate your leadership and the ranking member’s leadership and questions. We 

really need to get to the bottom of this and I think there have been 

some excellent questions so I will just build on what has already 

been asked. And thank you for the work that you did. 

To follow on what Ranking Member Brown just asked you, it 

looks to me like there is some abuse going on. Was this unique to 

the VA or a subset within VA? Or is this potential out there for 

the entire government, and maybe there is abuse in other departments? 

Ms. HALLIDAY. I would think the potential exists and that each 

department, it would be dependent upon whether they had adequate controls in place to process all of the requests and authorizations made under the program. As far as what percentage they 

may pay for a company to pick up the home sale, this is in the contract. GSA puts the terms of those contracts and all federal agencies rely on it. 

Mr. LAMBORN. So at a minimum you would urge us to look at requiring the VA to rewrite its regulations in this area? And at a 

maximum take this to the rest of the government, maybe go to the 

OGR committee for instance? 

Ms. HALLIDAY. I would think it should be looked at government 

wide. I would also say that I believe VA is rewriting it. 

Mr. LAMBORN. Now that is the AVO program. Also I think it does 

not make sense that if someone volunteers for a lower position, 

that is a lower responsibility position, they keep the same high salary. Now this is not maybe going to happen everyday. But what 

would keep someone from sort of checking out and really kind of 

abdicating their responsibilities, taking a really low responsibility 

job? I mean, in this case it was $15,000. Normally it would be the 


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lesser salary, but way, way less. I mean, is there, what kind of potential is there for abuse here? 

Ms. HALLIDAY. I think there is a lot of potential. But it would 

not be abuse at this point, since that is allowable under OPM regulations. I definitely think it should be looked at. When you look at 

the private sector, your pay is commensurate with your responsibilities. I see no reason why it would change. 

Mr. LAMBORN. And once again, is this unique to the VA? Or is 

it government wide? 

Ms. HALLIDAY. No, government wide, sir. 

Mr. LAMBORN. Okay. And do you have any evidence that other 

departments have seen this happen? Maybe that never hit the 

news? 

Ms. HALLIDAY. I have no evidence to that. My scope of responsibility stays within the VA. 

Mr. LAMBORN. Okay. And then a real specific question on the 

facts right in front of us that led to this whole hearing today. Let 

me see, where did I have it? Okay. In your report you found that 

in March, 2014 Ms. Rubens requested a market analysis of her 

DC., area home from the VA’s AVO contractor, Brookfield. Did the 

evidence gathered give you any indication as to why she requested 

this analysis when she did? 

Ms. HALLIDAY. I would have to take that for the record. I am not 

sure. 

Mr. LAMBORN. Okay. If you could, please. And with that, Mr. 

Chairman, I yield back the balance of my time. 

The CHAIRMAN. Thank you. Mr. Takano, you are recognized for 

five minutes. 

Mr. TAKANO. Thank you, Mr. Chairman. Following on Mr. 

Lamborn’s questioning, your report states that according to Mr. 

Pummel, quote, the VA Chief of Staff at the time said that an SES 

employee’s salary could be increased as long as the executive was 

moving to a different location, end quote, despite OPM guidelines 

preventing SES employees from annual pay increases and establishing a salary cap. Was the VA Chief of Staff correct? I understand that for many other transfers you examined, employee responsibility decreased, which was not reflected in their salaries. 

And it is essentially a similar question that Mr. Lamborn asked. 

So was the Chief of Staff’s statement correct? 

Ms. HALLIDAY. Partially. 

Mr. TAKANO. Okay. 

Ms. HALLIDAY. I think there was too broad of an interpretation 

applied here. I do not think, I think if they asked the Chief of Staff 

again can the salary increase if the responsibilities of the position 

drop substantially, the answer would be different. 

Mr. TAKANO. Okay. I would like to know if under current OPM 

policy SES employees are allowed a pay increase when being transferred? 

Ms. HALLIDAY. Yes, if they go to a different position. 

Mr. TAKANO. They go to a different position and it is more responsibilities. 

Ms. HALLIDAY. Yes. 

Mr. TAKANO. All right. Well how can the VA ensure that when 

employees transfer into a position with less responsibility, their 


VACREP0180 with DISTILLER
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new salary reflects that decreased responsibility? Is it through the 

rewrite of regulations? Or—— 

Ms. HALLIDAY. I believe that that has to be addressed with the 

Office of Personnel Management, who set up the guiding rules for 

pay setting for SES. 

