Veteran’s Administration Scandal and Business Ethics
Case Study
August 19, 2014

Abstract
This paper will discuss how the Veteran’s Administration first started and how it has evolved over the years to become the entity it is today, serving our nations veterans. I will also discuss how the Veteran’s Administration has been plagued with many scandals throughout its existence, from when it was known as the Veterans Bureau during the early 1920’s and also the many issues that the Veterans Administration has dealt with over the years to include those that were involved and their official capacity in wrong doings. This paper will look at how the Veterans administration has tried to make changes to support the increased number of Veterans after many of our past wars and some of the difficulties veterans from the Vietnam War have faced to receive care and benefits that were exposed to Agent Orange. I will also looked at the many problems veterans have faced over the years to include most recent allegation that the VA has gone through since the earlier part of this year and the changes that has taken place to correct the problem.

According to an article written by CNN, during the end of the Revolutionary War Congress was supposed to pay those veterans that were disabled during the war, but the service members individual states were left up to the task, leaving only a few thousand to receive any type of payment pay. Congress establishes the Veterans Bureau which was to help administer assistance to veterans of World War I. In 1921 President Harding appointed Colonel Charles R. Forbes as the head of a newly established organization The Veteran’s Bureau, which was created to provide medical care for veterans. During Forbes tenure he secretly made deals with contractors giving them government land for less than it actually was worth. In 1923 an investigation took place when an attorney for the bureau Charles Cramer, committed suicide. Forbes fled the country to Europe and later the investigations showed that he had stolen over 200 million dollars from the government. He was accused of bribery and corruption and was brought to trial in 1925 and found guilty and fined $10,000 and 2 years in Leavenworth.
Well with the onset on the Great Depression and the loss of many jobs and people losing their entire savings, many World War I veterans also suffered when they came home from World War I, so on May 19, 1924 Congress passed the World War Adjustment Compensation Act, which was supposed to provide a bonus to veterans based on the length and location of where they served. It was supposed to provide a $1.00 per day if served in the United States and a $1.25 per day served overseas. But it came with a stipulation Veterans who were authorized bonuses of more than $50 were issued adjusted service certificates from the Veterans’ Bureau. These certificates were in the form of an endowment policy payable 20 years from the date of issue and generally had a face value of $1,500.
Times were hard during the depression and Veterans were desperate and demanded payment of their bonuses, so a group of Veterans from Oregon began to organize a March on Washington and in March 1932 did so and it was known as the known as the (Bonus March), with other Vets joining in to fight for payment. President Hoover had to send General MacArthur and federal troop to disband the marchers. Congress authorized the VA to pay transportation expenses for marchers to return homes plus a daily subsistence allowance of 75 cents. According to a 1932 annual report, VA paid transportation costs for 5,160 veterans totaling $76,712.02 and in 1936 Congress authorized the VA to pay all bonuses. To most the Bonus March appeared to be a failure but it bought to light issues in how America cared for service members as they transitioned from military to civilian life. But without the march, these shortcomings may never have been known and steps addressed by Congress to correct the problem. This led to the passing of what many have called one of the most significant pieces of legislation ever produced by the federal government known as the GI Bill of Rights, a comprehensive benefits package to aid the transition of 16 million veterans returning from World War II.
