backlog VA photo

In August, the VA’s inspector general said the weight of paper files at the agency’s Winston-Salem, N.C., office had compromised the structural integrity of the building.Office of the Inspector General/Department of Veterans Affairs

The Department of Veterans Affairs handed out millions of dollars in bonuses to top officials over five years, even as the number of veterans facing long waits for disability benefits ballooned.

Internal VA documents obtained by the Center for Investigative Reporting reveal that as the backlog worsened, the officials with the most responsibility for addressing claims problems received the largest bonuses.

In 2011, when the backlog of disability claims grew by nearly 300,000, the agency granted its top performance award, $23,091, to both Lois Mittelstaedt and Diana Rubens – two top deputies of VA Undersecretary for Benefits Allison Hickey.

Thomas Lastowka, director of the VA’s Philadelphia regional office, got the same $23,091 bump in 2011 even though the backlog of claims at his office doubled between 2010 and 2011.

Michael Cardarelli, principal deputy undersecretary for benefits, received a bonus of $20,716 in 2011. He resigned abruptly in February.

“Incredible,” said Rep. Duncan Hunter, a California Republican and Marine Corps veteran of both Iraq and Afghanistan. “Can you imagine failing utterly at your job and then getting a bonus?”

Earlier this month, Hunter called for the resignation of VA Secretary Eric Shinseki. Shinseki, Hickey and other agency leaders appointed directly by the president are not eligible for bonuses.

On Thursday, Hunter wrote a letter to President Barack Obama, signed by a bipartisan group of 25 other members of Congress, all veterans, asking the president to become personally involved in tackling the backlog.

“The VA is clearly on the wrong track,” the letter states.

The VA has not yet awarded bonuses for 2012, and in a statement responding to questions about its history of ample bonuses, the agency said none would be given for the 2012-13 fiscal year.

“Instead the funds will be reinvested to accelerate the elimination of the backlog,” the VA said.

Mittelstaedt, Rubens, Lastowka and Cardarelli could not be reached for comment.

Rep. Jeff Miller, the Florida Republican who leads the House Committee on Veterans’ Affairs, said he hoped the agency would make “any future bonuses for Veterans Benefits Administration employees and managers contingent on a significant drop in the number of veterans stuck” in the backlog.

Last week, the agency vowed to clear claims pending for two years or longer by June 18.

Both Miller and the committee’s ranking Democrat, Rep. Mike Michaud of Maine, have called on the agency to more aggressively discipline and fire poorly performing managers.

At a congressional hearing April 11, Shinseki responded by saying that in performance evaluations, the VA found many of the agency’s leaders were outstanding.

“How come these directors are even in these positions?” asked Cody Jackson, an Iraq War veteran and farm mechanic from Modesto, Calif. “I know if I got behind at work, they would tell me, ‘This is the end.’ ”

The data obtained by CIR indicates that many managers responsible for the backlog received bonuses under the administrations of both Obama and his predecessor, President George W. Bush.

From 2007 to 2011, the agency handed out $16.8 million in extra compensation to 463 senior officials. 

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Aaron Glantz was a senior reporter at Reveal. He is the author of "Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream." Glantz produces journalism with impact. His work has sparked more than a dozen congressional hearings, numerous laws and criminal probes by the Drug Enforcement Administration, FBI, Pentagon and Federal Trade Commission. A two-time Peabody Award winner, finalist for the Pulitzer Prize, multiple Emmy Award nominee and former John S. Knight journalism fellow at Stanford University, Glantz has had his work has appear in The New York Times, Chicago Tribune, NBC Nightly News, Good Morning America and PBS NewsHour. His previous books include "The War Comes Home" and "How America Lost Iraq."