Shinseki Departure Puts Focus on Congress in VA Reform

May 30 (Bloomberg) -- Veterans Affairs Secretary Eric Shinseki resigned from his post after revelations of widespread failings in the health care system for military veterans. Phil Mattingly reports on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

Veterans Affairs Secretary Eric Shinseki’s resignation amid widespread delays in providing health-care for military veterans shifts the focus to Congress and the debate over whether more spending is needed.

Republicans yesterday signaled that they would try to keep pressure on President Barack Obama, indicating that his administration may need to work within the department’s current budget to pay for any changes.

“I am not sure money is the problem,” House Appropriations Chairman Hal Rogers, a Kentucky Republican, said in an interview yesterday in Washington, adding that Congress has “flooded the VA with money” in recent years.

Shinseki resigned after becoming a political liability for Obama. Lawmakers from both parties called for his ouster and said the president bore responsibility for mismanagement of an agency that spends $160 billion annually, including providing medical care to more than 8.3 million veterans.

After accepting Shinseki’s resignation yesterday, Obama said spending on veterans has been a priority “but it still may not be enough.” He said the Veterans Health Administration needed a new information system, and may need more doctors and nurses.

“That’s going to cost some money,” Obama said.

House Speaker John Boehner of Ohio said Shinseki’s resignation “does not absolve the president of his responsibility to step in and make things right.”

“A personnel change cannot be used as an excuse to paper over a systemic problem,” Boehner, a Republican, told reporters in Washington.

Legislative Responses

Lawmakers are considering legislative responses. House Veterans Affairs Committee Chairman Jeff Miller, a Florida Republican, said he’s drafting legislation that would require care be offered outside the VA system to veterans who waited at least 30 days for a medical appointment.

In the Senate, Democrats are considering action next week on a measure that would make it easier to dismiss VA officials for misconduct, said a Democratic leadership aide who asked for anonymity to discuss the plans. A similar proposal passed the House, which has also voted to freeze bonuses for senior VA officials through the 2018 fiscal year.

The president accepted Shinseki’s resignation after the retired Army general delivered an interim review that found systemic mismanagement, treatment delays and falsified records throughout the VHA, the U.S.’s largest health-care network. The internal audit showed scheduling staff were instructed to manipulate appointments at 64 percent of VA facilities.

A Distraction

Shinseki concluded “that he could not carry out the next stages of reform without being a distraction himself,” Obama said at the White House. “And my assessment was that, unfortunately, he was right.”

Obama said VA Deputy Secretary Sloan Gibson will take over on an interim basis. White House Deputy Chief of Staff Rob Nabors will remain on temporary assignment to the VA to assist with the transition and complete his own review, Obama said.

U.S. lawmakers and the leader of a prominent veterans’ group welcomed Shinseki’s decision to quit.

“The denial of care to our veterans is a national disgrace, and it’s fitting that the person who oversees the Department of Veterans Affairs has accepted responsibility for this growing scandal and resigned,” Senate Republican Leader Mitch McConnell of Kentucky said in a statement.

Seeking Replacement

House Minority Leader Nancy Pelosi said Obama should replace Shinseki with “someone who would get confirmed very quickly” and suggested that person come with experience in business.

“Maybe it needs somebody to just come in as part of a management team that says, ’This is how we would do it in the private sector, this is how we manage scheduling and lines and getting people where they need to be for their appointment,’” the California Democrat said in an interview to air this weekend on Bloomberg Television’s “Political Capital with Al Hunt.”

William Thien, national commander of the Veterans of Foreign Wars, said his group supported Shinseki’s resignation.

“The outside calls for his resignation were overshadowing the crisis in health-care issues veterans face,” Thien said in a statement.

While lauding Shinseki’s service in the military and at the VA, Obama said the department wouldn’t be able to fix the system while the secretary was under fire from lawmakers and veterans groups.

Inspector’s Report

The drumbeat of calls for Shinseki’s resignation escalated with the May 28 release of an inspector general’s report that found some VA hospitals kept phony waiting lists to hide health care delays. Richard Griffin, the department’s acting inspector general, said there were repeated instances of altered waiting lists in a review of 42 VA medical facilities.

There was evidence of double bookkeeping -- two sets of lists showing how long veterans had to wait to see a doctor, Griffin’s report said. Some 40 veterans may have died while awaiting care in Phoenix, where the report said as many as 1,700 veterans on a secret waiting list were “at risk of being lost or forgotten.”

The Justice Department, working with investigators at the VA’s inspector general’s office, also is reviewing materials to see whether any crimes were committed, according to a federal law enforcement official familiar with the probe.

Justice Probe

Prosecutors are focusing particular attention on whether VA officials made false statements to their bosses or others to cover up problems related to the care of veterans, said the official, who requested anonymity because the investigation is still under way. The official described the investigation as being in its preliminary stages.

Shinseki, 71, spoke to a veterans group yesterday where he apologized for the lapses and said he had moved to fire Phoenix veterans’ hospital leaders.

“Leadership and integrity problems can and must be fixed now,” Shinseki said at the National Coalition for Homeless Veterans’ conference in Washington.

The VA is contacting each of the Phoenix veterans on the secret list “to bring them the care they need,” Shinseki said. Shinseki called on Congress to approve a bill making it easier for him to fire senior VA officials, and to fill vacant leadership positions in the department.

Shinseki, a native of Hawaii like the president, is a former U.S. Army chief of staff. He earned a Purple Heart and Bronze Star for his service in Vietnam. He left the military with the rank of four-star general.

Gibson, who was confirmed in February, like Shinseki is a graduate of the U.S. Military Academy at West Point, after which he served as an infantry officer in the Army. He previously served as chief executive officer for the United Services Organization, the USO, which provides aid to service members. He retired in 2004 from Birmingham, Alabama-based AmSouth Bancorp, where he was vice chairman and chief financial officer.

To contact the reporters on this story: Michael C. Bender in Washington at mbender10@bloomberg.net; Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editors responsible for this story: Steven Komarow at skomarow1@bloomberg.net Joe Sobczyk

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