Mr. TAKANO. So that must be systemic. It has to be beyond just 

the VA. It has to be a systemic policy determined by the Office of 

Personnel Management. Well—— 

Ms. HALLIDAY. VA may have more executives that transfer because it is in such a large decentralized environment, and there are 

many openings across the nation, where maybe some other federal 

agencies are more headquarters based. So we have a lot of that in 

the VA. 

Mr. TAKANO. The PCS and AVO programs were created for a reason, to help ensure that the federal government is able to get the 

right people into the right jobs and to fill vacancies, particularly in 

high level positions. I know that the VHA in particular has had a 

tough time filling vacancies. Do you know if VBA faces a similar 

problem as the VHA? 

Ms. HALLIDAY. From my understanding, but I do not have empirical evidence, VBA does face the same problem in filling the vacancies across its 56 VAROs. 

Mr. TAKANO. You already answered that there was not, in the 

particular example in Philadelphia, that there was not a shortage 

of candidates. You had 120 candidates. But I want to ask a more 

general, is there, might that be an exception? Are there, is there 

a shortage of suitable candidates for high level positions at VBA? 

Or you are not able to really answer that question? 

Ms. HALLIDAY. I would not have the evidence on that. I looked 

at two positions, what was advertised for Los Angeles, what was 

advertised for Baltimore here. 

Mr. TAKANO. Okay. My last question was does the VBA have 

trouble recruiting talent? And that is probably something—— 

Ms. HALLIDAY. That is something for the department to answer. 

Mr. TAKANO. Okay, thank you. I yield back, Mr. Chairman. 

The CHAIRMAN. Thank you very much. A quick question, was the 

Philadelphia RO position ever advertised? 

Ms. HALLIDAY. Yes, it was. No, I am sorry. It was not. It was not. 

I am getting Baltimore and LA confused. 

The CHAIRMAN. I appreciate it. 

Ms. HALLIDAY. But Philadelphia was not. 

The CHAIRMAN. So the position where Ms. Rubens went was not 

advertised. Thank you. Dr. Roe. 

Dr. ROE. I thank the chairman. I am going to bring us down to, 

Ms. Halliday, thank you again for being here and providing this information for us. One of the things I think you see across the country is a loss in faith of government, and I think this is a poster 

child for it. You have a situation where we have our social security 

recipients are getting no increase this year at all. I am going to tell 

you about a couple of guys I know back home. 

One is Bud Pate. He is a retired Baptist preacher, a Marine, lost 

his arm in Vietnam. Randy Kingston, both of these guys are 

friends of mine. Randy is a paraplegic, a young man, had not married, became a paraplegic after, in Vietnam during an explosion, a 


VACREP0180 with DISTILLER
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battle. And this young woman married him, who knew him ahead 

of time, knew him when he was whole, but married him, has been 

faithful together all these years. And these veterans that we see 

out there are having to struggle to get their benefits of a few hundred dollars or a few thousand dollars a month. And then I see 

things where we are paying somebody $33,000 to drive up the road 

140 miles and live in a hotel for a few days until they can get a 

house. If you paid 55 cents a mile that is a $77 trip, not a $33,000 

trip. And if you eat at the Four Seasons every night, I do not see 

how you can spend $33,000. And that is not what average people 

do out there. 

When average people like me, that go out and work for themselves for 30-something years, and I do less, next year I get paid 

less. That is what happens in the real world. And that is not what 

is happening here. And I go home and see these injured and disabled veterans. And then I come up here and hear where these senior officials, it seems like they have manipulated a system that 

they know how it works to, the VA has shifted people around. 

When we said, no, you cannot raise people’s salaries during this 

particular time so we can sort all this out, but they figured out how 

to do it. And that sort of cynicism is really pervasive, I think, when 

you go home and try to explain. 

And listening to your testimony, which has been extremely compelling to me, I just want to get that on the record. And I think 

we have a lost trust. And so I understand this program, two people 

come in and appraise your house. I looked up, while we are doing 

this, on the web. The average time is about 60 days on the market 

around here for a home. If I sell my home here, a private citizen 

does, they just got to wait until they sell their home. If it is 60 days 

or if it is 160 days. They have got to wait, just like you probably 

do if you sell your house here. So the way I understand it is this 

program they have got is you go out and get your house evaluated 

at $800,000, or whatever it is, you pay this, basically this contractor, 27.5 percent, that is $200,000-something that they got. 

