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Many VA officials who got bonuses sat on pay review boards

WASHINGTON -- Nearly two dozen officials who received hefty performance bonuses last year at the Veterans Affairs Department also sat on the boards charged with recommending the payments.

Documents obtained by the Associated Press raise questions of conflict of interest in connection with the bonuses, some of which went to senior officials involved in crafting a budget that came up $1.3 billion short and jeopardized veterans' healthcare.

The documents show that 21 of 32 officials who were members of VA performance review boards received more than half a million dollars in payments themselves.

Among them were nearly a dozen senior officials who devised the flawed 2005 budget. Also rewarded was the deputy undersecretary for benefits, who manages a system with severe backlogs of veterans waiting for disability benefits.

Some members of the review boards, which are appointed by VA Secretary Jim Nicholson, also had input on bonus recommendations involving themselves, fellow members, and spouses that made questionable performance claims and neglected agency problems.

The VA, which has defended the bonuses as necessary to retain hard-working senior employees, says board members do not participate in bonus decisions that involve themselves or fellow board members. In those cases, recommendations are made by agency heads in consultation with deputy undersecretaries who sit on the boards, the agency says.

But government watchdogs were harshly critical, saying the process does little to instill public confidence in the fairness of awards. In its last known report on the issue -- one involving NASA -- the Government Accountability Office in 1980 urged that performance boards include "one or more impartial members from outside the agency," although agencies are not required to do so.

With the exception of a panel tasked with reviewing the VA inspector general's office, all the VA's performance board members come from within the agency.

In one case, Michael Walcoff, associate deputy undersecretary for field operations who sits on two of the review boards, and his wife, Kimberly, a VA director, received a package of bonuses totaling $42,000.

"This is a scandal in the making," said Paul C. Light, professor of public service at New York University who specializes in government reform.