Department of Veterans Affairs officials Tuesday dispatched two executives who had been on the job for only a few days to explain to Congress how for years the agency suffered what one called an “extreme loss of income” by allowing others to use its land for unrelated purposes and failing to collect rent.
Skye McDougall, who started as Acting Network Director of the Veterans Integrated Service Network on Jan. 1, was asked how the VA allowed groups like a botanical garden to occupy and even sublease its West Los Angeles property in defiance of VA rules while the area had the largest population of homeless veterans in the country.
“I can’t explain how it happened and the person responsible has left the organization. Clearly there was not a segregation of duties and there wasn’t a bona fide contracting officer,” she responded.
She said she has asked criminal investigators to look into the behavior of outgoing VA officials and that “it’s not confirmed but I’ve heard reports that the FBI is involved.”
McDougal was testifying Tuesday at a hearing by a subcommittee of the House Veterans Affairs Committee alongside Jan Murphy, acting deputy undersecretary for health, who started Jan. 19.
Rep. Jackie Walorski, R-Ind., asked whether “with the huge amount of responsibility and cleanup that you two have been left with, has there been any investigation into who was responsible ... and going back and holding people accountable who you're holding the bag for?”
McDougal fingered Ralph Tillman, a former asset manager at the VA, as the man responsible for allowing a medical school to occupy VA land for years without paying rent and without a lease.
“He’s retired from the VA … I believe in September,” she said.
The LA-area facility housed college sports fields, a bird sanctuary and even a laundromat, according to a review by the Government Accountability Office.
“I’m as appalled by what the GAO uncovered as the committee is. ... I was not happy with what I heard. I personally called the criminal [office of inspector general] to make sure they had the information I had. My office has taken over the land use.”
The facility’s former director also lived on the property, paying $2,400 a month for a 3,500-square-foot house that was valued at $10,000 a month, Walorski said.
In 1888, 338 acres was donated to the U.S. government with the restriction that it be used to serve veterans in perpetuity.
But for decades, it has been used for other purposes. The VA is permitted to rent out some of its unused land to produce revenue, but it has often failed to collect rent or keep track of who was occupying the space.
There have also “been multiple embezzlement investigations involving the [West Los Angeles] facility over the last few years, at least one of which led to a guilty plea involving the theft of over $680,000. Another investigation is ongoing,” said Rep. Mike Coffman, R-Colo., chairman of the committee's investigative panel.
On Jan. 27, the day the congressional hearing was announced, the VA agreed to settle a long-running lawsuit in which veterans accused the department of allowing its facility to be used for general recreation, even as the Los Angeles area has more than 4,000 homeless veterans.
A judge had previously ordered the construction of an amphitheater on the property to be halted.
But the VA officials Tuesday would not say what that meant for the land, only that it would undertake a 10-month review to create a “master plan” for the property. Another master plan had been created in 2011.
Asked by Coffman whether it meant eviction for groups using the land for purposes unrelated to healthcare for veterans, Murphy would say only that “the master plan that is going to be developed will address those issues. … All other entities that do not meet the criteria of support to veterans will be looked at critically.”
Coffman responded: “Here’s the problem: We already know that it’s out of compliance. ... The land was [bequeathed] for the specific purpose of serving veterans. I don’t understand why you have to go through a bureaucratic process when you’re already in violation of law.”
Veterans’ advocates said that if facilities produced income that directly funded veterans’ healthcare, their use of the space would be in keeping with the requirements, but officials could not say how some current uses would qualify.
“Can anyone explain to me how a bird sanctuary can be somehow inured to the benefit of homeless veterans?” Coffman asked.
“I cannot,” Murphy responded.