The Veteran’s Administration was established in 1930 after congress united the three previous agencies which administered veteran’s benefits known as The Bureau of Pensions, The National Homes for Disabled Volunteer Soldier, and Independent Veteran’s Bureau. President Hoover signed the executive order establishing the VA on July 21, 1930. With the establishment of the new agency it was responsible for the medical services for wartime veterans, assisting them with disability compensations, life insurance, bonuses certificates, and retirement payments. To include payments for civilian employees (Woolley & Peters, 1930). Over the next decade from 1931 to 1941, the VA hospital grew from 64 to 91, and the number of beds rose from 33,669 to 61,849. Brigadier General Frank T Hines was selected as the first Veterans Administrator and did so until 1945 were he resigned his post after criticism about improper patient care, overly crowded hospitals, and overworked doctors and not enough doctors and staff to supply sufficient care for all patients. President Truman selected General Omar Bradley to take over the position as Administrator. General Bradley asked General Paul Hawley to become the director of medicine for the VA. Hawley was responsible for creating the department of medicine and outpatient treatment for veterans with disabilities not related to military service, and the creation of resident and teaching fellowships in VA hospitals. He also established a policy of affiliating new VA hospitals with medical schools. The appointment of VA medical staffs was removed from civil service rules in an effort to attract doctors and other professionals in larger numbers. It was under Hawley’s direction that VA’s hospital-based research program was begun. Gen. Omar N. Bradley On Feb. 1, 1946, Bradley made a report that the VA was operating 97 hospitals with a total bed capacity of 82,241 patients. The VA had Hospital construction underway which would produce another 13,594 beds. HE also stated that funds were available for another 12,706 beds with the construction of 25 more hospitals and additions to 11 others. But because of the demobilization. Over the next few months the total number of veterans would jump to more than 15 million and the current hospitals were starting to become overfilled and there were waiting lists for admission at practically all hospitals. In addition, there were 26,057 non-service-connected cases on the hospital waiting list. Now until the VA can complete more hospitals they had to incorporate the Navy and Army both for beds to handle the huge increase of veterans. The American Legion wanted to bring charges against General Bradley requesting his resignation because of the lack of facilities, for hundreds of thousands of combat veterans being able gain access to services and facilities.
In 1947, Congress appointed former President Herbert Hoover to oversee a massive examination of the federal government. The Hoover Commission recommended a thorough overhaul of the Veterans Administration in 1949, of course the American Legion opposed all of the recommendations. Most of the waste discovered dealt with chief housekeeping services, supply, records management and building maintenance. They found that the federal government spent more than $6 billion a year for supplies and holds military and civilian warehouse inventories of $27 billion. Central coordination of purchasing is lacking. Warehouses are poorly located and carry duplicating inventories. They found 17 unrelated systems of property identified in use at one time, 19 dealing with the handling of records. Now most of the records that the government held could fill buildings the size of the Pentagons 6 times over. So with this the commission called for all unnecessary records to be destroyed. Again many of the recommendations of the panel the VA was looked at for cut backs in the building of new facilities as well as stock piling of inventories and cut backs in staffing.
The year rolls around and in 1953, Congress and the White House calls for another Hoover Commission, which found wide spread inefficiency and waste throughout the Veterans Administration. The average hospital stay for a person with a tonsillectomy was eight days in a VA hospital. If they were in a non-VA hospital their stay would be about 1.4 days. One of the biggest problems came not from caring for the 3,500,000 vets with service-related conditions, but from the 21, 000,000 others vets who were covered and had conditions that were not connected to their military service. But this actually brings up a good question here, my thoughts were once you were actually rated with service connected disabilities you could be seen by the VA for any illness you may have.
