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Witness Testimony of Lauren Kologe, Deputy Director of Veterans Benefits Program, Vietnam Veterans of America

Good morning, Mr. Chairman and other distinguished members of the subcommittee.  Vietnam Veterans of America (VVA) is pleased to have the opportunity to appear here today to share our concerns and thoughts regarding the pending legislation.  In particular, we would like to share our views on H.R. 5948 the Veterans Fiduciary Reform Act of 2012 and how the Veterans Benefits Administration (VBA) can improve their Fiduciary program. 

H.R. 2985, Veteran’s ID Card Act,introduced by Representative Todd Akin [R-MO], provides for VA to issue, upon request, a Veteran’s ID card for certain Veterans who do not already qualify for a VA ID card.  Veterans who are not enrolled in VA healthcare will be able to obtain a Veteran’s ID Card for a fee.

VVA supports this bill, as “goods, services, and promotional activities are often offered by public and private institutions to veterans who demonstrate proof of service in the military but it is impractical for a veteran to always carry official DD-214 discharge papers to demonstrate such proof.”  We strongly suggest that the application process for this ID card contain written information and/or verbal advisement on enrollment in VA health care, including the toll-free number for VA health care enrollment.  This would allow a Veteran who is otherwise eligible for a free ID card and VA health care to more easily receive that benefit. 

H.R.3730,  Veterans Data Breach Timely Notification Act, introduced by Representative Joe Donnelly [D-IN], requires the Department of Veterans Affairs to notify individuals whose personal information has been involved in a data breach, as well as notifying the general public and the appropriate Committees of Congress.

VVA supports this bill.  Although we are not information technology experts, we ask the subcommittee to consider a provision which would require much faster notification when deposit or bank account information is breached.   It takes significantly less time than 5 or 10 business days for experienced criminals to wipe out a Veteran’s or dependent’s entire savings. 

H.R. 4481, Veterans Affairs Employee Accountability Act, introduced by Representative Phil Roe [R-TN],  makes employees of the Department of Veterans Affairs ineligible for bonus compensation when they knowingly violate any civil law covered by the Federal Acquisition Regulation issued under section 1301(a)(1) of title 41 or the Veterans Affairs Acquisition Regulation.

VVA favors this bill, provided that two changes are made. 

First, we urge the subcommittee to remove the “knowingly” element.  We believe the incentives must be changed for those in management and leadership capacities in the Department of Veterans Affairs.  As this bill only provides that those who violate provisions of the acquisition act not receive bonuses, which are above and beyond their normal financial compensation, we believe that any employeewho violates these provisions be ineligible to receive a bonus.  This will eliminate any insulation of employees or “passing the buck”. 

Second, we propose that “for or during that year” be changed to “for or during that year or the following fiscal year”.  Because of the length of time of investigations and reporting requirements, we believe this would further dissuade violation of the Acquisition Regulations. 

We urge for immediate passage of a bill with this revised language, before the calculation of fiscal year 2012 bonuses.

H.R. 5948, Veteran’s Fiduciary Reform Act of 2012, introduced by Representative Bill Johnson [R-OH], provides additional enhanced background checks for fiduciaries managing veterans’ funds, further limits the fees VA may pay fiduciaries, authorizes state agencies to be fiduciaries, allows pre-designation of a preferred fiduciary, and requires VA to prepare an annual report to Congress on the fiduciary program separate from the VBA annual report.    

VVA strongly favors this bill, providing Congressional guidance for the Department of Veterans Affairs in reforming the fiduciary program, and also suggests changes to make it stronger and requiring less interpretation. We applaud the legislation’s sponsors in their courage to provide a clear reporting requirement for abuses of the system including misfeasance and malfeasance.  The administration of the fiduciary program has been at cross-purposes with its intent, due to lack of prioritization and allocation of resources, lack of leadership at all levels, and confusion about the role of the fiduciary program.  

We enthusiastically support the bill’s provisions for background checks of fiduciaries, enhanced reporting requirements to Congress, pre-selection of fiduciaries, and return of monies to the Veteran in cases of misfeasance.  We offer today some concrete suggestions in marking up this bill, and in subsequent regulatory proceedings, to strengthen this legislation and make VA’s fiduciary program truly serve the Veterans it is meant to protect.

We recommend the following additions or changes to the legislation:

1)     We propose that the title of Section 5511 “Adjudication of financial incompetence” and the language “mentally incapacitated or deemed mentally incompetent” be changed to reflect the purpose of the fiduciary program.  We would propose language substantially similar to “Adjudication of financial incapacity” and “financially incapacitated or deemed unable to manage financial affairs”.  Current 38 U.S.C. § 5501 allows the VA to commit mentally incompetent veterans to a Department hospital or domiciliary.  Although mental competency, for VA benefits purposes, refers only to the ability of the veteran to manage VA benefit payments in his or her own interest, this is not how a veteran sees a “rating of incompetency”.  Furthermore, the words mentally incompetent mean much more outside the VA setting.  This term is not only stigmatizing, it can lead to a veteran’s rights being taken away.  For this reason, we believe financial incapacity is a clearer and more effective designation for individuals needing a fiduciary. 