They can discount that house $100,000 and sell it quickly and 

make $125,000 without blinking an eye. I mean, am I correct on 

that? Is that how they do it? 

Ms. HALLIDAY. That could happen, yes. 

Dr. ROE. We need to look at that because—— 

Ms. HALLIDAY. That is a GSA contract. 

Dr. ROE. Yes. I think the one expense in this that I saw that 

looked pretty reasonable was the poor guy that sent his people 

down and moved all the furniture. I think that is a fairly reasonable $16,000 to pack up a big home like that and move it, I think 

was reasonable. These other things look to me, many of them, look 

to be over the top. And I simply say that because of the people that 

I go back home and see every single week when I go home. And 

veterans that cannot get in to the Phoenix VA right now or get the 

care they need, and they see this. I think this is very telling to me. 

Anything else in the report that we have not talked about? I 

think we have pretty well seen what it is, is it looks like that this 

position was a position that Ms. Rubens wanted to go to and essentially worked her way around in the system, knew how the system 

worked, and was able to obtain that system. Am I correct in that? 


VACREP0180 with DISTILLER
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Ms. HALLIDAY. That is our general conclusion. 

Dr. ROE. Is the conclusion. That is what I thought. Mr. Chairman, I yield back. 

Ms. HALLIDAY. Thank you, doctor. Ms. Brownley, you are recognized for five minutes. 

Ms. BROWNLEY. Thank you, Mr. Chairman. And thank you, Ms. 

Halliday, for your report this morning. According to table seven on 

page 30 of your report, the incoming Los Angeles Regional Office 

Director received a relocation incentive of $20,000. As I understand 

it, relocation incentives are only supposed to be paid in cases where 

qualified applicants cannot be found or the position is hard to fill. 

However, and your report states that 168 applicants, five of whom 

were considered best qualified, had applied for the Los Angeles position. So according to the VBA policy should a relocation incentive 

have been offered in this case? 

Ms. HALLIDAY. Since there was not a final conclusion to whether 

those five individuals that were considered best qualified could actually fit there, I would have to say, agree with you that that relocation should not have been paid. 

Ms. BROWNLEY. Thank you. And then one other question is when 

an SES employee is offered a reassignment, what are their rights 

to refuse that reassignment? And what is the process to discuss the 

reassignment with the VBA leadership? 

Ms. HALLIDAY. Generally the position should be advertised. The 

individual should apply and be considered in the pool of competitive candidates. There are occasions when there is a discussion that 

someone would like to go to another spot and knows that it is open. 

I think at that point you can have a discussion, you can identify 

your interests. But if you have a specific interest, we in the IG if 

someone raises that we do not pay moving expenses. We do not pay 

the expenses associated to, you know, for the travel there. We say, 

okay, you can go to that position but that is at your choice. That 

is not at the government need. I think once the government need 

comes in, and in this case what happens, and I am not sure if I 

am going to give you all the detail on this and I will add anything 

for the written record. But it is called a management directed 

move. I do not want to go the position but then you have to go. 

When you do a management directed move the government then 

agrees to pay the expenses. 

Ms. BROWNLEY. So there are, I mean, in some sense if that was 

that strategy or protocol is implemented then there are no rights 

of the employee to refuse a reassignment? 

Ms. HALLIDAY. In a management directed move, once they pay, 

a person really feels that they are at risk of losing their job if they 

do not accept it. That is almost the last thing you can do. 

Ms. BROWNLEY. Thank you. I yield back. 

The CHAIRMAN. Is it safe to assume that one of the easiest ways 

to be fired at the VA is to refuse to move with a management directed move? You do not have to answer. Thank you. 

Ms. HALLIDAY. Thank you. 

The CHAIRMAN. Dr. Benishek, you are recognized for five minutes. 

Mr. BENISHEK. Thank you, Mr. Chairman. Thank you, Ms. 

Halliday, for being here today. Can you elaborate? Is there any role 


VACREP0180 with DISTILLER
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that Ms. Hickey had in any of this that you are aware of? Was she, 

was there communication between her and Ms. Rubens? 

