Veterans Affairs chief resigns

James Nicholson, 69, says he wants to return to the private sector.

The head of the Veterans Affairs Department announced Tuesday that he plans to resign after more than two and a half years in office.

James Nicholson will leave before Oct. 1. According to the VA, Nicholson has said he wants to return to the private sector, but he has no definite plans at this time.

"This coming February, I turn 70 years old, and I feel it is time for me to get back into business, while I still can," Nicholson said.

VA said in a statement that under Nicholson's leadership, the department continued to evolve as a leader in health care innovations, education services and other benefits to veterans.

Rep. Steve Buyer, R-Ind., ranking member of the House Veterans' Affairs Committee, said in a statement that "Nicolson has been a warrior for veterans," but noted that his time at the VA has been marked by great challenges.

In June 2005 VA officials had to go before Congress and explain why the agency had an unanticipated $1.5 billion shortfall in its fiscal 2005 funding. The department attributed the gap to errors in forecasting health care system needs, but Democrats said it was the result of poor planning.

The secretary's tenure was also plagued by two of the largest data breaches in the federal government's history - one in May 2006 involving the theft of a laptop computer containing personal information on 26.5 million veterans and active duty military personnel from an employee's home and the other in January, when a hard drive went missing from a Birmingham, Ala., medical research facility.

In June 2006, former VA information security chief Pedro Cadenas told Government Executive that he had an impossible job and that he was cut out of the department's decision-making process. Cadenas said that during his tenure at the department, he met Nicholson only once at a social event.

Ultimately Nicholson issued orders that centralized control over the department's sprawling information technology infrastructure under the chief information officer.

Nicholson praised and thanked President Bush for the honor of serving him and the country's veterans in such a "critical time in our nation's global war on terror." Nicholson, a Vietnam veteran, was sworn in on Feb. 1, 2005.

Following the revelation of bureaucratic troubles and poor conditions at Walter Reed Army Medical Center, Bush directed Nicholson to lead a Cabinet-member task force to examine the immediate needs at Walter Reed and other facilities.

In a message to employees shown on VA's closed-circuit television system, Nicholson said he was privileged to work with them in fulfilling the nation's promises and obligations to veterans.

"This is a very big government agency that, among many other things, sees over 1 million patients a week in its health care system, and is doing a world class job," Nicholson said. "The American people can feel proud about the way we are treating our veterans. The president and the Congress have been very supportive, and for that I am grateful as well."

Prior to government service, Nicholson spent more than 10 years in business, where he ran a residential development and construction company. He was elected chairman of the Republican National Committee in January 1997, and before taking over at VA, was ambassador to the Vatican.

Sen. Larry Craig, R-Idaho, ranking member of the Senate Veterans' Affairs Committee, said that Nicholson "has done a great job of leading and managing the" VA.

"I am sorry to see him leave but certainly wish him well his new endeavors," Craig said. "Nicholson was willing to rise up and take on those challenges and has worked tirelessly to fulfill VA's mission to 'care for him who shall have borne the battle, his widow, and his orphan.'"

Alma Lee, president of the National Veterans Affairs Council 53 of the American Federation of Government Employees, which represents more than 150,000 VA employees, said in a statement that Nicholson's departure presents an opportunity for the VA to reexamine its framework and look to make "significant changes."

"[I]it is critical that we take this opportunity to accent our strengths and address the system's critical failures of chronic budget shortfalls, inadequate resources [and] staffing shortages," Lee said. "We believe this is an opportunity for significant change."

Rep. Phil Hare, D-Ill., who called for Nicholson to step down in May following the disclosure that a number of bonuses for senior VA employees were approved despite financial challenges at the department, said that the hurdles facing veterans in accessing health care and other services go much deeper than the shortcomings of one person.

"The next secretary will inherit a disability claims backlog of 600,000, staffing shortages at our vet centers, and ongoing challenges at Walter Reed and other medical facilities that care for our wounded soldiers," Hare said. "I strongly urge President Bush to nominate a veterans' veteran -- someone in the mold of former Republican VA Secretary Anthony Principi -- who will put the needs of our fighting men and women above any political ideology."

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