VA demotes and reassigns Phila. director Rubens

The U.S. Department of Veterans Affairs has demoted and reassigned the embattled director of its Philadelphia benefits office, in the wake of a congressional inquiry and call for a criminal investigation into how she got the job and how much the department paid to relocate her to Pennsylvania.

In a statement, the VA said Diana Rubens would become assistant director of the Houston benefits office. Her new salary will be about $158,000, or $23,000 less than she made in Philadelphia, according to a congressional aide.

Rubens can appeal the decision, the VA said. She did not respond to a request for comment.

Testifying this month before the House Committee on Veterans Affairs, Rubens repeatedly invoked her Fifth Amendment right and refused to answer questions about allegations that she schemed to get herself reassigned last year from Washington to Philadelphia - in a post that came with less responsibility but the same pay - so she could be closer to family. At the time, the government paid nearly $300,000 in expenses - included paying a contractor who bought her home - to relocate her from Virginia to Havertown.

After an internal inquiry, the agency's top watchdog recommended that federal prosecutors open a criminal investigation into the matter. The status of that request is unclear, but VA officials have said she was facing internal disciplinary action.

The reassignment and demotion reflect a stunning fall for Rubens, who joined the agency as a claims examiner in 1987 and rose to a senior post at headquarters.

She took the job overseeing the Philadelphia and Wilmington staffs as the Germantown office became entangled in the national scandal over service to veterans. She has adamantly defended changes she said have been made under her watch, including improving a toxic relationship between management and staff, and speeding up service on claims.

The VA on Friday also reassigned another senior administrator facing similar scrutiny. Kimberly Graves had been accused by the VA inspector general of helping to create an opening in St. Paul, Minn., so she could transfer to that post.

The VA said Graves was being reassigned to its benefits office in Phoenix.

The transfers were immediately decried by House Republicans, who have criticized the VA as shuffling employees under scrutiny rather than firing them.

American Legion National Commander Dale Barnett also assailed the moves.

"After embarrassing the department and, according to the , inappropriately using their positions of authority for personal and financial benefit, they are still allowed to draw generous paychecks and continue employment in an agency that was created to serve veterans," Barnett said in a statement. "This is an insult and disgrace to all veterans. Any promises that VA officials make about accountability in the future need to be taken with a grain of salt."

Rep. Ryan Costello (R. Pa.) called it a " 'musical chairs' reassignment."

Rep. Jeff Miller (R. Fla.), chairman of the House VA committee, said the agency was tolerating "corruption, malfeasance, and incompetence" in its ranks.

"When presented with the same set of facts regarding Diana Rubens' and Kimberly Graves' conduct, VA's inspector general made criminal referrals to the Department of Justice, while VA leaders went out of their way to allow Rubens and Graves to stay on the department's payroll and preserve their retirements," Miller said in a statement.

The VA said Rubens and Graves had been returned to "general service" ranks. Both had been classified as senior executive service employees, a rank reserved for high-level government officials.

Cheryl Rawls, director of the Winston-Salem, N.C., benefits office, has been assigned as interim director in Philadelphia. According to the VA, Rawls is an Army veteran and has led the Winston-Salem office since 2012.

tnadolny@phillynews.com

215-854-2730 @TriciaNadolny