The Pentagon said Wednesday that it expects to permanently stop collection procedures for the vast majority of National Guard soldiers who, according to various audits, got bonuses they weren’t technically entitled to between 2004 and 2011.
An estimated 17,000 guardsmen received the enlistment bonuses of up to $15,000 during the height of the wars in Iraq and Afghanistan, only to be told several years later that they would have to repay them.
Based on the early stages of a review Defense Secretary Ash Carter ordered in October, the Defense Department has set criteria that’s likely to result in DoD waiving its right to recoup the bonuses in all but 1,000 to 2,000 of those cases, since most of the soldiers who received the payments applied for and received them in good faith, said Peter Levine, the acting undersecretary of Defense for personnel and readiness.
“The cases we’ve read about in the press are particularly troublesome,” he told the House Armed Services Committee. “Many of them are based on technicalities like missing paperwork, or the soldier was misled about things like whether they needed a high school diploma. In those cases — where soldiers have already served their commitment and we came in later and asked why they received the bonus — that’s a particular hardship. But there are also a significant number of cases where people didn’t serve out their commitments and got the bonuses anyway. As a basic matter of fairness, we need to take a closer look at those.”
The majority of the cases, about 14,000 out of the 17,000, originated with the California National Guard, where auditors first discovered the improper payments issue in 2011. The scope of the problem current and former soldiers face was first brought to light by the Los Angeles Times.
Most of the errors stemmed from shoddy and understaffed administrative procedures. For example, a single state employee was placed in charge of managing the tens of thousands of applications the California Guard receives for incentive programs each year, officials testified Wednesday. But at least some of the issues were the result of out-and-out fraud. Overall, California believes its federally-funded bonus program had a 91 percent error rate in 2011.
“We found there was a complete lack of internal controls,” said Maj. Gen. David Baldwin, the California Guard’s current adjutant general who was recalled from Afghanistan to take charge of the state’s military department after his predecessor was reprimanded and fired over the bonus scandal in 2011.
“We instituted an internal control system to keep these problems from happening again, including firing four general officers and two colonels,” he said.
The Justice Department brought successful prosecutions against 26 California guardsmen for fraud; another 15 cases are pending. The California Guard attempted courts-martial for another seven soldiers who DoJ declined to charge, but a military judge dismissed those cases for lack of evidence.
In the cases where fraud was involved, Guard officials say recruiters colluded with service members to apply for bonus payments they weren’t entitled to in exchange for a share of the bonus payments.
Baldwin said the kickbacks don’t appear to have been part of any centrally coordinated scheme; they were allowed to happen in every corner of the state because of almost non-existent oversight by California Guard officials.
But Levine acknowledged Wednesday that DoD’s own controls also failed to detect the improper payments.
“We have oversight over the California National Guard, the Army has oversight, the National Guard Bureau has oversight. We were not aware of this until we read about it in the newspaper, and that’s on us. We missed this,” he said. “But the secretary specifically directed me to go in and fix this and to get it done by next summer.”
In the annual Defense authorization bill that’s expected to head to the President’s desk soon, lawmakers added a provision telling DoD to convene a review board to determine, in each of the 17,000 cases, whether the bonus payments were warranted in the first place and, if so, to stop any attempt to claw them back.
Levine said the department has already begun its own process to screen out the vast majority of them. The Pentagon expects to forgive most cases involving bonuses of $10,000 or less, or ones in which the payments were made more than 10 years ago.
It will also stop recoupment cases involving soldiers who had no prior military experience, reasoning that most of those recruits were unfamiliar with the nuances of military compensation, only wanted to serve their country and weren’t in a good position to ask detailed questions about the contracts recruiters placed in front of them.
Lt. Gen. Timothy Kadavy, the director of the Army National Guard, said the National Guard Bureau has found no evidence of any nationwide, systematic problems on the scale of California’s, adding that it’s difficult to imagine the same type of improper payments occurring today.
He said that’s largely because of a new centralized database the Guard Bureau brought online in 2012. The nationwide Guard Incentive Management System (GIMS) automatically checks bonus applications from each state and U.S. territory against personnel data to make sure soldiers are eligible for payments before any checks are written.
“It also tracks administrative data over a soldier’s entire career — so when a soldier changes his military operational specialty or does something else that might make that soldier ineligible for a particular bonus, we can take action, whether that’s an exception to policy or something else in a timely process,” Kadavy said.”
That’s a dramatic departure from the policies of a decade ago, when California and other states, suffering from recruiting shortages paid bonuses upfront as soon as their new recruits signed up for military service, not even waiting to see if they showed up for their first day of boot camp.
Baldwin, California’s top officer, said that policy was a clear mistake and was part of a broken process that failed to keep faith with thousands of soldiers — not veterans — who were willing to risk their lives.
“We are going to have to reestablish trust with our soldiers, with their families, and with potential recruits,” he said. “I’m very encouraged by the steps Congress and DoD have taken along these lines. We have to show that if we have a problem in these programs, it’s on us, rather than putting the burden on the soldier to prove their innocence.”