Many of our veterans that served during the Vietnam War found it increasingly difficult to get assistance form the VA with regards to ailments they had due to exposure to the herbicide Agent Orange. Many Veterans suffered so many illness but the VA failed to recognize the linked that the herbicide was actually used for a long period of time. Countless numbers of Vets died without receiving proper care, benefits, and compensation for exposure. I personally have lost relatives that served during that time and it was a very long uphill battle for them to finally get the government to admit that the herbicide was used and the VA to compensate and provide the necessary care and treatment for those veterans that we have left. Many veterans committed suicide and found themselves homeless and today most of the survivors are in their 60’s and 70’s years of age, and the VA still receive a great deal of criticism for providing the proper care and service for these vets. In accordance to an article written in the Disposable heroes, the author discussed a Health study conducted in 1979 at the request of the VA director. The study involved 1,200 pilots and chemical handlers who sprayed Agent Orange in Vietnam as part of Operation Ranch Hand. Really this study did not make sense for a couple of reason, one it was the VA’s responsibility and should not have been place on the Air Force and second the study did nothing to monitor the health of those veterans or persons subjected to the exposure of handling the chemicals. The National Academy of Sciences reviewed the methods that the air force intended to use and warned that the study probably would not identify any adverse health effects because of the way the study was designed, but this apparently was what the VA wanted so they would not have to be held accountable for disability benefits to tens of thousands ill veterans. The VA continued to deny most all Agent Orange claims which triggering a revolt from veterans who were in desperate need of help. So on March 14, 1981, Vietnam veteran and marine Jim Hopkins drove his jeep through the glass doors and into the lobby of the multimillion dollar Wadsworth VA hospital in Los Angeles, California. He began shooting rounds into phots of Ronald Reagan and Jimmy Carter while yelling that he was not receiving the medical attention he needed. He was apprehended by police and as he was being taken away he was caught on television cameras as saying that his brain was being destroyed by Agent Orange. His actions received national media attention and drew public attention of Agent Orange for the first time. The VA continued to claim that they did not neglect veteran but the then Reagan administrations kept switching from ignoring claims from protesting veterans which led to veterans going on a hunger strike there at the Wadsworth hospital. President Reagan responded by evicting the protestors. The protestors decided to continue their efforts in front of the White House, which forced a meeting with protestors and congressional veterans’ committees. After talks Congress decided to come to terms which would end the 53 day hunger strike. Congress also had overridden President Reagan keeping the VA’s outpatient centers open, did not cut veterans’ benefits, and pushed to conduct studies of PTSD and Agent Orange. In 1984, the air force released the preliminary results of the Ranch Hand study. Despite its flaws, it found that pilots involved with spraying Agent Orange had higher rates of skin cancer, liver disorders, circulatory problems, which also found children of these veterans had higher rates of birth defects. Yet the study could not be link definitively prove that Agent Orange was the cause. So with the government’s rejection of almost all disability claims based on Agent Orange, Vietnam veterans launched a class-action lawsuit in 1979 against five manufacturers of Agent Orange, hoping to win some compensation for their injuries. In 1984, the chemical companies offered $180 million to the veterans if they settled the suit out of court which the veterans decided to except because it was too hard to find positive proof that to support their claim Agent Orange caused their illnesses. In 1984 a Congressional investigation determines that officials of the VA diverted or refused to spend more than $40 million dollars that Congress approved to aid Vietnam veterans with readjustment problems, the Washington Post reports at the time (Pearson, 2014). In 1986 the Center for Disease Control (CDC). After spending $46 million, they stated that it was impossible to conduct a proper study because the military’s poor record keeping with regards to what areas of Vietnam were sprayed, and when, and which ground units were located at a particular time. So the House of Representatives Government Operations Committee found in 1990 that officials in the Reagan administration controlled and obstructed the CDC study because they did not want to admit the government’s liability and pay disability benefits (Binh, 2007). The final report of the Ranch Hand study was released in 2005 which revealed that some members who were not involved in Ranch Hand but served in Southeast Asia, were exposed to Agent Orange and other herbicides because they had served in Vietnam. Therefore the basis on which the air force concluded that there were no significant differences in cancer rates between the two groups was totally undermined. When Joel Michalek, a scientist reevaluated all the information collected taking into consideration the flaws found, he discovered that the cancer rate doubled among Ranch Hand veterans with the