U.S. Attorney General’s Office declines to prosecute potential fraud with bidding for Wilmington VA Clinic

U.S. Attorney General’s Office declines to prosecute potential fraud with bidding for Wilmington VA Clinic

WILMINGTON, N.C. (WECT) - The U.S. Attorney General’s Office has declined to prosecute a case of potential fraud surrounding the Wilmington VA Clinic. WECT first broke the story in 2015 about the high price the VA was paying to lease the land at the airport for the clinic, and the nearly $300,000 a month more to lease the building.

At the time, the VA was locked into a 20-year lease with a private Wisconsin-based company that owned the Wilmington facility. Rent payments over the life of the lease totaled more than $68 million. Commercial real estate brokers said the rate the VA was paying for the clinic was about twice the going rate for prime medical office space in Wilmington.

The late Congressman Walter Jones pushed for an investigation into the potential waste of taxpayer money. The VA Inspector General (IG) launched an investigation, and in 2018 found the VA had overpaid the airport Authority by millions of dollars to lease the land for the clinic.

The IG had additional concerns about the separate bidding process to build and lease the clinic itself. The VA’s Office of Construction and Facilities Management (CFM) claimed they got 14 competing offers to build the clinic, but they were only able to produce two of those offers for investigators, despite federal requirements to keep that paperwork.

The Inspector General’s Office requested copies of the bids eight different times over the course of their investigation and never got them, which made it impossible to determine if the VA chose the bid that was in the tax payers best interest.

“CFM’s inability to provide the [Office of Inspector General’s] requested documentation represents a potential risk of fraud. Therefore, the OIG’s Office of Audits and Evaluations referred this lease to the OIG’s Office of Investigations for review,” the OIG wrote in their 2018 report.

The Office of Investigations completed that review and gave its findings to the US Attorney General’s Office, which declined to prosecute based on the available information. The case was officially closed in April 2020.

WECT submitted a Freedom of Information Act request for the document the Attorney General’s Office relied on to make that determination. In response, they provided a heavily redacted “Comprehensive Report of Investigation.” The only meaningful thing WECT could determine from the small portion that was not redacted is that the prosecutor “declined this case due to a lack of evidence that a criminal violation occurred.”

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