Ms. HALLIDAY. I believe there was communications between Ms. 

Rubens and Ms. Hickey when Ms. Rubens said I am interested in 

the position. And General Hickey had said that she will do anything she can to help that, you know, make that happen. Like it 

is noted in the report there. The other role that was played is as 

the approvals for the transfer in position go up, she has to sign 

that, it then moves on to the VA Chief of Staff. So there is a documentation trail on the approval and the approval of the AVOs, 

things like that. 

Mr. BENISHEK. I think you recommended that the Secretary try 

to recoup the $300,000 that was given to Ms. Rubens. Could you 

elaborate on that recommendation a bit more? 

Ms. HALLIDAY. That is recommendation number nine. And what 

we did was it was the OIG’s position, because there was, we believed there was manipulation to get that vacancy open so that individual could take that spot, that the government had lost 

$274,000 because it paid that amount. General Counsel will have 

to go in and weigh the logistics, VA General Counsel, as to how 

much of that is recoverable. That decision, I do not know what is 

going to happen yet. 

Mr. BENISHEK. Recoverable? What does that mean? I mean 

is—— 

Ms. HALLIDAY. That someone would have to pay that back. 

Mr. BENISHEK. Right. But I mean if that is truly the case, that 

this position was not a management mandated, should not all of it 

be recoverable? 

Ms. HALLIDAY. That is why we put the $274,000 in there. But it 

is clearly going to be out of our hands at this point. 

Mr. BENISHEK. Right. Right. No, I understand. I understand. Can 

you tell me a little bit more about as I understand it the VA has 

their own home loan program that sells thousands of homes a year 

for less than this 27.5 percent service fee. Are you familiar with 

any of that? Or—— 

Ms. HALLIDAY. Are you talking the ones for veterans? 

Mr. BENISHEK. Yes. Is that—— 

Ms. HALLIDAY. That is clearly different than this is. 

Mr. BENISHEK. That is different. Okay. 

Ms. HALLIDAY. This is what the federal government has put in 

place to move senior executives around to fill key vacancies. 

Mr. BENISHEK. All right. 

Ms. HALLIDAY. So I could not mix the two. One is an entitlement 

program and this is administrative. 

Mr. BENISHEK. But this Brookfield, that is a contract with the 

General Services Administration? That is a general government 

wide type? 

Ms. HALLIDAY. Yes. My understanding it is on the federal supply 

schedule. It is a contract that is awarded by GSA and then used 

by the federal agencies that participate in the program. 

Mr. BENISHEK. Do you happen to know how many transactions 

occur, either within the VA or the government as a whole that use 

this service a year? 


VACREP0180 with DISTILLER
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Ms. HALLIDAY. I do not have that information. That would probably be vested in GSA. 

Mr. BENISHEK. All right. I think that is all I have for you now. 

Thank you, Mr. Chairman. I will yield back the remainder of my 

time. 

The CHAIRMAN. Ms. Titus, you are recognized for five minutes. 

Ms. TITUS. Thank you, Mr. Chairman. Ms. Halliday, thank you. 

My understanding about the report is that it is limited to SES employees but it includes a few GS employees who, 15 who were moving up. And this is damning enough. But I am concerned that this 

practice of moving people into jobs with less responsibility but the 

same amount of money is occurring at other levels as well. And I 

will just give you an example. 

Ed Russell, who was previously the Director of the Reno Regional 

Office for VBA, which was one of the worst in the country, was put 

on paid leave. He stayed on that administrative leave for almost 

a year. Then they could not, or would not, get rid of him, so a 

brand new position was created in Washington. They called him a 

senior advisor in the Office of Field Operations, but he teleworked 

from Reno. He did not even move back to Washington. Now I cannot find out for sure what his salary was, but I doubt if it went 

down. Now the responsibility that he had as senior advisor while 

teleworking from Reno had to have been less than being the Director of the Regional Office. So I am concerned that as VA pushes 

this initiative called My VA if it is full of just patronage and cronyism, that is totally contrary to the image that it is trying to create and its efforts to restore faith in VA. And I wonder if you have 

any sense that this is more widespread than just the Reno office? 

Or if you would be willing to look into it if that would be appropriate or even possible? 

Ms. HALLIDAY. I do not have any evidence as to whether it is 

widespread. The view focused on these, the VBA moves. With a 

congressional request we would look into it. 

