VA Secretary Asked to Resign by Former Navy SEAL Lawmaker in Wake of Executive Bonus Scandal

A lawmaker for the first time on Tuesday called for Veterans Affairs Secretary Denis McDonough to resign over bonuses erroneously paid to senior VA executives under a law passed to provide incentive pay to retain employees in jobs with critical shortages.

Rep. Derrick Van Orden, R-Wis., called on McDonough to resign during a House Veterans Affairs Committee hearing. Other lawmakers previously have called for the heads of the Veterans Benefits Administration and Veterans Health Administration to resign or be fired, but they have stopped short of asking McDonough to step down.

The VA Office of Inspector General published a report last month that found the VA authorized bonuses worth $10.8 million to 182 senior headquarters executives under the PACT Act, the law that expanded health care and benefits to millions of veterans who served overseas.

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The inspector general investigation, instigated at McDonough's request after the secretary learned the extent of the bonuses, found that the VA under secretaries for health and benefits approved the payments, known as critical skill incentives, or CSIs, despite concerns from human resources personnel and financial staff.

The investigation found that the VA under secretary for health, Dr. Shereef Elnahal, kept McDonough apprised of the bonuses paid to medical center directors and the heads of VA medical regions but did not inform him of the executive bonuses at the central office in Washington, D.C.

In a subsequent report released last Thursday, Inspector General Michael Missal raised concerns that Elnahal may not have had the authority to award bonuses to certain senior executives who work directly for him.

Van Orden, a former Navy SEAL, said during the hearing that he has been in communication with Elnahal in the past several days and drafted a resignation letter for Elnahal to McDonough.

During the hearing however, Van Orden said McDonough should sign it and send it to his boss, President Joe Biden.

It "breaks my heart," Van Orden said, to call for McDonough's resignation. He noted that the two speak regularly and McDonough supported his family following the death of his daughter.

"I'm going to give you the opportunity to do what you just asked to do -- to be held accountable. ... This is a systemic problem. I do not think you are capable of serving in this capacity any longer," Van Orden said.

On May 21, a dozen Republican senators, including four members of the Senate Veterans Affairs Committee, called for the immediate firings of Elnahal, Under Secretary for Benefits Joshua Jacobs and Deputy Secretary Tanya Bradsher.

No Democrats have called for dismissals, but Sen. Jon Tester, D-Mont., chairman of the Senate Veterans Affairs Committee, joined committee Democrats and Republicans on May 30 calling for accountability and personal actions to restore public trust.

"The use of this important authority to instead increase the salaries of executives in [VA Central Office] is unethical, a violation of VA policy, and in direct opposition to the intent of Congress," wrote the senators in a letter to McDonough.

The House Veterans Affairs Committee asked Elnahal and Jacobs to testify during the hearing, but McDonough took responsibility, saying he would speak for the department and lay out the steps the VA is taking to address the issue.

According to McDonough, of the $9.7 million the VA distributed to senior executives, it has recouped $9.1 million. Collections for the remainder are on hold following hearings requested by those who received the bonuses.

He added that the VA has paid out $340 million in incentives to employees in positions of greatest need, including housekeepers, food service workers, VA police and human resources specialists, and "retention rates are at the highest they've been."

"VA has used CSI payments as an important tool to help attract employees who possess high-demand and shortage skills that serve a critical need," McDonough said in his written testimony. "We made serious mistakes in the way we implemented and executed the PACT Act's CSI authority for ... senior executives. ... Moving forward, we will continue to work to ensure that everyone who receives a CSI meets the criteria to do so."

McDonough said he continues to have faith in his leadership team but acknowledged that the VA Office of Accountability and Whistleblower Protection and ethics experts are reviewing the process and may make recommendations regarding any future steps or disciplinary actions.

"There's an established process there," McDonough said.

When asked after the hearing about Van Orden's call for his resignation, McDonough looked dejected.

"These are issues everyone feels strongly about," McDonough said. "I appreciate the candid conversation."

Related: Senators Demand Recoupment of $10.8 Million, Dismissal of VA Officials Who Authorized Executive Bonuses