St. Paul VA official received an $8,697 bonus in year she was under investigation

WASHINGTON – Kimberly Graves, the top St. Paul Department of Veterans Affairs official who recently refused to answer questions in front of a congressional panel, received an $8,697 bonus in 2014 — the same year she was under federal investigation for allegedly abusing her authority for personal gain.

Graves' bonus came after she received almost $130,000 in moving expenses to relocate from the East Coast to St. Paul last year — a move she orchestrated, according to a VA inspector general's report.. The report found that Graves also retained her $173,949 annual salary even though her job responsibilities were significantly diminished in the move to Minnesota.

Democratic Sen. Al Franken said Thursday that he isn't against VA officials receiving bonuses, but they should be reviewed. "Obviously this is a recruitment device. If you look at what people get paid outside in private hospitals and health care, this is to try and reward and retain and recruit good people," Franken said. "So I think we should look at some of these bonuses and if some of them weren't warranted, they should recoup them."

Graves wasn't the only controversial Minnesota veterans official to receive a 2014 bonus. The VA also gave St. Cloud chief of staff Susan Markstrom a $3,900 bonus. An internal investigation released in 2014 concluded that Markstrom's mismanagement led to mass resignations of doctors and other health care providers at the facility.

She was among the 1,047 St. Cloud VA employees who received incentives of various types, totaling $816,161. That amount is far less than 1 percent of the total St. Cloud VA budget of $251 million last year. Bonuses ranged from $100 to a maximum of $5,000, and the average award was $779.52.

"Dr. Markstrom's ongoing contributions to patient care and clinical quality are significant and deserving of recognition," said Barry Venable, a spokesman for the St. Cloud VA Health Care System. "St. Cloud's clinical quality monitors remain high — among the top 20 percent of all VA facilities for several years running. Our veterans report high levels of satisfaction, and increasing numbers of veterans continue to enroll for care."

The news of the bonuses was released earlier this week by the House Committee on Veterans' Affairs, a Republican-led panel that continues to probe the federal agency for inefficiencies. The bonuses were first reported by USA Today.

The committee concluded that the VA doled out more than $142 million in bonuses to executives and employees in 2014. Among the various types of bonuses are those for government service employees — like Markstrom — who receive rewards based on ratings, usually in a lump sum. Senior executive performance rewards, like those given to Graves, are usually for the previous year's work. Those bonuses are approved by officials in Washington, D.C.

The chairman of the House VA committee, Rep. Jeff Miller, R-Fla., called it disturbing that the department continues to reward "failure."

"Until VA leaders learn this important lesson and make a commitment to supporting real accountability at the department, efforts to reform the VA are doomed to fail," he said in a statement.

Rep. Tim Walz, D-Minn., also a member of the VA committee, was out of the country Thursday. Walz' spokeswoman, Sara Severs, said the bonuses showed the need for greater scrutiny at the department. "There is no question we need greater transparency, accountability and a culture shift at the VA," Severs said. "This is one more example of why."

Graves, along with a handful of other top officials across the country, are under investigation for misuse of the VA's relocation programs and the incentives that go along with moving to another city to work for the department. After the VA's Inspector General released results of an administrative investigation in late September, the VA discontinued part of the incentive program that Graves used in relocating to Minnesota.

Graves' case is under review for potential charges with the U.S. attorney's office in Washington, officials there confirmed Thursday.

Members of the VA committee subpoenaed Graves and some of her contemporaries to testify in October about the Inspector General report. Graves invoked her Fifth Amendment right, which protects a person from making any self-incriminating statements.

Allison Sherry • 202-383-6120