Ms. TITUS. And would that, it would be something that you could 

do, though, right? 

Ms. HALLIDAY. We could. 

Ms. TITUS. If we requested it? Thank you very much. I yield 

back. 

The CHAIRMAN. Ms. Walorski, you are recognized for five minutes. 

Ms. WALORSKI. Thank you, Mr. Chairman. And thank you, Ms. 

Halliday, for being here yet again. 

I guess I am, I would call this report, this IG report a crisis in 

confidence again with the VA and with some of these senior level 

executives. And I guess I echo back to what Representative Roe 

said. The discrepancy that is happening in this country between 

these high level VA executives and the veterans that are in the districts that we all sit in here and represent today, to me it is reprehensible. And we are looking at yet another crisis in confidence. 

I have been here, I am only in my third year. I am one of the 

youngest members on this panel. You have been here since I have 

been here. When you look at yet another, yet another one of these 

examples of egregious spending, benefits that people in the private 

sector do not even have, people in my district cannot even relate 


VACREP0180 with DISTILLER
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to these issues of paying people to move, at the exorbitant amount 

of money. Do you look at this at any point, as the Inspector General, and say there is an issue with confidence here with these senior executives? 

And I guess to my other colleagues’ point, you know whether this 

is nationwide or not, I would have to suspect based on just the data 

that we have seen in the three years we have been here, this is 

just the same old, same old, status quo behavior. There has not 

been a whole lot of shake down when it comes to what kind of federal benefits are given to these senior executives in the VA. Do you 

see a confidence issue here as you look at these, at the tangible 

data that you have? 

Ms. HALLIDAY. I think every time the IG identifies a situation 

where they question the cost, the necessity of those costs, or the 

validity of those costs, it erodes the trust of veterans. 

Ms. WALORSKI. I agree. And I can tell you that my office number 

still rings every single day in Indiana’s Second District with veterans that need help. They need our help in mitigating a system 

and bringing down the mountains of bureaucracy just so they can 

access the basic services that they were promised by this government when they signed up to go fight for freedom. And I think that 

it is just another egregious example that I look at this as a huge 

crisis in confidence yet again. That we feel like we have taken a 

couple of steps forward and we go backward when we look at egregious spending. And that is where the Americans do disconnect. 

That is where our veterans simply cannot trust this government. 

And I think that it is an atrocity that as we continue to dig deep, 

further in the weeds on this issue that we have got to hold additional people accountable and make sure that the actions of the 

senior executives of the VA are absolutely transparent to the American public. And so we have a long road ahead and I yield back my 

time, Mr. Chairman, thank you. 

The CHAIRMAN. Thank you very much. Mr. Walz, you are recognized for five minutes. 

Mr. WALZ. Thank you, Mr. Chairman. Commander Barnett, I 

would like to thank you for being here and let you know your team 

here in Washington is doing a fabulous job. And we certainly appreciate it. And my 2016 dues are on the way, so that email you 

sent. So you do a good job of reminding me, so we will get them. 

But Ms. Halliday, nice to see you again as always. And I appreciate your time. And I want to thank the chairman and the ranking 

member for I think once again elevating this committee above the 

partisan politics, for bringing it to the point of trying to improve 

the care for veterans. 

I also think it is noted that together we are doing what we are 

supposed to do. Reports are being done. We are doing our oversight. Changes are being made. An Under Secretary is no longer 

an Under Secretary. And I certainly cannot say if it was in direct 

result of this, but I think people can draw their conclusions. I also 

would say that Deputy Secretary Gibson’s willingness to come here 

at every case, and his volunteering to come here, and I think the 

chairman was very clear and sufficiently stated why that was probably not the right case here because he has got a job to do. And 

I am grateful that I think my colleagues here have both, did the 


VACREP0180 with DISTILLER
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accountability piece, the subpoenas were correct, we have created 

space, we let Deputy Secretary Gibson do his work, and we will 

have some answers by November 2nd. 

So I kind of want to, this is taking care of it. There are some 

good questions being brought up. The ranking member brought up 

a great point about across the board on this issue, which I think 

is very important to look at. I want to ask more specifically about 

the role of the IG and this committee stepping up to do its oversight responsibility. 

