IG Report: Veterans Administration Undersecretary Too Cozy with Contractor

Not that the Department of Veterans Affairs doesn’t have enough problems, but a new report from the Veterans Affairs Office of Inspector General found favoritism, preferential treatment, and unnecessary spending by the VA’s recently-retired undersecretary for memorial affairs.

Steve Muro, the undersecretary who managed the National Cemetery Administration,  just happened to retire one month before the IG report was completed and released. That report offers an unflattering portrait of some of his decisions:

We concluded that Mr. Steve Muro, former (retired) Under Secretary for Memorial Affairs, NCA, VACO, engaged in a prohibited personnel practice when he created a position within NCA and preselected an employee, who was also a friend, for that position. Over a 3-year period of time, the employee planned to retire several times, but when retention incentives and quality step increases (QSI) no longer enticed him to remain, Mr. Muro created a promotional opportunity which raised the employee’s salary by approximately $10,000 annually, thereby increasing the employee’s retirement annuity by about $400 each month.

We further found that Mr. Muro engaged in preferential treatment of an NCA contractor, Ms. Patricia Noonan, President of Noonan & Associates, when he developed a less-than­ arm’s-length relationship with her; when he continued to communicate with her via email and telephone after being given guidance to cease those communications; misused his title when he gave her an unfair competitive advantage by providing her a letter of recommendation, which she used to procure additional NCA contracts; and when he improperly supported her in her efforts to obtain additional VA contracts.

(Note: Patricia Noonan should not be mistaken for Wall Street Journal columnist Peggy Noonan.)

Telephone records reflected that between October 26, 2012, and October 18, 2013, Mr. Muro and Ms. Noonan exchanged over 1,200 telephone calls and that he called her about twice as many times as she called him. This included calls during business hours as well as between 6:00 p.m. and 12:00 a.m., weekends, and holidays. Mr. Muro told us that some of these calls were personal in nature but that a lot of them were business-related. He said that they talked whenever he had the opportunity, which included evenings and weekends…

VA financial records reflected that NCA paid Ms. Noonan $374,167 for services rendered to NCA between February 3, 2010, and September 28, 2013, for 90 different transactions.

Noonan & Associates officially protested its exclusion from subsequent Department of Veterans Affairs contracts; after a review the General Accounting Office found that the VA “reasonably concluded that the protester had an organizational conflict of interest.”

President Obama nominated Muro for his undersecretary position in 2011 and he was confirmed. In 2008, Muro was selected by President George W. Bush to receive a Presidential Meritorious Rank Award, recognizing “exceptional leadership, accomplishments and service over an extended period of time.”

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