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A pair of senior Veterans Affairs executives at the center of a months-long scandal over the department’s internal promotion system and relocation expenses will keep their regional director jobs, after two failed attempts from VA officials to reassign them elsewhere.

Diana Rubens, Philadelphia Regional Office director, and Kimberly Graves, director of the St. Paul, Minn., regional office, have faced harsh criticism since an inspector general report last fall accused them of pocketing more than $400,000 in moving costs for questionable job moves.

Lawmakers have repeatedly accused the pair of gaming the promotion system for personal gain, at the expense of veterans care. VA leaders have criticized the two only for “judgement errors” in how they handled the job moves, and supported both as reliable and responsible executives.

Still, in December and January, officials moved to discipline and reassign the women to other positions across the country. The Merit Systems Protection Board rejected that attempt, and on Monday VA Deputy Secretary Sloan Gibson in a statement said the pair would be allowed to continue their careers in Minnesota and Pennsylvania.

“Allegations of unethical behavior in the Inspector General report were not supported by any of the evidence I reviewed,” Gibson said. “These errors in judgment took place before [the two] assumed their director positions, and the disciplinary actions do not diminish the confidence VA leadership has in [their] abilities … to manage their offices, lead their employees, and provide benefits to veterans.

“The employees of those offices deserve high performing directors supporting their efforts. I have confidence that the employees of the Philadelphia and St. Paul Regional Offices … will continue their efforts to ensure all veterans receive the benefits they have earned and deserved.”

An inspector general report released in late September charged Rubens and Graves with abusing their authority to reassign other directors to jobs elsewhere within VA, then moving into the vacant positions themselves.

Investigators said the moves carried with them generous relocation payouts. Graves, who makes nearly $174,000 a year, got more than $129,000 to move from Philadelphia to Minnesota. Rubens, who makes $181,000, received more than $288,000 to move from Washington, D.C., to Philadelphia.

But Gibson defended the transfers as legitimate, and he said he has confidence in both women’s leadership skills moving ahead.

“The overwhelming need now is to get back to work, doing the veterans’ business,” he said.

However, Gibson noted that he is still reviewing possible disciplinary actions against the pair and two other senior executives involved in the larger case. He said that would not include reassignments or demotions for Rubens and Graves, but would not specify what that would be or when that would happen.

This is likely to inflame tempers on Capitol Hill, where lawmakers have accused VA leaders of not doing enough to hold department officials accountable for mistakes, missteps and malfeasance.

Department officials and lawmakers are discussing new legislation that could make it easier to discipline and fire VA executives by removing appeals options on such job actions, but that proposal has received strong resistance from groups representing the senior workers.

VA Secretary Bob McDonald is expected to appear before the Senate Veterans’ Affairs Committee on Tuesday morning to discuss the department's fiscal 2017 budget request, and is likely to face questioning about the decisions in the Rubens and Graves cases.

Leo Shane III covers Congress, Veterans Affairs and the White House for Military Times. He can be reached at lshane@militarytimes.com.

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