I do think it should be noted we are approaching 700 days without someone in the top job at the VA Inspector General. That in 

itself is inexplicable to me. With that being said, the broader issue 

of the IG, the IG’s role and this committee’s role of getting aggressive to do what we are doing today, and I am proud of that, I want 

to ask a couple of specifics on this. How many investigations has 

your office conducted on personnel issues at VBA? That is an off 

the—to get back to us? Or—— 

Ms. HALLIDAY. I would have to get back to you on the record on 

that. 

Mr. WALZ. Would you know in a general trend has it increased 

or decreased? Again maybe—— 

Ms. HALLIDAY. I think my division for my administrative investigations is inundated with work. 

Mr. WALZ. Okay. Because I think this is an important one for us 

and I would ask my colleagues on this. I have been an unabashed 

supporter of the VA and the role, and you and I talked about some 

of these where it goes back to the VISN to do some of them because 

you have to triage those. 

Ms. HALLIDAY. Right. 

Mr. WALZ. You had I think some very strong vision, the next Inspector General that comes in, that you work with them. I kind of 

want to know, for you to help me understand this, how does it 

work when you complete a report? Because I think the public is 

starting to see, and one of the questions we are asking, is what do 

we do with this and how do we implement change? So what happens when you send a report over to the VA? 

Ms. HALLIDAY. Okay. That is a good question. I will send the report over to the VA. The recommendations in this particular report 

were directed to the Deputy Secretary because everyone else in the 

chain of command was involved at some level of the decision making and the actions that occurred. The department gets a specific 

period of time to review the recommendations. 

Mr. WALZ. Who reviews that? 

Ms. HALLIDAY. Well that would be the choice, I sent it to the 

Deputy Secretary. He could task whoever he wants to review the 

details of the report. You know, he might have General Counsel involved—— 

Mr. WALZ. Does the evidence file go with it? 

Ms. HALLIDAY. We do send evidence over. We did. We sent the 

evidence over and I know General Counsel and the Office of Accountability Review were involved in looking at the evidence. 

Mr. WALZ. And you and I talked about then and on that is that 

how you go about committing to implementing your recommendations. That is kind of our role, is that correct? Is that what you see? 


VACREP0180 with DISTILLER
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I see this as where the disconnect is. You do the investigation, you 

put it out. You send it over to people. People in charge look at it. 

They can either implement or not implement. This is where I think 

the disconnect is. This is where I think it is where we step in and 

there is, people who are proposing another board between us and 

them, that came up at a hearing we had here recently, kind of a 

new oversight board especially dealing with health. Is it your interpretation of how this is supposed to work? This is where we are 

supposed to step in and make sure the implementation is happening? 

Ms. HALLIDAY. I think that you are in the best position to make 

sure people are held accountable to implement those recommendations. Our internal operations has a follow up review. We track the 

actions to determine how long a recommendation is going to stay 

open, and is the department taking responsible actions to actually 

correct the problem. But in cases where you want quick action, yes, 

I think that is the role of the congressional committee. 

Mr. WALZ. I agree. And I think in this case, I think we have got 

the right people. I think Deputy Secretary Gibson, yourself, this 

committee see ourselves as partners on fixing this. But at the end 

of the day I have been saying, and I think the committee has executed that, it is our responsibility by virtue of the public vote and 

confidence and statutorily in this office for us to do that. So I would 

argue today is what you are seeing especially on this specific case, 

the system is working as it is supposed to with vigorous push by 

us when we are in agreement. So I thank you, Mr. Chairman. I 

yield back. 

The CHAIRMAN. Thank you very much, Mr. Walz. Mr. Coffman, 

you are recognized for five minutes. 

Mr. COFFMAN. Thank you, Mr. Chairman. I certainly welcome 

the Commander of the American Legion here today. Unlike Mr. 

Walz, my dues are paid up. 

I want to go over these relocation expenses just for a minute here. They totaled $274,019.12 for a Deputy Under Secretary of 

Field Operations to move from Washington, DC., to the Philadelphia area. And here is my issue with that. When I look at the relocation expenses that we pay our military, that the Department of 

Veterans Affairs is there to support and serve, that the highest one 

can receive I think is around $4,000. If we look at the pay scale 

for an O–10, which is a four-star flag officer, that individual would 

receive a relocation allowance of $4,514.29 and that is with dependents, an O–10 with dependents, that is four-star. I retired from the 

Marine Corps as a major. And so that would be the Commandant 

of the Marine Corps would receive that $4,514.29. They would receive mileage and they would obviously have their household goods 

moved, 14,000 pounds, the government would pay for that expense. 