highest level of dioxin exposure. A cancer rate increased in direct proportion to dioxin levels, the first time such a trend had been seen in the Ranch Hand study. When Michalek tried to get an outside contractor to formally reanalyze the data, the air force sent him a letter on July 6, 2006, ordering him to delete the data (Binh, 2007). So even thou the chemical companies and the VA were tremendously successful cheating our sick Vietnam veterans of the compensation and care they deserved. Most of the $180 million settlement fund was depleted by lawyers, who received $9.2 million of the money, and was hamstrung by the stringent terms of who was eligible to receive money. Only a quarter of the 200,000 veterans and their families who filed claims actually received compensation and out of 92,276 Agent Orange claims filed with the VA by veterans and their families, only 5,908 had been approved as of 1998, despite a 1991 law, which listed some illnesses linked to Agent Orange that would automatically qualify veterans to receive benefits. Again I am a retired Naval Officer and when it came to conducting the research for this paper my heart sank for are Vietnam Vets who have suffered and still are suffering today simply because they were doing a job they were tasked to do and yet the system to this day still has failed to help them. In 1986 the Veteran’s Administration’s Inspector General’s conducted an inspection and discovered that 93 physicians employed by the VA had sanctions against their medical licenses, including suspension and or revoked. The VA employs over 47,000 physicians in its health care system of 160 medical centers; in 1985, VA paid about 28,000 additional physicians to provide
Veterans cost care outside of the VA medical centers. Federal law requires that to be eligible for appointment in VA, a physician must be licensed in a state. VA policy indicates that all VA physicians must have licenses with no sanctions, each VA medical center has the ultimate responsibility for license verification. VA does not, however, require verification of cost care physician’s licenses which for what I see is a critical issue for the system because how can you hold some accountable for the care there are supposed to be providing if they are not certified. What does this say about the government a well and how the tax payers’ dollars are spent and lastly what about those that really need care and they may be seen by a doctor that does not have a clue or may make mistake critical in providing needed treatment. In 1984 a Congressional investigation determines that officials of the VA diverted or refused to spend more than $40 million dollars that Congress approved to aid Vietnam veterans with readjustment problems, the Washington Post reports at the time. Two years later President Ronald Reagan signs legislation elevating the Veterans Administration to Cabinet status, creating the Department of Veterans Affairs.

The article in the Chicago Tribune reports of poor medical care which contributed to or caused the deaths of six men at a North Chicago veteran’s hospital within one year period. An interview with the secretary of the Department of Veterans Affairs stated that mistakes were made and that basically the medical care was not what it was supposed to be. At the time the VA admitted having some responsibility in the deaths, a weeks earlier the department`s inspector-general accused the 1,004 bed Veterans Affairs Medical Center North Chicago, one of the largest VA facilities in the country-of questionable medical practices. Those included failing to diagnose problems, failing to treat problems quickly and doing unnecessary surgery, a report said. In response, VA headquarters said it was probing in more detail the cases of 15 patients who died at the North Chicago hospital between June 1989 and March 1990. A total of 120 patients died during that period (Millenson, 1991). President George W. Bush assigned a commission in 2003 that determined that 236,000 veterans were waiting six months or more for initial or follow-up visits, a clear indication, of a lack of sufficient capacity and lack of adequate resources to provide the required care. In 2005 an anonymous tip leads to significant problems with the quality of care for surgical patients at the VA's Salisbury, North Carolina, hospital, according to congressional testimony. One veteran who sought treatment for a toenail injury died of heart failure after doctors failed to take account of his enlarged heart, according to testimony. Sensitive records containing the names, Social Security numbers and birth dates of 26.5 million veterans were are stolen from the home of a VA employee who did not have authority to take the materials. VA officials think the incident was a random burglary and not a targeted theft 2006. Public outrage erupts after documents released to CNN show some senior VA officials received bonuses of up to $33,000 despite a backlog of hundreds of thousands of benefits cases and an internal review that found numerous problems, some of them critical, at VA facilities across the nation. This is one of the first known case dealing with paid bonuses 2007. The VA acknowledges that 0,000 veterans that underwent colonoscopies in Tennessee, Georgia and Florida were exposed to potential viral infections due to poorly disinfected equipment. 