Colorado Politics

Yes, the FBI is now investigating the Aurora VA hospital

The Federal Bureau of Investigation is reviewing allegations that Veterans Affairs Department officials lied to Congress to cover up huge cost overruns at a hospital being built in Aurora.

The Justice Department revealed the FBI investigation in a Dec. 9 letter to Congress that was made public a week later.

The projected cost of the hospital has nearly tripled over the original price estimate the VA reported to Congress in 2014.

VA officials said they already are aware of earlier mistakes and have resolved them.

However, some members of the Colorado delegation to Congress are unconvinced VA officials should be allowed to escape the wrath of lawmakers.

Rep. Mike Coffman, R-Aurora, was one of the first congressmen to call for a criminal investigation of VA officials.

Following a report in September by the Veterans Affairs Office of the Inspector General that said VA officials apparently falsified part of their testimony to Congress in 2013 and 2014, Coffman called for Justice Department intervention. The FBI is an investigative branch of the Justice Department.

He wrote a letter to the inspector general saying, “After reviewing the report, I was particularly struck by your office’s conclusions concerning the congressional testimony of former VA executive Glenn Haggstrom. After recounting numerous internal warnings Haggstrom received about the cost-escalation in Aurora, as well as Haggstrom’s testimony before Congress in May 2013 and April 2014, [the inspector general’s report] generously concluded Haggstrom ‘did not share [the] information with Congress.’ A less generous assessment is that Haggstrom intentionally misled Congress – he lied.”

Haggstrom, who oversaw the VA’s construction projects, told the Veterans Affairs Committee the Aurora hospital would be completed near its budgeted cost of $604 million with no cost overruns.

The hospital construction is projected to cost $1.7 billion before it is completed around January 2018, or about 20 years after the VA identified the need for a new hospital in Colorado.

The inspector general’s report blamed mismanagement and poor oversight by the VA.

After the FBI announced its investigation, Coffman issued another statement saying, “Cost overruns at the VA hospital that are nearly three times the original estimated cost is an outrage but what’s most troubling is the misleading information the VA has provided Congress concerning this construction project.”

He is a member of the House Veterans Affairs Committee and the Armed Services Committee.

Stella Fiotes, director of the VA’s Office of Construction and Facilities Management, testified to Congress with Haggstrom on the hospital budget.

Veterans Affairs Committee chairman Jeff Miller, R-Fla., said the Justice Department should investigate both Haggstrom and Fiotes.

“This case is a slam dunk and it’s imperative for Department of Justice officials to ensure justice is served,” Miller said in a statement. “It is an absolute fact that numerous VA officials repeatedly misled Congress regarding cost overruns,” he said.

Haggstrom retired last year one day after VA officials questioned him about the escalating Aurora hospital costs.

The new hospital is designed to replace an older, overcrowded 184-bed hospital in Denver.

The FBI’s announcement that its Washington field office was investigating the new hospital project was a response to a letter to the Justice Department by 21 lawmakers in September.

“The information provided in the letter from the Committee on Veterans’ Affairs has been reviewed by the FBI’s public corruption unit … where it (is) under review to determine if any action is deemed necessary,” says the letter signed by Assistant Attorney General Peter J. Kadzik.

Both of Colorado’s U.S. senators have urged a get-tough attitude toward the VA by Congress.

Republican U.S. Sen. Cory Gardner who helped author legislation that secured funding for the Aurora VA hospital, said, “Now that the OIG investigation is complete, the VA officials responsible for the blatant systemic failures and enormous cost overruns that plagued the project must be held accountable. No more get out of jail free cards.”

Democratic Sen. Michael Bennet said, “We have already stripped the VA of its authority to manage the construction of major medical facilities, and we will continue to scrutinize the agency’s future projects.”

The inspector general report that led to the FBI investigation said the joint venture architectural firm used a contentious design that stressed aesthetics over function. They described it as looking more like a shopping mall with a 1,100-foot concourse than a hospital.

The VA was warned by one of its consultants, Jacobs Engineering Group, in 2011 about the potential for cost overruns with the novel design but ignored the warnings, the inspector general’s report said.

Jacobs Engineering suggested a design similar to the VA hospital in North Las Vegas. The 1.3-million square foot facility that used a more traditional design with attached buildings cost $620 million.

The Aurora hospital will be about 1.2-million square feet.

The inspector general said, “However, the Las Vegas facility cost significantly less than the Denver facility, in part, due to the simpler design.”


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