2)     We recognize that many veterans and other beneficiaries in the fiduciary program require support services other than just managing benefits payments.  Therefore, we urge a change to the examination protocol for determining that an individual is unable to manage his or her benefit payment.  Currently, VA only assesses veterans’ ability to manage their benefit payments in certain disability exams.  Furthermore, these compensation or pension exams frequently last only 20 to 30 minutes.  It is unclear how VA is able to determine the capacity of a veteran without protocol for certain questions to be asked of the veteran, which are consistent across the board.  It is also unclear how VA assesses a widow’s or dependent’s ability to manage benefit payments. 

We propose that two determinations be made: one for financial capacity and one for any requirement of guardianship or incapacity for self-care.  The fiduciary program is failing to monitor the well-being of the veterans in its care.  Many of these veterans require additional services that fiduciaries are not trained to do and are not paid to do.  A question for the subcommittee and the new administrator of VA’s fiduciary program is what is the effect of 38 U.S.C. §§ 5502(d)-(e) on the administration of payments to beneficiaries in the fiduciary program?  38 U.S.C. §§ 5502(d)-(e) provide for escheat to the United States that money which is left unpaid to a beneficiary in the fiduciary program, when there are no survivors that may traditionally make a claim for accrued benefits.  We have heard and have personally handled several claims where monies were withheld for no apparent reason.  There is some type of incentive, either perceived or concrete, to build up the trust without making distributions that would improve the veteran’s or beneficiary’s quality of life.  We urge legislation, regulation and culture change to combat the tendency to become overly paternalistic in the administration of VA benefits.  We also advise the use of pre-paid and automated billing, home delivery services, and other programs that would ensure those in the fiduciary program have proper shelter, food, utilities, and other needs covered.

3)     Section 5507 describes qualifications for fiduciaries.  The proposed bill states that the Secretary shall request information concerning whether that person has been convicted of any offense under Federal or State law (and if the answer is yes, the person is subject to increased scrutiny).  We appreciate keeping criminals away from our most vulnerable veterans and dependents.   However, this language seems to also exclude those convicted of minor offenses including non-moving violations of traffic laws and other on-the-books laws.  While the current law is under-inclusive, the proposed language is overly restrictive.  We would like Congress to consider exceptions for minor violations. 

4)     We very much like the section in the proposed legislation that requires re-certification/background checks each time a fiduciary is appointed.  However, as the bill adds state agencies as "persons", there should be clarification on how the background checks will be done for a state agency.  Will one person from the agency be assigned as a fiduciary for each veteran, or will the agency as a whole function as a fiduciary?   This would impact the scope of background checks.

5)     We exhort the subcommittee to provide a whistleblower provision or a more definite reporting system for abuses in the fiduciary program.  A clear chain of command and expectations goes a long way toward reporting and fixing problems before they get worse.  There should at least be a requirement in the law for the Secretary to report on the steps VA employees, beneficiaries, and third parties can take to report malfeasance and misfeasance, so that the officials most able to fix the system can make the necessary changes.  

Thank you for this opportunity to present our views here today. I will be happy to answer any questions.


VIETNAM VETERANS OF AMERICA

Funding Statement

June 20, 2012

          The national organization Vietnam Veterans of America (VVA) is a non-profit veterans' membership organization registered as a 501(c) (19) with the Internal Revenue Service.  VVA is also appropriately registered with the Secretary of the Senate and the Clerk of the House of Representatives in compliance with the Lobbying Disclosure Act of 1995.

          VVA is not currently in receipt of any federal grant or contract, other than the routine allocation of office space and associated resources in VA Regional Offices for outreach and direct services through its Veterans Benefits Program (Service Representatives).  This is also true of the previous two fiscal years.

For Further Information, Contact:

          Executive Director of Policy and Government Affairs

          Vietnam Veterans of America

          (301) 585-4000, extension 127

Lauren Kologe, Esq., is Deputy Director of the Veterans Benefits Program on the National Staff of Vietnam Veterans of America.  She has worked for VVA since 2008, representing veterans in claims before the Veterans Benefits Administration and the Board of Veterans Appeals.  She is responsible for training and supervision of service officers and appellate attorneys for Vietnam Veterans of America.  She also monitors agency policy and rule-making on veterans benefits related issues.

Ms. Kologe is a graduate of American University’s Washington College of Law (J.D. 2007) and the Pennsylvania State University (B.S. 2004).  She is licensed to practice law in the State of Maryland and before the United States Court of Appeals for Veterans Claims.  Although not a veteran herself, her father served honorably in the U.S. Army in Germany, and extended family members served in World War II (Pacific Theater), the Korean Conflict, and in the Persian Gulf.