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FBI investigating Veterans Affairs office in Arizona

By Julia Edwards and David Lawder

WASHINGTON (Reuters) - The Federal Bureau of Investigation is probing allegations of criminal wrongdoing at the Phoenix office of the Department of Veterans Affairs (VA), which has been central to a scandal over veterans' healthcare that has rocked the Obama administration.

"The FBI has instructed agents in its Phoenix office to conduct an investigation into the allegations related to the VA," a Justice Department spokesman said on Wednesday. "Federal prosecutors will be working with these investigators to determine whether there is a basis for criminal charges."

FBI involvement escalates the inquiries into the debacle that led to the resignation on May 30 of Secretary of Veterans Affairs Eric Shinseki, a retired Army general wounded three times in Vietnam.

On Monday, the VA released the results of an internal audit that found more than 100,000 veterans had been subjected to a wait of 90 days or more for appointments at medical facilities nationwide. There have been allegations that some veterans died waiting for appointments.

The VA said it found that in mid-May, 57,436 veterans were waiting for appointments that could not be scheduled within 90 days, while about 43,000 had appointments more than 90 days in the future.

The audit showed that the cover-up of long wait times at VA clinics was more extensive than initially thought, and it found widespread instances of schemes to cover up the delays to meet targets for bonuses.

The agency said staff at 76 percent of the facilities surveyed reported that they had been instructed at least once to misrepresent appointment data. The issue has dogged the White House in recent weeks and embarrassed Obama, who came into office promising to elevate care for U.S. veterans.

Since the crisis erupted, Obama has tasked his deputy chief of staff with helping to sort out the problems at the VA and named an acting secretary, Sloan Gibson, to take over for Shinseki.

The VA report made no mention of whether long wait times had resulted in any deaths of veterans. Doctors at VA clinics in Phoenix have alleged that some 40 veterans died while waiting for care.

Also on Wednesday, the U.S. Senate overwhelmingly passed a bipartisan measure aimed at easing healthcare delays for veterans by giving them more access to private care and allowing the Department of Veterans Affairs to open more clinics and hire more medical staff.

The 93-3 vote in the Democratic-led Senate followed unanimous passage on Tuesday in the Republican-controlled House of Representatives of a similar bill.

Lawmakers must now iron out differences between the House and Senate versions before voting on a final package that could be signed into law by President Barack Obama.

(Additional reporting by Will Dunham; Writing by Jeff Mason; Editing by Toni Reinhold)

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