National Guard members won’t have to repay bonuses — for now

McClatchy Washington Bureau

WASHINGTON — The Pentagon has agreed under pressure from Congress to suspend its demand that thousands of California National Guard veterans repay re-enlistment and retention bonuses given during the height of the wars in Iraq and Afghanistan.

The bonuses were illegal, and Defense Secretary Ashton Carter said in a statement that “while some soldiers knew or should have known they were ineligible for benefits they were claiming, many others did not.”

Carter said Wednesday that the Pentagon would put in place a new process that “puts as little burden as possible on any soldier who received an improper payment through no fault of his or her own.”

The Sacramento Bee revealed the fraudulent payments in 2010. The California Guard’s incentive manager, retired Master Sgt. Toni Jaffe, pleaded guilty in 2011 to filing false claims.

The Pentagon has been demanding repayment of the incentives, which tended to range from $15,000 to $20,000 per soldier. The debt is a major hardship for many veterans, who said they are being punished now for accepting bonuses recruiters offered as they eagerly sought to bolster the wartime ranks.

Carter said efforts to reclaim the money will stop until a better process for soldiers to appeal is created by the beginning of the new year. He said the goal is to resolve all cases by July.

“Ultimately, we will provide for a process that puts as little burden as possible on any soldier who received an improper payment through no fault of his or her own,” Carter said. “At the same time, it will respect our important obligation to the taxpayer.”

He provided no details on how many soldiers might still be asked to repay their bonuses. Peter Levine, the acting undersecretary of defense, told reporters at the Pentagon that there would be no blanket forgiveness of repayment demands. He said each case will be resolved on “its own merits.”

The $100 million in bonuses and tuition assistance were wrongly provided to the California National Guard soldiers from 2005 to 2010. Several officers pleaded guilty to misuse of funds.

The Pentagon has been clawing the money back from soldiers for years while Congress ignored the issue.

The Bee described the repayment demands in 2013, and in the past four years the Army collected $22 million from soldiers. Soldiers struggled with garnished checks and a broken appeals process.

There were halfhearted efforts to help the soldiers, including a failed measure submitted to the national defense budget two years ago that would have more quickly resolved complaints from soldiers.

Members of Congress nevertheless appeared surprised by a Los Angeles Times article last weekend about the effort to reclaim money from soldiers. House Majority Leader Kevin McCarthy, R-Calif., said on Fox News Channel’s “Fox & Friends” this week that he had no idea what was going on.

“That is outrageous. I’ve met with individuals all the time — never did I hear this come up. This is outrageous going forward. I cannot imagine anyone who knew about this in the House would not have acted upon this,” McCarthy said.

Members of Congress from both parties rushed this week to declare themselves appalled and pledge to stop the Pentagon. McCarthy and 24 of his colleagues sent a letter to the Defense Department on Monday asking that attempts to collect the debt from soldiers be halted.

Many California lawmakers aren’t satisfied with the result. Both of California’s senators, Dianne Feinstein and Barbara Boxer, said it’s not enough to suspend the debt collection. The senators are preparing legislation to permanently stop the bonus repayments.

“The small number of service members who knew they weren’t supposed to receive bonuses will be exempt from the bill,” the two Democratic senators said in a joint statement. “We’re hopeful the Pentagon will resolve this issue on its own, but want to ensure those who wore our nation’s uniform that they won’t be punished for the actions of others.”

California Republican Assembly Leader Chad Mayes complained that halting the debt collection does nothing for the soldiers who have already been forced to repay their bonuses.

“It’s long past time to do the right thing,” Mayes said. “Help our veterans, don’t bankrupt them.”

Rep. John Garamendi, D-Calif., said action is needed as soon as Congress returns after the election.

“We must pass a law that removes the repayment obligation for those National Guard members who, through no fault of their own, are caught in a bureaucratic nightmare,” he said. “We must also ensure that Guardsmen who have paid back all or portions of these bonuses are issued a full refund.”

The president, though, is reluctant to just let all the soldiers to keep their bonuses. White House spokesman Josh Earnest said the California National Guard’s financial incentive program was a fraud and that each of the soldiers’ cases should be considered individually.

“There is some evidence to indicate that some people shouldn’t have received bonuses and the Department of Defense does have a responsibility to taxpayers to be good stewards of taxpayer dollars,” Earnest said. “And if there was a payment that was made in error, they have a responsibility to taxpayers to go and recover that money.”

He said the soldiers have to be treated fairly, though, and that doing so is a top priority of the president.

“The president’s expectation is that each case would be considered individually and each person who committed to serving this country is going to make sure that any promises that were made to them are kept, and that those individuals are going to be treated fairly,” Earnest said.

It’s not clear why the issue was so long ignored. The California National Guard said it approached congressional and federal leaders in 2014 about easing the soldier debts, while congressional staff members suggest the Guard didn’t push hard or present the full scope of the problem.

Rep. Jeff Denham, R-Calif., offered an amendment to deal with the issue in 2014 but withdrew it after being told that the Obama administration already had the authority to forgive the debts.

Denham said in a statement that it’s “disgraceful” that the administration didn’t take action earlier.

Carter said hundreds of California National Guard members have received relief from the debts through appeals. But he conceded that the appeals process isn’t working.

“This process has dragged on too long, for too many service members. Too many cases have languished without action,” Carter said. “That’s unfair to service members and to taxpayers.”