Documents obtained by The Associated Press raise questions of conflicts of interest or appearances of conflicts in connection with the bonuses, some of which went to senior officials involved in crafting a budget that came up $1.3 billion short and jeopardized veterans' health care.
The documents show that 21 of 32 officials who were members of VA performance review boards received more than half a million dollars in payments themselves.
Among them: nearly a dozen senior officials who devised the flawed 2005 budget. Also rewarded was the deputy undersecretary for benefits, who manages a system with severe backlogs of veterans waiting for disability benefits.
Deputy undersecretaries who sit on the review boards, which are appointed by VA Secretary Jim Nicholson, also had input on bonus recommendations involving themselves, fellow members and spouses that made questionable performance claims and neglected agency problems.
The VA, which has defended the bonuses as necessary to retain hardworking senior employees, says board members do not participate in bonus decisions that involve themselves or fellow board members.
In those cases, recommendations are made by agency heads in consultation with deputy undersecretaries, who usually serve as supervisors to their fellow board members, the agency says.
But government watchdogs were harshly critical, saying the process does little to instill public confidence in the fairness of awards. In its last known report on the issue - one involving NASA - the Government Accountability Office in 1980 urged that performance boards add credibility and objectivity to their decisions by including "one or more impartial members from outside the agency," although agencies are not required to do so. With the exception of a panel tasked with reviewing the VA inspector general's office, all the VA's performance board members come from within the agency. In one case, Michael Walcoff, associate deputy undersecretary for field operations who sits on two of the review boards, and his wife, Kimberly, a VA director, received a package of bonuses totaling $42,000. "This is a scandal in the making," said Paul C. Light, professor of public service at New York University who specializes in government reform. He said the VA bonuses pointed to possible "featherbedding" and other favoritism. Light said given the current problems in veterans care, the department would be best served if Nicholson restricted most performance bonuses for at least a year except in cases of clear improvement. "This is not the time for largesse for the Department of Veterans Affairs," Light said. "They must not make a link between retention and employees, but employees and performance as an incentive to solve these very serious problems." Following reports this month by the AP of the $3.8 million in bonuses, groups such as the Veterans of Foreign Wars and the Iraq and Afghanistan Veterans of America have called on Nicholson to explain why officials involved in budget foul-ups would be rewarded. Annual bonuses to senior VA officials last year averaged more than $16,000, the highest average in government. Rep. John Hall, D-N.Y., has introduced legislation that would freeze 2007 VA bonuses for "senior politically appointed officers" - such as assistant secretaries or deputy undersecretaries - until the agency pares its disability claims backlog to under 100,000 cases. The VA says deputy undersecretaries are career employees, and a committee spokeswoman acknowledged that was the case. "It is simply unacceptable that veterans are waiting longer and longer for benefits they desperately need while senior staff members in charge of bad policy are rewarded so-called performance bonuses," Hall said. The legisla