I mean, that is incredible. How did this get so out of control, Ms. 

Halliday? 

Ms. HALLIDAY. That is a pretty broad question. 

Mr. COFFMAN. Yes. 

Ms. HALLIDAY. Without being able to lay the services that are 

supported through a military move against the private sector and 

against the VA, I cannot really answer that. I would think that the 

contracts are set up. We saw that the percentages paid were the 


VACREP0180 with DISTILLER
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percentages per the contracts. It is possible, I think you should 

pursue GSA—— 

Mr. COFFMAN. Sure. 

Ms. HALLIDAY [continuing]. And is there another option available 

that still would not inhibit senior executives moving from one position to another. 

Mr. COFFMAN. See, for our military personnel there is no compensation in terms of if you lose money on the sale of your home, 

there is no compensation for that. Yet for VA executives when the 

move is directed there is compensation for that. And what we can 

see is that in compensation, this level of compensation is so high 

that it incentivizes this culture of corruption where we have an example of a senior executive who is indented to move and forces 

somebody else out of their position just to move to get the compensation. And I just think that that is extraordinary. 

And I, you know, what is so upsetting about this I think is the 

fact that you do not have leadership at the top of the Veterans Administration that seems to be concerned about reforming this process. That it is always the whistleblower that comes up with this, 

or you as the Inspector General’s Office, from the Inspector General’s Office, that comes up with these issues. And that the VA is 

so slow to respond. And we had testimony today of individuals that 

were involved in the appointment wait time scandal that are still 

with, that were at the top of the scandal, that were complicit in the 

scandal by all observations, that are still on paid administrative 

leave and this issue happened last year. 

Can you, I know that right now you are focused on this issue. 

But what is the VA’s policy on SES personnel that seem to be 

placed indefinitely on paid administrative leave? 

Ms. HALLIDAY. I cannot answer that. I am sorry. 

Mr. COFFMAN. I just think that that is extraordinary. Well, I 

think, I commend you on your work. I certainly hope, I think that 

clearly the fact is that this was manipulated by virtue of forcing 

people out of their positions, not advertising the positions as open 

as they should have on a competitive basis, and then moving simply to get this extraordinary compensation that is so excessive. 

That clearly I think there is criminal wrongdoing in this and I hope 

it is pursued by the Justice Department. And with that, Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you very much. Mr. Costello, you are recognized for five minutes. 

Mr. COSTELLO. Thank you, Mr. Chairman. At the outset I would 

like to pick up on the comments that my colleagues Mr. Coffman 

and Ms. Titus made relating to some of the gaming of compensation within the VA. It almost seems like friends are rewarding 

friends rather than focusing on reforming the VA. And so I would 

just reiterate that I think that we really need to get to the bottom 

of how pervasive that may be in the VA. But that is something obviously I am sure all of us as members will discuss a little bit 

more. 

I also want to commend you for your continued work in providing 

accountability and shining a light on the abuses there. Typically 

this committee will have witnesses before them that we can ask 

questions who either were culpable or who can actually speak to 


VACREP0180 with DISTILLER
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how they are either reforming the challenges or what mistakes 

were made along the way. But today we do not have that, we just 

have you. So I do not, I am sure it is a little bit odd that you are 

here delivering bad news, we are as outraged as anyone, but we 

do not have anyone really to direct that outrage to. 

Let me start with a couple of really fact specific questions just 

for the record. First, with respect to Philadelphia and Ms. Rubens, 

as well as Ms. Graves and St. Paul, any evidence that family considerations were part of the reason why they wanted to relocate to 

those facilities? 

Ms. HALLIDAY. You would have to ask them. 

Mr. COSTELLO. All right. I just know that in the past I believe 

there was some testimony by Ms. Rubens indicating that family 

was nearby, but there was nothing, you were not able to unravel 

anything more to that? 

Ms. HALLIDAY. No. 

Mr. COSTELLO. Okay. During your review of Ms. Rubens’ move 

to Philadelphia, were you able to determine when she placed the 

deposit on the construction of her new home in Philadelphia? And 

the reason I am asking that question is because I would like to 

know whether that was before or after her reassignment took 

place. 

