The Department of Veterans Affairs removed two ranking managers Monday from its embattled Philadelphia office, days after an internal report cited both for their roles in a party where workers were encouraged to pay one manager's wife, a self-described medium, to contact the dead.
In a brief statement, the agency said Lucy Filipov, the office's assistant director, and Gary Hodge, director of its pension management center, had been "temporarily relieved" while it investigates the allegations.
The suspensions marked the first time the VA announced administrative actions against employees since its Philadelphia benefits office came under scrutiny more than a year ago. An April report from its inspector general detailed widespread problems at the Germantown site, including manipulated claims, ignored veteran inquiries, and a toxic relationship between staff and management.
The missteps that led to Monday's removals had little to do with those issues, or the office's core mission - serving veterans.
In a report released Thursday, James O'Neill, assistant VA inspector general for investigations, said the June 2014 party Filipov hosted at her South Jersey home crossed the line from innocuous social gathering to ethical violation. He said Filipov misused her position by arranging for Hodge's wife to attend, then "recruiting" her employees to attend and pay the woman $35 a reading.
Messages left Monday for the Hodges and Filipov at their homes were not returned. They previously have not commented on the claims.
Loretta Hodge, according to an online resumé, refers to herself as "the Angel Whisperer," and lists her skills as "communicating with deceased loved ones, Spirit, intuitive counseling, and messages from the Angels."
At Filipov's party, guests who wanted a reading added their cash to a pile in the kitchen, then met privately with the medium, who held a crystal and said a prayer as each séance began, according to the inspectors' report.
Filipov, who has worked for the VA since 1987 and was the office's acting director at the time, told investigators the party was a private gathering of friends.
But O'Neill said the employees who attended did not stay to socialize and left almost immediately after their readings. One guest said attendees bickered over who would get their reading first because it was late and they wanted to get home.
O'Neill also said Filipov's friendship with the employees was problematic. He said establishing personal relationships with some subordinates "gives the appearance of preference for those few employees."
Hodge, who started working at the VA in 1993, was temporarily moved to a post in Washington after the inspector general's April report. VA officials wouldn't discuss the reason, but a spokeswoman at the time said his reassignment was not related to those initial findings.
In last week's report, investigators faulted Hodge for failing to report his wife's income as a medium on financial disclosure forms he is required to file with the Office of Government Ethics or to pay federal or state taxes on it prior to the 2014 tax year. Hodge told investigators his wife had earned more than $31,000 as a psychic between 2012 and 2014.
O'Neill said he referred the matters pertaining to Hodge's wife's income to the U.S. Department of Justice, which declined to prosecute.
After the news broke Monday, Rep. Patrick Meehan, a Delaware County Republican whose district also includes parts of Montgomery and Chester Counties, said in a statement that it was "about time anyone at the VA is held accountable for anything."
Rep. Mike Fitzpatrick, a Republican from Bucks County, said he was pleased that the VA was "beginning to take action to remove those responsible for the reckless and harmful actions" at the office. "Whistleblower reports, confirmed by [Office of Inspector General] investigations, show a level of systemic mismanagement that can only be addressed by replacing those involved with new, truly committed individuals," Fitzpatrick said in a statement.
Kristen Ruell, a whistle-blower from the Germantown office who has called on the VA to appoint new management there, said she was relieved by the actions taken against the managers. But she said it was strange that the agency had not taken similar steps to hold others accountable for the problems that have affected service to veterans.
"I would have thought, with the evidence we've supplied them and the other allegations that have been substantiated, this would have happened earlier," she said. "And on different grounds."