Senators demand information from VA about alleged 'flagrant misuse' of bonus money

Bipartisan members of the Senate Veterans Affairs Committee have fired off a letter to Secretary Denis McDonough alleging that the VA flouted congressional intent when it approved bonuses totaling nearly $11 million to senior executives -- meant for other workers helping process new health benefits for veterans exposed to toxic substances.

Democratic chairman Jon Tester of Montana and Republican Jerry Moran of Kansas, along with 11 other senators from both parties, are demanding more information about the VA's approval of bonuses to senior executives in the central office in Washington.

The VA's inspector general found in a May 9 report that the funds, appropriated by the Pact Act as recruitment incentives for "critical skill" workers, were improperly given to the executives, some of whom took home more than $100,000.

Congress intended that the money be used to hire and retain specialists needed to process billions in new benefits for veterans dealing with health issues from being exposed to burn pits, Agent Orange and other toxic hazards.

The average bonus paid out was over $55,000, the report said, compared to incentive payments for non-executive staff of just over $8,000.

An aide to the Senate committee told ABC News some VA officials questioned the bonus payments but did not "speak up because of … ingrained culture."

The letter, first obtained by ABC News, says the inspector general referred the cases of nine senior executives to the Justice Department, which declined to pursue a criminal investigation. The senators say they "remain seriously concerned" about what could have been a conflict of interest in which executives chose to dole out bonuses for themselves or their senior peers.

The committee is seeking the documentation that justified the payments as a part of a request for data and information that would be "a first step" in assuring funds from the Pact Act are being used according to the intent of Congress and VA policy, the aide said.

"VA's flagrant misuse of recruitment and retention incentives ... is unacceptable and deeply concerning," the senators said in their letter.

They said they share the concerns of the inspector general and "senior officials who initially raised the alarm" about the awards that were paid out to an "unspecific group of senior executives based in Washington, D.C."

The senators are also seeking information on recoupment of the bonuses. Most executives returned the money or agreed to do so in September, but 19 challenged the decision, according to the inspector general report.

Some resigned after being told they needed to pay back the bonus money. It's unclear whether the VA will be able to recoup bonuses from those who've resigned.

Tester said he"takes seriously" the issue of firing officials over the incident, the committee aide said, but is fact-finding and pressuring McDonough for information before making any calls for discipline.

"This report must serve as the beginning of the end of these inconsistent management and oversight structures and an opportunity to strengthen the Department," the senators wrote to McDonough.

In a statement to ABC News, Terrence Hayes, the VA's press secretary, said "We commit to Veterans that we will learn from this error and fix it, as we have already begun to do."

The VA says it's recouped 92% of the bonuses it asked to be repaid and that it agrees with all the recommendations made by the internal department watchdog.