Diana Rubens, former director of the Veterans Benefits Administration’s Philadelphia office, is one of the officials being demoted.

Diana Rubens, former director of the Veterans Benefits Administration’s Philadelphia office, is one of the officials being demoted. Molly Riley/AP

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MSPB has to issue a decision by Monday on whether to uphold or overturn the demotions of Diana Rubens and Kimberly Graves.

The Merit Systems Protection Board by Monday will issue a decision on whether to uphold or overturn the demotion of two former senior executives at the center of the relocation benefits controversy at the Veterans Affairs Department.

Diana Rubens, former director of the Veterans Benefits Administration’s Philadelphia office, and Kimberly Graves, former director of VBA’s St. Paul, Minn., regional office, were demoted officially on Jan. 6 from the Senior Executive Service to General Schedule jobs, and reassigned to assistant director positions at the VBA’s Houston and Phoenix regional officials, respectively. Those demotions come with pay cuts of more than $50,000 each: Rubens’ annual salary decreased from $181,497 to $123,775; Graves’ annual salary fell from $176,558 to $122,932. They appealed that decision to MSPB earlier this month.

In September, the VA inspector general concluded the two improperly helped create vacancies at their respective offices and volunteered to fill them. The two employees occupying the Philadelphia and St. Paul director jobs at the time were relocated to jobs they did not volunteer for to make room for Rubens and Graves, who were working elsewhere at the time in positions with more responsibility, according to the watchdog. VA paid roughly $274,000 in relocation expenses for Rubens, and about $129,000 for Graves, for a total of more than $400,000.

The two are eligible for some relocation benefits pending their reassignments to Houston and Phoenix, “in accordance with governmentwide statutes and regulations that require federal agencies to pay for the geographic relocation of an employee directed to relocate” the department has said.

Under the 2014 Veterans Access, Choice and Accountability Act, the VA can fire or demote SES employees immediately, with paychecks getting cut off the day of termination. The affected executive has seven days to issue an appeal to MSPB, which in turn has 21 days for an expedited adjudication

The law says that MSPB is the final word in such cases, but it’s possible that Rubens and/or Graves could decide to take the matter further if they aren’t happy with the board’s decision. Sharon Helman, the former career senior executive who ran VA’s Phoenix health care system when the scandal over falsifying wait lists erupted in 2014 is challenging her removal under the 2014 Choice Act in the U.S. Court of Appeals for the Federal Circuit.

The MSPB in December 2014 upheld VA’s decision to fire Helman because she improperly accepted more than $13,000 in gifts from a lobbyist and failed to report them -- not because she engaged in misconduct related to manipulating data to conceal excessive wait times for vets seeking health care. The board said the VA failed to adequately prove its case in the latter matter. Helman is arguing that the 2014 Choice Act, the law the VA used to fire her, violated her due process rights.

The outcome of the Helman case, which is awaiting a trial date, could determine how future disciplinary actions against VA senior executives are handled under the 2014 Choice Act.

VA’s decision to demote and not fire Rubens and Graves has added more tension to an already hot debate over firing in the federal government. Many lawmakers of both parties and other observers are frustrated with the department’s inability to quickly shed poor performers or those engaged in misconduct. The 2014 Choice Act makes it easier for the department to fire and demote senior executives, but some believe VA isn’t using the new authority adequately. (Department officials used that authority to demote Rubens and Graves.) Critics of the expedited firing authority say it violates career employees’ due process rights.

VA Deputy Secretary Sloan Gibson has been emphatic about the importance of following due process and evidence in disciplinary actions against employees. During a Dec. 9 hearing before the House Veterans' Affairs Committee, he defended his decision to demote and reassign rather than fire Rubens and Graves. The evidence against the two did not warrant firing, or the IG’s criminal referral to the Justice Department, Gibson argued.

“I’m not going to recommend, I’m not going to propose a disciplinary action that is based upon media coverage, or an opinion that is expressed in the IG report, if it is not supported by the evidence,” he said, adding that he knew his decision not to fire Rubens and Graves wasn’t going to “sit well, with virtually everybody.”