VA scandal whistleblowers receive settlement for unfair treatment

The Veterans Affairs (VA) Department announced Monday it settled the complaints of three employees who faced retaliation after filing whistleblower complaints about the Phoenix VA hospital--revelations that led to a nationwide scandal that involved secret waitlists to cover up treatment delays and possible patient deaths.

Although the financial terms of the settlement are confidential, the U.S. Office of Special Counsel (OSC) said in a separate announcement that the three employees received "fair and full relief."

Katherine Mitchell, M.D., who blew the whistle on critical understaffing and inadequate triage training in the Phoenix VA Medical Center's emergency room and has testified twice before Congress in recent months, will take on a new position at the VA to oversee the quality of patient care. After she made the complaint, she said VA leaders conducted targeted retaliation that included ending her assignment as ER director.

Mitchell told ABC News she was relieved by the settlement, but hopes the VA will take action against senior officials who stripped her of her $137,000-a-year job and put her on administrative leave in September 2012, after she complained about the problems at the hospital.

Paula Pedene, the former spokeswoman for the VA who was stripped of her title and banished to the basement after disclosing the financial mismanagement by former administrators, will take on a national program specialist position in the Veterans Health Administration, Office of Communications. Although a November 2011 VA Office of Inspector General review validated Pedene's allegations, the OSC said the Phoenix VA administrators improperly investigated her on unsubstantiated charges, removed her from her position and moved her office to the basement library.

Pedene told ABC News her experience was "a horrible way to live" and she was "humiliated every day." Although she is looking forward to her new role, she told the publication, "I feel saddened I am not going to be able to do my public affairs role as I have done in Phoenix for the past 20 years."

The third employee, Damian Reese, serves as a Phoenix VA program analyst. Reese was among the first to voice concerns about the amount of time veterans had to wait for primary care appointments and management's manipulation of patient records to cover up the long wait times. In retaliation, a senior official with knowledge of Reese's complaints gave him a negative performance review.

The OSC said in the announcement that it continues to investigate more than 125 complaints of retaliation at the VA for blowing the whistle on improper patient  scheduling, understaffing of medical facilities, and other dangers to patient health and safety at VA facilities around the country. Meanwhile, it currently has 89 pending whistleblower disclosures from VA employees who allege threats to patient health or safety and has referred 51 of these cases to the VA fo investigation.

"Dr. Mitchell, Ms. Pedene, and Mr. Reese followed their consciences and reported wrongdoing, and their efforts have improved care and accountability at the VA," said Special Counsel Carolyn Lerner in the announcement. "I applaud the VA's leadership for taking actions to quickly resolve these cases and concrete steps to change the VA's culture. The settlements allow these courageous employees to return to successful careers at the VA. VA leadership is sending a clear message: whistleblowing should be encouraged, not punished."

In the VA announcement, Secretary of Veterans Affairs Robert McDonald said the department takes whistleblower complaints seriously and "will not tolerate retaliation against those who raise issues which may enable VA to better serve veterans."

To learn more:
- here's the VA announcement
- read the OSC statement (.pdf)
- check out the ABC News coverage