VA: Phila. director gets to keep her job

After months of uncertainty over who would lead the Philadelphia Veterans Affairs benefits office, the agency on Monday ended up back where it started: Diana Rubens, the once-embattled director targeted for a demotion and transfer, instead will keep her job.

VA Deputy Secretary Sloan Gibson announced the news in meetings with employees in Philadelphia and an email to members of Congress.

In an interview, Gibson described the move as a fresh start after nearly two years of scrutiny on the Germantown facility.

"This is the chance for us to get back to the business of the veteran," he said. "The idea is for us to be able to put behind us as much of the distraction as we possibly can and start looking forward."

Rubens, who sat alongside him, said she was eager to reconnect with the staff after being out for months. And she echoed Gibson's desire for the office, described as among the VA's most troubled, to shed its negative image.

"I wholeheartedly believe that as a team, we're capable of doing terrific things for veterans," she said.

The VA's ability to turn a new page could hinge on whether critics, including congressional Republicans who have put an intense focus on the facility and Rubens, relent.

Rubens was brought in two years ago to help improve the Philadelphia office. But months after arriving, she started drawing her own headlines when concerns arose over how she got the job.

After an internal review, the VA's top watchdog accused Rubens, a senior agency executive in Washington, of helping coordinate the reassignment of the previous Philadelphia director so she could take his job, which would put her closer to family in Delaware.

The government also spent $274,000 relocating her from the Washington area to Havertown, an expense internal inspectors said could have amounted to misuse of government funds.

In response to the report, Gibson last fall demoted Rubens, slashed her $181,000 salary by almost a third, and reassigned her to Houston. He said he found no evidence she gamed the system but said she showed poor judgment by not recusing herself from any role in the previous director's reassignment.

Rubens denied any wrongdoing, and said she had unfairly become a scapegoat for critics looking to tear apart the VA. She appealed to the Merit Systems Protection Board, which reviews government employee claims.

This month, a Philadelphia judge sided with Rubens and ordered the VA to reinstate her. Judge William Boulden didn't clear her of wrongdoing but said her punishment was too severe because VA officials failed to discipline others involved in the case.

On Monday, Gibson said his original decision to demote and relocate her was appropriate. But he said he accepted Boulden's ruling.

"The judge disagreed, OK," he said. "So I've got to get over that, I have to get past that. And I have to make the best decision I can possibly make for veterans and for taxpayers. And I believe that decision is for Diana to be right here, where we had originally intended her to be."

Gibson also said veterans would benefit from Rubens' nearly 30 years of VA experience, while taxpayers won't have to foot the bill for relocating her again. (In a nearly identical case, Gibson also reinstated Kimberly Graves, who ran the agency's St. Paul, Minn., office until she also was demoted and transferred.)

He said he still intends to issue some sort of discipline for Rubens but is waiting on a report from a VA investigator.

Her return drew some criticism Monday, including from Joe Malizia, president of the local American Federation of Government Employees union, which represents about 700 of the office's employees.

Malizia said the employees are "still trying to get out from under that negative cloud" caused by office mismanagement.

"I'm not sure Diana can help us progress beyond that," he said. "So in that sense, the jury is still out, to see if she can be the person that Sloan Gibson needs her or wants her to be."

tnadolny@phillynews.com

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@TriciaNadolny