Washington (CNN)Veterans Affairs Secretary David Shulkin's chief of staff is stepping down, the latest fallout from an inspector general investigation that said she doctored an email and misled ethics officials, which led the department to pay for the secretary's wife to join him on a taxpayer-paid trip to Europe in 2017, the agency confirmed Friday.
Embattled VA secretary's staffer leaves in wake of watchdog report
Vivieca Wright Simpson, a 32-year veteran of the VA, was the agency's third highest-ranking employee and the first employee to leave the department amid scrutiny of Shulkin's travel practices.
VA spokesman Curt Cashour confirmed Wright Simpson's departure, which was first reported by USA Today, and later Friday announced that Peter O'Rourke would replace Wright Simpson as chief of staff, effective immediately. O'Rourke currently serves as executive director for the VA's Office of Accountability and Whistleblower Protection.
Cashour also said the agency had opened a formal investigation into Wright Simpson's conduct.
"President Trump has made clear that he expects VA leaders to hold themselves and other employees accountable when they fail to live up to the high standards taxpayers and Veterans deserve," Cashour said in a statement.
Shulkin met Thursday with White House chief of staff John Kelly, according to a White House official familiar with the situation, who said Friday that Shulkin was not fired.
Shulkin told CNN on Friday that he had not been asked for his resignation, did not offer it and had no plans to leave his job.
He has acknowledged that the "optics of this are not good" but maintains that he did nothing improper. He has said he regrets distracting from his agency's mission.
Trump is upset with Shulkin, the official said. But the President has previously highly regarded Shulkin, publicly praising his secretary's efforts to turn around the troubled Department of Veterans Affairs.
Details of the meeting and Trump's frustration were first reported by The Washington Post.
An investigation by VA Inspector General Michael Missal found "serious derelictions" by Shulkin and members of his staff during a July 2017 trip to England and Denmark, including that Shulkin's chief of staff altered an email and made false statements that led the department to pay more than $4,000 for Shulkin's wife, Merle Bari, to travel to Europe with her husband.
Some in the White House felt as though Shulkin hadn't given them a realistic view of the report, the White House official said.
Shulkin has said he will comply with all the department watchdog's recommendations, and his lawyers told CNN that he has repaid the US Treasury for his wife's travel. Wright Simpson has denied doctoring official emails and Shulkin has called for an investigation into whether her email account had been hacked or if someone other than her was sending emails from her account.
On Thursday, Rep. Tim Walz, the top Democrat on the House Veterans' Affairs Committee, called on Attorney General Jeff Sessions to investigate that claim.
Shulkin told Politico on Wednesday that he and the President spoke about the findings of the VA inspector general report last week when he received the draft, and he said the President had been supportive of him remaining in the job.
The uncertainty surrounding Shulkin's standing comes as the VA is focused on overhauling its troubled health care system. The department is currently spending billions of dollars for America's veterans to be treated outside the VA's health care system.
Partisan political appointees within the Trump administration have been working for months to subvert Shulkin, Republican and Democratic congressional sources tell CNN.
Much of Shulkin's friction with the White House, these sources say, is over the fact that Shulkin opposes privatizing veterans health care, something that has historically been opposed by veterans' groups.
The VA runs its own health care system, serving roughly 9 million veterans. But some conservatives favor moving away from that system of hospitals and clinics across the country and instead turning over sweeping parts of veterans health care to private doctors.
During his confirmation hearing, Shulkin said the VA "will not be privatized under my watch."
Shulkin is not the first current or former Trump Cabinet official to be dogged for their travel practices. He is one of five top Trump officials to face investigation for his travel practices, including former HHS Secretary Tom Price, who resigned last year amid scrutiny of his use of chartered flights for official business.
Criticism of Shulkin during a House Veterans' Affairs Committee hearing on Thursday was muted, though both Chairman Phil Roe, R-Tennessee, and Walz, the panel's top Democrat, expressed concern about the report's findings.
One lawmaker, Rep. Mike Coffman, a Colorado Republican, has called on Shulkin to resign. After Shulkin said Thursday that the "optics" of his European trip were "not good," Coffman replied: "It's not the optics that are not good. It's the facts that are not good."