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The U.S. Department of Veterans Affairs on Wednesday dropped a controversial plan to suspend an ethics law that prevents its employees from receiving pay or other benefits from for-profit institutions, The Associated Press reported.

A recent inspector general report had found that two VA employees had violated the rule by working as adjunct instructors at for-profit colleges that receive federal veterans' benefits. In September the agency said it would grant a waiver exempting all VA employees from the rule, calling it unfair and outdated, as long as employees follow certain federal requirements on conflicts of interest.

Ethics experts, Senate Democrats and major veterans groups criticized the move, with some saying the VA should issue waivers on a case-by-case basis, where warranted, instead of a blanket waiver.

“It’s highly questionable,” Richard Painter, the chief White House ethics lawyer for George W. Bush, told the AP. “The VA has a great big pot of money and every educational institution wants a piece of the action. And there’s no doubt for-profit colleges have a lot of influence in this administration.”

The VA told the wire service that it decided to delay action on the rule after receiving "constructive comments" about the plan.