April 26, 2006
Jemarion Jones
(202) 639-6405

AFGE Decries Dept. of Veterans Affairs Decision to Award Lucrative Contracts

Washington—The American Federation of Government Employees (AFGE) today expressed outrage in reaction to news that a company headed by former Department of Veterans Affairs (VA) Secretary Anthony Principi could receive fees in excess of $1 billion, mostly from contracts approved and amended while he was head of the agency.

“This is a conflict of interest in the most extreme form. The fact that Principi’s company may enrich itself to such an extent by doing work that could be performed at a much lower cost by VA employees shows that cronyism is alive and well in this administration,” said AFGE National President John Gage. “What’s even more outrageous is the fact that Principi is raking in profits on the backs of men and women who have sacrificed to protect this country.”

Principi’s company, QTC Management, administers medical exams to veterans who need disability assistance. Additionally, the firm also examines soldiers before they are discharged, the results of which play a substantial role in VA disability benefit decisions. Principi was president of QTC before heading the VA from 2001 to 2005. After leaving the VA, Principi returned to the company as chairman of the board.

“Instead of performing medical exams in-house or awarding the contracts for these services through a fair bidding process to a company that would provide good service at fair prices, the contracts went to a company headed by a political appointee intent on privatizing VA services and profiting at the expense of disabled veterans,” said Gage. “That’s flat wrong and should definitely raise red flags with members of Congress.”

Gage added, “The VA should stop wasting scarce health care dollars and jeopardizing the well-being of our veterans by contracting out medical services and disability exams that could be provided far more effectively by its own employees. This administration is not above cheating veterans out of the health care they were promised. They did it before when they failed to adequately plan for an influx of new veterans. What’s to stop them from doing it again?”

In 2005, the VA admitted to a health care funding shortfall of more than $1.2 billion. Veterans continue to be turned away or placed on horrendously long waiting lists for medical care this year. Despite an influx of new veterans and an increasing aging veterans population, the administration still wants to cut the veterans’ health care budget by an additional 13 percent—or $10.3 billion—by 2011.

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