VA weighs new punishment for Phila. director

One day after a judge reinstated the demoted director of Philadelphia's Veterans Affairs benefits office, a ranking VA official said he would impose a new punishment on Diana Rubens.

Deputy Secretary Sloan Gibson noted that in the ruling Monday, the judge for the Merit Systems Protection Board agreed with VA officials that Rubens had shown poor judgment two years ago by taking a role in the transfer of the former Philadelphia director, then seeking his job.

Judge William Boulden, however, said the law prevented him from imposing a less severe penalty. So Gibson said he would.

He said he would do the same for Kimberly Graves, a St. Paul, Minn., VA official who won reinstatement last week after a parallel appeal.

"We now find ourselves in a situation where both Rubens and Graves have been charged and those charges have been sustained," Gibson told reporters in a conference call. "And there has been no penalty."

Rubens and her attorney did not respond to a request for comment.

Gibson's statement could further prolong a convoluted case that has kept a national focus on Philadelphia's benefits office.

In November, the VA attempted to demote Rubens, cut her $181,000 salary by nearly a third, and reassign her to Houston as punishment for facilitating her predecessor's transfer.

She appealed, leading to a two-day hearing in Philadelphia last week and Monday's ruling from Boulden.

Gibson said he had not decided what the penalty should be, except that it will be less severe than the first. He also said he had not decided if Rubens and Graves would keep overseeing their offices, but he suggested moving them might not be prudent.

"I will cross that bridge when I come to it, if I believe that veterans are best served by that course of action," he said. "I would also remind you that if we were to relocate them, we would have to pay their relocation expense. So somebody help me understand how that's the right thing for taxpayers."

The government spent $274,000 to help sell Rubens' home in Virginia and relocate her to Havertown two years ago, an expense that drew scrutiny and criticism from Congress. Officials said Rubens wanted the Philadelphia job, which came with the same salary but less responsibility, because it put her closer to family in Delaware.

Boulden did not clear Rubens of wrongdoing, but he wrote that the punishment was excessive given that another senior VA official involved in the transfers was not punished.

A Chicago judge issued a similar ruling in Graves' case on Friday.

Gibson told reporters Tuesday that he had ordered a review to determine if the other individuals cited by the judges should also be punished.

Asked if the VA has legal authority to impose new penalties, Gibson reiterated that the judges' rulings took issue with the disciplinary actions, not the merits of the allegations.

"[Rubens'] judge really opened the door here by saying if he had the authority he would impose a lesser penalty," Sloan said. "I think that's the intent here. So I am not going to be so narrow here so as to not follow this all the way through to its logical conclusion. "

tnadolny@phillynews.com

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@TriciaNadolny