VA will work to recover improper payments if fraud confirmed

Ongoing investigation into lease agreement for Wilmington VA Clinic

VA will work to recover improper payments if fraud confirmed
VA Inspector General's report indicates potential fraud in how contract was awarded for Wilmington VA Clinic. (Source: Ryan Koresko)

WILMINGTON, NC (WECT) - In the weeks before he was taken into hospice care, Congressman Walter Jones continued to fight for Wilmington veterans and taxpayers. For more than two years, Jones has been searching for answers about questionable lease payments Veterans Affairs is making to a private landlord in Wisconsin for the Wilmington VA Clinic. Recently released correspondence indicates the VA will work to recover improper payments if suspicions of potential fraud are confirmed.

WECT first uncovered the unusually high rental rate during a series of investigative reports in 2015. We learned the VA was paying nearly $300,000 a month to rent the 80,000 square foot VA clinic from a private Wisconsin-based company. Commercial real estate brokers told us that was about twice the going rate for prime medical office space in Wilmington.

WECT then uncovered the VA was locked into a 20-year lease, and would pay more than $68 million to use the facility on the grounds of the Wilmington airport property over the life of that lease.

Jones saw our reports and took an immediate interest in what appeared to be a significant waste of taxpayer money. He called for the VA Inspector General (IG) to investigate.

After a two year probe, the IG released their findings, reporting that the VA overpaid by millions to lease the land underneath the clinic from the Airport Authority, based on the fair market value of the land at the time the deal was made. The VA is paying separately for use of the building, and the Inspector also found that there was potential fraud in the way the VA awarded the contract. The IG called for a criminal investigation into how the contract was awarded.

“There are too many questions that need to be answered,” Jones told WECT in October. “That’s why I want the Secretary of the VA, Robert Wilkie, to take a personal interest in this situation.”

“It’s over $2 million in 20 years, and the impropriety of the contract...what we’re trying to do is find out where the skeletons are in this agreement,” Jones added of the ongoing investigation into the lease agreement for the clinic.

In December, Jones’ office reached out to WECT to share the latest development in the case, a letter from Secretary Wilkie to Congressman Jones. It reads in part:

“We share your concerns and those expressed by VA’s Office of Inspector General (OIG) in its recent report… [I]f OIG finds the lease procurement was awarded based on fraud or malfeasance, VA will act swiftly to recover any improper payments.”

WECT is trying to learn when the OIG’s criminal investigation is likely to conclude, and we will update you as soon as we have that information.

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