37 tested positive for two forms of hepatitis and 6 tested positive for HIV. VA Director Eric Shinseki initiates disciplinary actions and requires hospital directors to provide written verification of compliance with VA operating procedures. The head of the Miami VA hospital is removed 2009 (Pearson, 2014). In 2011 9 Ohio veterans tested positive for hepatitis after routine dental work at a VA clinic in Dayton, Ohio. A dentist at the VA medical center stated that he did not wash change gloves between patients for 18 years, also in 2013 William Montagu a former director of the Ohio’s Veterans Affair facility was indicted on charges that he accepted bribes and kickbacks to lure VA contracts to companies that conducted business with the Veteran’s Administration on a more national level nationwide. In Oakland, Pennsylvania in 2011 there was an outbreak of Legionnaires disease at the VA hospital where at least five veterans died of the disease. A newspaper reports in 2013 discovered that the VA records showed evidence of widespread contamination of the facility dating back to 2007. As stated in a CNN investigation report (Bronstein, Black, & Griffin, 2014) at least 19 veterans died at VA hospitals in 2010 and 2011 due to long wait times in diagnosis and treatment linked. The veterans were part of 82 vets who died or were dying or suffering from serious injuries as a result of delayed diagnosis or treatment for colonoscopies or endoscopies. An interview with Barry Coates a veteran who has suffered from a delay in care. Coates stated of having excruciating pain and rectal bleeding in 2011. For a year the Army veteran went to several VA clinics and hospitals in South Carolina, trying to get help. But the VA's diagnosis was hemorrhoids, and aside from simple pain medication he was told he might need a colonoscopy. He stated the problem was getting worst with increased pain and after being seen by doctors he noticed comments in his record stating he needed a colonoscopy. After pleading for over 6 months he was finally given an appointment many months away. He stated he personally contacted the department that scheduled the appointment and explain his situation and was told this was the earliest appointment that he could get. He told the lady what he had been through and the pain he had endured and her response was she understood but that she did not have any control over expediting the examine. After a year later he received his colonoscopy and doctors found a tumor the size of a baseball. Another report conducted by CNN on April 23, 2014 found that at least 40 veterans died while waiting for appointments to see a doctor at the Phoenix Veterans Affairs Health Care system as we all saw all over the news. Patients were tracked on a secret list which was kept to not disclose lengthy delays from VA officials in Washington, according to a recently retired VA doctor and several other officials. The scandal continues to unfold after VA employee was placed on administrative leave VA in Wyoming, after an email surfaces in which the employee had discussed manipulating the system’s waiting times. This came after a clerk in San Antonio was suspended a day earlier for admitting to a term known as cooking the books which is in writing making it appear that patient wait times were shorter that it really was. Three days later, two employees in Durham, North Carolina, are placed on leave over similar allegations. Another issue developed on May 19, 2014 were three supervisors at the Gainesville, Florida, VA hospital are placed on paid leave after investigators found a list of patients requiring follow-up care was kept on paper and not enter into the VA's computer scheduling system. The next day 26 other VA facilities were undergoing investigations for possibly committing offenses of doctored waiting times. The VA Secretary Eric Shinseki takes back the VA director of the Phoenix VA hospital Sharon Hellman’s $8,495 bonus she had received in April of
2014 and on May 30, 2014 Eric Shinseki resign his post as VA Secretary and was replaced temporarily by the Deputy VA Secretary Sloan Gibson. Here poses some very interesting questions as to why these recent sets of events were happening involving what is known as cooking the books. Has receiving bonuses became so important that senior leadership would pressure personnel to falsely documenting appointment waiting times for veteran? If the senior leadership was receiving the bonuses what where the employee promised or told for conducting such a violation if ethics. Here we have to wonder if we do not pressure people to committed offenses to meets certain criteria. I honestly believe that this scandal won't go away as others have in the past, because these recent events has everyone united and willing to stand behind military veterans and a lot of politicians seek there chance for reelection going down the tubes if they don’t ensure the problem is corrected. From my point of view the system will continue to have flaws as I have written about throughout the history of the Veterans Administration, although the President just signed into law The Veteran’s Health Care Reform Bill and we have a new VA Secretary over Veteran’s Affairs Robert McDonald. The bill is supposed to implement changes which would allow veterans that live certain distances 40 miles from VA facilitates to be able to seeks health care at more convenient locations, it also got rid of bonus payment to high level officials and also give the Secretary the power to fire senior executives deemed incompetent and also provides the opportunity for the VA to hire more doctors and nurses. Many people are happy for the changes but myself a Disabled Veteran remain hopeful that these changes will make corrections to the VA Health care System because I have witness many Vet that have been traumatically injured serving their country and should be given the upmost care.