Ms. HALLIDAY. I will take that for the record. I am not sure if 

I have it or not. 

Mr. COSTELLO. Okay. Next, and this is as much about me making sure that I describe this accurately when I leave this room as 

anything, you had testified essentially that the VBA basically had 

a process to circumvent the pay freeze and bonus freeze mechanisms that were in place, is that correct? 

Ms. HALLIDAY. The practice they were using did exactly that. 

Mr. COSTELLO. So it is fair to say that I believe the reason why 

we had pay freezes and no more bonuses was sort of the VA’s attempt to say we are going to take responsibility here, the wrongdoing that has been uncovered we are going to get to the bottom 

to and we are not going to, in the process we are not going to receive bonuses or increased pay, and yet they basically just did it, 

right? They just did it anyway? 

Moving forward, you had said at this point in time you do not 

have recommendations on how to prevent that from happening 

moving forward. At some point in time will you issue recommendations to that effect? Or is this really just people doing the wrong 

thing and you can put all the rules in place, and if they are going 

to do what they are going to do and violate the rules, they are 

going to violate the rules? 

Ms. HALLIDAY. Being in my occupation, you can always circumvent the controls if you want to. I hope to say this is the exception and not across the board. But the two we looked at we had 

problems. 

Mr. COSTELLO. Okay. In your position, looking at the rules, not 

looking at these specific facts, but just looking at those rules, do 

they make sense? Would you look at them and say this is sufficient, there are sufficient enforcement mechanisms here to make 

sure that people do not get pay increases, people do not get bonuses? Or do they really have to go further? Because—— 


VACREP0180 with DISTILLER
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Ms. HALLIDAY. I think if people act with integrity, generally the 

rules were strong enough. But you are always going to have some 

that do not. 

Mr. COSTELLO. That is a brilliant point. Because I asked myself, 

how many rules can we put in place? And if people are acting with 

integrity we may not have to put that many more rules back in 

place. But if they are not acting with integrity we are going to put 

all the rules in the world in there and it still will not matter. And 

that is the frustrating thing. 

And I will just add I am not going to get into the IG report on 

what is happening in Philly. But it really bothers me to hear that 

we have apparently made some progress in implementing some of 

the reforms at the Philadelphia VARO but the person who was 

there spearheading that has done what she has done. And so the 

veracity of which just further calls into question the credibility of 

the reforms that have been made. And it really is, I am flabbergasted by this report. Absolutely stunned. But I commend you 

for your ongoing work on behalf of the VA. 

Ms. HALLIDAY. Thank you. 

Mr. COSTELLO. Thank you. I yield back. 

The CHAIRMAN. Thank you very much, Mr. Costello. I would 

draw members’ attention to page 18 of the report, where Ms. 

Rubens said that she grew up in Delaware and that the Philadelphia RO was close to home. She also testified in this committee 

that her mother was just a few miles down the road. And Ms. 

Graves, on page 22 it states that she stated that the move to St. 

Paul got her closer to her mother. So that answers those questions. 

Ms. Brown, do you have any closing comments? 

Ms. BROWN. No, sir. I think that we are going to move forward 

in looking at the entire program through General Services and 

making sure that VA employees are not penalized. But if the program is not working overall then we need to look at it. Because we 

have 13 agencies that use this program. And perhaps we are bringing something to the attention that everybody needs to double 

down on and take a look at. So thank you very much, and thank 

you, Mr. Chairman, for having this hearing. 

The CHAIRMAN. Thank you very much. And Ms. Halliday, thank 

you for appearing before this committee. There are no further questions so you are excused. 

And I just want to summarize for the members this morning that 

the committee has voted to issue a subpoena to the five VA employees that we requested to appear before us today. They will now be 

required to testify at a hearing on November 2nd at 7:30 p.m. and 

be prepared to respond to questions. As a reminder, I will also be 

requesting the presence of former Under Secretary for Benefits Allison Hickey at the hearing to testify in her role as a private citizen. I would ask unanimous consent that all members would have 

five legislative days with which to revise and extend their remarks 

and add any extraneous material. And, without objection, so ordered. And now this hearing is adjourned. Thank you. 

[Whereupon, at 11:41 a.m., the committee was adjourned.] 


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