A high-ranking Veterans Affairs official who was given nearly $300,000 in relocation costs to move from Washington, D.C., to Philadelphia last year was issued that hefty payout as part of a little-known program used to incentivize “highly qualified candidates,” TheDC has learned.
Diana Rubens, the former undersecretary for field operations, was paid $288,000 last year under what’s called the Appraised Value Offer program to take a job as the director of the Philadelphia VA regional benefits office.
Formerly known as the Guaranteed Home Buy Out, AVO serves as a back-up for VA and Veterans Benefits Administration employees who agree to relocate to take jobs at other stations.
Rubens’ massive payout — which is $270,000 more than the agency’s average relocation payment – was brought to light last month by Florida Rep. Jeff Miller, the chairman of the House Veterans’ Affairs Committee.
“The government shouldn’t be in the business of doling out hundreds of thousands in cash to extremely well-compensated executives just to move less than three hours down the road,” Miller said last month.
“For VA to pay such an outrageous amount in relocation expenses at a time when the department is continually telling Congress and taxpayers it needs more money raises questions about VA’s commitment to fiscal responsibility, transparency and true reform.”
The VA’s internal statistics show that Rubens, who oversaw 57 regional benefits offices in her previous job, presided over a massive increase in processing times for veterans’ claims.
When asked about Rubens’ payment, the VA did not clarify what caused it to be so high, saying only that it was related to house closing costs, relocation expenses and per-diem allowances. But a spokesman for the agency recently confirmed to TheDC that the payout was largely tied to the AVO program.
Under AVO, employees obtain appraisals from two approved realtors. The house must sit on the market for at least 60 days. If it doesn’t sell in that period, a contractor hired by the VA purchases it for the appraised value.
The VA spokesman explained that Rubens’ relocation payment was a “function of the high cost of homes in the Washington, D.C. area.”
The spokesman declined to provide more detail on the AVO program. A review of Rubens’ transactions for her Virginia home and the one she purchased in Pennsylvania does not shed light on why her relocation payment was so high. (RELATED: VA Official Paid $288K In ‘Relocation Payments’ To Move 140 Miles)
Rubens purchased her house in Alexandria, Va. for $697,000 in 2008. A real estate listing from June 2014 shows that Rubens’ home was put on the market for $799,900. The house did not sell to a third-party buyer and so was sold to Stone Financing LLC. for $770,000.
Rubens’ initial listing for the house conforms to AVO requirement that the listed price of the house must also fall within 105 percent of the average of the two appraisals.
Stone Financing is a wholly owned subsidiary of Brookfield GRS, the relocation services provider contracted for the VA’s AVO program.
Stone Financing did not sell Rubens’ house until February. When it did, the company took a large loss, according to real estate records. The house sold for $692,500. Rubens bought a house near her new station in Haverford, Pa. for $589,000 on Sept. 29, 2014, according to real estate records.
Asked how it came to be that Stone Financing took a $77,500 loss on the housing transaction, a spokeswoman for Brookfield declined comment.
The VA spokesman declined to answer whether the agency absorbs its contractors’ losses.
“The cost of [Rubens'] relocation was a function of the high cost of homes in the Washington DC area,” the VA spokesman said. “The costs that are incurred in any AVO relocation reflect the relative costs of housing in the area from which the individual is relocating.”
“Ms. Rubens is one of VBA’s most experienced and highly skilled senior leaders, having led the operations of VBA’s entire field organization for many years,” the spokesman said. “In filling the position of the Director of the Philadelphia Regional Office, VA recognized that its very best leader was needed to address the complex challenges and issues faced by the office and its employees.”
Rubens received more than $97,000 in bonuses between 2007 and 2011. But the average time to process veterans’ claims doubled to 325 days during that period. The ratio of backlogged cases nearly doubled as well, from 37 percent in 2009 to 71 percent in 2013.
As part of their relocation incentive programs, VA and VBA offers a “relocation bonus” for some employees who agree to take new jobs in different geographical areas.
According to the agency’s handbook, relocating employees who are desperately needed can earn a bonus of up to 100 percent of their most recent annual salary if they sign on for a minimum of four years. FedSmith.com, a website that tracks federal employees’ salaries, shows that Rubens was paid $181,000 in base salary in 2014. When asked whether Rubens received such a bonus, the VA spokesman again declined to comment.