Department of Veterans Affairs Secretary Denis McDonough, left, and VA Inspector General Michael Missal listen to opening statements during a House Veterans’ Affairs Committee hearing on June 4, 2024. (Joe Gromelski/Special to Stars and Stripes)
WASHINGTON — House lawmakers on Tuesday demanded the resignation of Shereef Elnahal, undersecretary for health at the Department of Veterans Affairs, for withholding information from the VA secretary about plans to give large bonuses to senior managers meant for rank-and-file workers.
During a hearing of the House Veterans’ Affairs Committee, Rep. Derrick Van Orden, R-Wis., presented VA Secretary Denis McDonough with a resignation letter for Elnahal’s signature.
“I cannot justify [Elnahal] serving any longer in the capacity” of undersecretary, Van Orden said at the hearing to examine how and why more than $10.8 million in bonus payments were given to 182 senior-level executives at VA headquarters without the VA secretary knowing about it. “I cannot justify his employment any longer.”
McDonough declined requests from Van Orden and other lawmakers to ask for Elnahal’s resignation or terminate him. He described the unfolding scandal as a “series of massive mistakes that was very badly handled.”
“I feel like I am responsible for this,” McDonough said.
But Michael Missal, the VA’s inspector general, said Tuesday that in the weeks prior to the payments going out in September 2023, McDonough sought to learn from Elnahal about any awards intended for executives that went beyond the scope of the bonus program.
Elnahal told McDonough about several payments intended for hospital directors and physician leaders at regional VA medical centers, Missal said. But Elnahal said nothing to McDonough about detailed plans for awarding bonuses to every senior manager at the central office in Washington, Missal said.
Rep. Mike Bost, R-Ill., chairman of the House Veterans’ Affairs Committee, presides over a hearing at the Capitol on June 4, 2024. (Joe Gromelski/Special to Stars and Stripes)
Known as critical skills incentives, the bonuses were established in 2022 to recruit and retain rank-and-file workers, including housekeepers, police officers and human resource staff. The jobs typically have vacancies and large workloads.
Missal’s office published an audit in May that first raised questions publicly about millions of dollars in bonuses paid to senior-level executives. The IG’s audit found Elnahal and Joshua Jacobs, the VA undersecretary for benefits, allowed the plan to advance for the payments to senior executives.
Neither Elnahal nor Jacobs testified at the hearing Tuesday, though lawmakers had requested they be there.
“I wish we had an opportunity to hear directly from Undersecretary Elnahal and Undersecretary Jacobs. When do you think that we’ll be able to have them before us?” Van Orden asked.
McDonough responded: “Look, I thought it was important for me to come because, for the reasons I’ve just spelled out, which is, I feel responsible for this.”
“But they are the ones that took the actions and directed what took place, and that’s why we really need to have them in here,” Van Orden said.
In September 2023, most senior-level executives at the VA headquarters in Washington improperly received bonuses, according to the IG audit.
Department of Veterans Affairs Secretary Denis McDonough looks at his phone during a recess in a House Veterans’ Affairs Committee hearing on June 4, 2024. (Joe Gromelski/Special to Stars and Stripes)
McDonough halted the bonuses after receiving a call from the VA’s chief financial officer about large, unexplained payments that were being processed and sent out from the VA’s financial services center to senior VA managers. Amounts ranged from $39,000 to more than $100,000.
Rep. Mike Bost, R-Ill., chairman of the House Veterans’ Affairs Committee, said the payments were not due to a policy error, as McDonough asserted, but a calculated plan developed over months without the VA secretary’s knowledge.
“Dr. Elnahal offered only information about the field executives receiving bonuses. He deceived you. It confounds me you can have trust in him after the [Office of Inspector General] recorded that he deceived you,” said Rep. Keith Self, R-Texas.
He said the credibility the VA has developed under McDonough’s leadership from expanding health services and providing disability benefits to toxic-exposed veterans “can be undone in a moment of time.”
Rep. Morgan Luttrell, R-Texas, emphasized the need for disciplinary actions against Elnahal, Jacobs and others who advanced the bonus plan for senior executives.
Luttrell, a former Navy SEAL, said he found it offensive that senior leaders at the Veterans Health Administration received bonuses at a time when veteran suicides are on the rise.
“The executive director for suicide prevention received almost $50,000,” he said. “I’m pretty sure you probably yanked all this money back. But my point is, you just rewarded these people for failure.”
