Embattled VA director gets her day in court

For years, Diana Rubens was an ostensibly successful government employee who climbed the executive ladder at the U.S. Department of Veterans Affairs.

After being tapped in 2014 to clean up the mess at its Philadelphia benefits office, she won praise. But in the last year, Rubens became something else: a poster child, deserved or not, for the flawed management at the VA.

Inspectors accused her of engineering her transfer from Washington to an easier job in Philadelphia for the same pay. Members of Congress said she fleeced the government with $270,000 in relocation expenses.

Through it all, Rubens kept a low profile. When the agency watchdog called for a criminal investigation, she turned silent, ultimately invoking her Fifth Amendment right.

On Wednesday, though, her silence could end.

At a hearing that could stretch more than a day, Rubens and her lawyer will ask an administrative judge to overturn her demotion and $57,000 pay cut. Coming a month after federal prosecutors declined to open an investigation into her conduct, the proceeding could be the first time Rubens publicly shares her side of the story. It could also offer a window into issues still roiling the Germantown office.

Earlier this month, the VA said it had finalized discipline against nine Philadelphia employees. Each was demoted or suspended. None were fired.

The only ones the VA has publicly identified are Lucy Filipov and Gary Hodge, managers accused of pressuring Filipov's employees to pay for the services of Hodge's wife, a medium who calls herself the "Angel Whisperer."

After seven months on paid leave, both were demoted and returned to work this month. According to a VA spokesman, Filipov, formerly the office's assistant director, is now an insurance specialist, and Hodge, formerly director of its pension management center, is a veterans claims examiner. The VA would not say if their salaries have been cut.

Rubens' alleged violation - and punishment - was more severe. In a September report, the VA inspector general accused her of arranging her own move to Philadelphia so she could be closer to family in Delaware, a relocation that costs the government $274,000.

"[We] found that Ms. Rubens inappropriately used her position of authority for personal and financial benefit when she participated personally and substantially in creating the Philadelphia . . . vacancy and then volunteering for the vacancy," Deputy Inspector General Linda Halliday wrote.

The agency reassigned Rubens to Houston, demoted her and cut her pay from $181,487 to $123,775, records show.

Despite calls from Congress that she be fired, VA Deputy Secretary Sloan Gibson defended the punishment. The evidence, he said last month, "does not support one violation of law, not one violation of rule, not even one violation of regulation related to relocation expenses."

Still, Rubens appealed, sending the case to the Merit Systems Protection Board, a quasi-judicial agency that adjudicates employment claims from federal employees.

Neither Rubens nor her attorney, Debra Roth, responded to a request for comment Tuesday.

Though its records are confidential, the board has set aside 12 hours Wednesday and more time Thursday for a public hearing that observers say functions much like a trial. The government will present evidence. Witnesses will testify. And Rubens' attorney will have the chance to both cross-examine and present a defense.

"A lot of cases turn on credibility," said Alan Lescht, a Washington attorney who specializes in representing employees before the merit board. "One person says this happened. One person said it was different. So a judge has to take a measure to tell OK, who is telling the truth?"

Rubens will not have to wait long for a ruling from Judge William Boulden. He has only until Monday to issue a decision, thanks to laws Congress passed in 2014 to speed up the timeline for resolving some merit board cases.

Under the new law, Rubens has no right to appeal Boulden's ruling. But after losing a similar claim, Sharon Helman, the ousted director of the Phoenix VA hospital, challenged the decision in federal court.

tnadolny@phillynews.com

215-854-2730 @TriciaNadolny