VA officials Diana Rubens of Philadelphia, left, and Kimberly Graves of St. Paul, Minn., at a House Veterans Affairs Committee hearing in Washington, Nov. 2, 2015.

VA officials Diana Rubens of Philadelphia, left, and Kimberly Graves of St. Paul, Minn., at a House Veterans Affairs Committee hearing in Washington, Nov. 2, 2015. (Joe Gromelski/Stars and Stripes)

WASHINGTON -- The Department of Veterans Affairs will not try to recoup more than $400,000 from two senior VA executives who manipulated the hiring system to get their jobs of choice and received hundreds of thousands in extra money to relocate.

The agency has remained silent on questions about its decision to demote and transfer but not fire executives Diana Rubens and Kimberly Graves, and whether it would collect repayment of those relocation benefits. The original statement from the VA announcing the decision said the women had the right to appeal their reassignments.

But Rep. Jeff Miller, R-Fla., who chairs the House Veterans Affairs Committee, said the VA’s top lawyer has determined that the agency does not have the legal authority to recoup the money, even after acknowledging that the women had abused their offices.

“I am flabbergasted,” Miller said in a letter to VA Secretary Bob McDonald, released Tuesday. “How can it be that the law prohibits recouping benefits paid to, or on behalf of, employees who only received those benefits because they abused their positions of authority? To put it mildly, VA’s decision defies common sense.”

On Sept. 28, 2015, the VA Inspector General’s office issued a report finding that Rubens and Graves had “inappropriately used their positions of authority for personal and financial benefit” by arranging the transfer of subordinates whose jobs they wanted and then volunteering to fill the vacancies.

Rubens became director of Veterans Benefits Administration’s Philadelphia and Wilmington VA regional offices and received $274,019.12 for relocation expenses under a program that was meant to offer incentives for hard-to-fill posts. Graves became director of the VBA’s St. Paul, Minn., regional office, with relocation pay of $129,467.56. The relocation incentives program has since been indefinitely put on hold.

Both women maintained their senior executive salaries after transferring to these less-demanding jobs. Their predecessors also received relocation costs totaling $60,000, the report found. Rubens received an $8,000 bonus last year, which she was not asked to repay.

The report recommended that the VA deputy secretary consult with the VA’s Office of General Counsel to determine whether Rubens and Graves should have to repay their relocation expenses.

Asked about the information in Miller’s letter, VA spokesman James Hutton responded by email, saying only, “I have nothing new for you on this.”

When asked about the determination by the Office of General Counsel and whether criminal charges would be referred against Rubens and Graves, the Office of Inspector General said, “We do not have information that is responsive to your questions,” and deferred questions of possible prosecution to the U.S. Attorney’s Office. Neither that office nor the Department of Justice immediately responded to a query on the issue.

McDonald’s press secretary did not respond to calls and emails. A call to McDonald’s personal cell phone went to voicemail, and no one responded.

Miller said he learned of the general counsel’s determination from McDonald’s staff. He called on the VA secretary to reconsider the agency’s legal position and to present to his committee a “reasoned, legal basis for not pursuing recoupment of these taxpayer funds.”

“I am appalled by the lack of seriousness with which the VA handled the matter,” he added in the letter, noting that the VA aggressively pursues overpayment of benefits made to veterans, survivors and other beneficiaries. “I am sure you appreciate the lunacy of a policy that is stricter on veteran beneficiaries of earned benefits as compared to corrupt government employees who unjustly enrich themselves at the taxpayer expense.”

In a separate letter to the VA secretary dated Monday, Sen. Thomas Carper, D-Del., questioned what safeguards the VA has in place to prevent this kind of manipulation of the hiring process and to identify, prevent and recoup fraudulent relocation overpayments.

“We need to remain vigilant,” he wrote.

“This move is an insult to veterans and taxpayers, who are left footing the bill,” Sen. Johnny Isakson, R-Ga., who chairs the Senate Committee on Veterans Affairs, said in a statement Tuesday.

Curtis Kalin, spokesman for the nonprofit Citizens Against Government Waste, said the VA’s systemic problems “not only hurt taxpayers, but cost some veterans their lives.”

“These latest findings by the IG are worrisome and again reveal the breadth and depth of the department’s mismanagement,” Kalin said. “Reform of the VA is needed now more than ever.”

Rubens was reassigned to the Houston Regional Benefits Office and Graves was reassigned to Phoenix. Both will now serve as assistant directors, the VA said. The agency said the women are entitled to seek relocations costs for these new assignments that stemmed from their demotions.

Email: Twitter: @diannacahn

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