References
Associated Press. (2006, May 22). Social Security Numbers for Millions of Veterans Stolen From V.A. Officials Home. (A. Press, Ed.) Foxnews. Retrieved August 01, 2014, from http://www.foxnews.com/story/2006/05/22/social-security-numbers-for-millions-veterans-stolen-from-va-official-home/
Binh, P. (2007, November - December). Disposable heroes. International Socialist Review(55). Retrieved July 30, 2014, from http://www.isreview.org/issues/55/veterans.shtml
Bronstein, S., Black, N., & Griffin, D. (2014, January 30). Veterans dying becuase of health care delays. CNN Health. Retrieved August 06, 2014, from http://www.cnn.com/2014/01/30/health/veterans-dying-health-care-delays/
Dean , J. W. (2011, Novemeber 02). Harding and Corruption in Veterans Affairs. Command Post. Retrieved July 27, 2014, from http://www.commandposts.com/2011/11/harding-and-corruption-in-veterans-affairs/
Egelhoff, T. (2014, July 03). The Checkerd Past of the Veterans's Adminstration. KMMS. Retrieved July 28, 2014, from http://kmmsam.com/the-checkered-past-of-the-veterans-administration/
Lederle, J. W. (1949). The Hoover Commission Reports On Federal Reorganization. Marquette Law Review, 33(2). Retrieved July 28, 2014
Lee, M. Y. (2014, July 02). Why was the VA created 100 years ago, anyway. The Republic azcentral. Retrieved July 27, 2014, from http://www.azcentral.com/story/news/arizona/investigations/2014/07/02/year-old-agency-struggles-reinvent/11958561/
Meyer, D. (2014, June 9). Veterans Affairs scandal are as old as the agency. The Denver Channel. Retrieved August 01, 2014, from http://www.thedenverchannel.com/-/veterans-affairs-scandals-are-as-old-as-the-agency
Meyer, D. (2014, June 09). Veterans Affairs scandal are as old as the agnecy. newsnet5. Retrieved July 28, 2014, from http://www.newsnet5.com/decodedc/veterans-affairs-scandals-are-as-old-as-the-agency
Millenson, M. L. (1991, April 05). Va Links 6 Deaths To Poor Care. Chicago Tribune. Retrieved July 31, 2014, from http://articles.chicagotribune.com/1991-04-05/news/9101310418_1_poor-care-veterans-hospital-va-secretary-edward-derwinski
Pearson, M. (2014, May 30). The VA's troubled history. CNN Politics. Retrieved July 27, 2014, from http://www.cnn.com/2014/05/23/politics/va-scandals-timeline/
VA History In Brief. (n.d.). Department of Veterans Affairs. Retrieved July 27 , 2014, from VA.gov
Veterans Administration Indentifying Physicans with License Sanctions An Incomplete Process. (1988, May ). United States General Accounting Officer, 34. Retrieved July 31, 2014, from www.gao.gov/assets/150/146427.pdf
Woolley, J., & Peters, G. (1930, July 21). Herbert Hoover: Executive Order 5398 - Establishing the Veteran's Administration. The American Presidency Project, 75311. Retrieved July 27, 2014, from http://www.presidency.ucsb.edu/ws/?pid=75311