The Pentagon announced Wednesday that it will suspend efforts to force thousands of California National Guard soldiers to pay back enlistment bonuses and other incentives that were improperly given out during the wars in Iraq and Afghanistan.
"There is no more important responsibility for the Department of Defense than keeping faith with our people," Secretary of Defense Ashton Carter said in a statement Wednesday. "That means treating them fairly and equitably, honoring their service and sacrifice, and keeping our word."
The announcement does not end the reimbursement process, but postpones collection efforts while the Pentagon and Congress look for a long-term solution.
Nearly all of the soldiers took the bonuses in good faith and were unaware of the misspending until notices arrived in the mail years later. Some had to repay more than $20,000 and a few more than $40,000. Many had wages garnished and racked up penalties and other debt trying to pay back the bonuses.
A report on their hardships in the Los Angeles Times over the weekend provoked broad criticism from top lawmakers and major veterans groups.
"It is unthinkable to me that the Department of Defense's first reaction is to punish service members who fulfilled their end of the deal," Brian Duffy, the national commander of the 1.7 million-member Veterans of Foreign Wars, said in a statement. "This is how you destroy all faith in a Pentagon that is supposed to have your back."
Carter said Wednesday that he had ordered his department "as soon as practicable" to temporarily cease all efforts to collect on the debts. The Pentagon plans to set up a finance team by January to review cases. The team would offer "a streamlined, centralized process that ensures the fair and equitable treatment of our service members and the rapid resolution of these cases," Carter said.
"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 added. "At the same time, it will respect our important obligation to the taxpayer."
The National Guard initially said nearly 10,000 soldiers were affected, but the Pentagon said Wednesday that the number was closer to 2,000.
"We deal with these problems all the time, but we deal with it in ones and twos, not in hundreds and thousands," said Gordon Trowbridge, deputy Pentagon spokesman. The Pentagon said it is investigating cases beyond California, but said those will likely add up to "dozens."
Lt. Col. Joel Lynch, spokesman for the Arkansas National Guard, said no guardsmen in the state were having their bonuses recouped for overpayments like those in California.
"This issue goes back several years and we, along with the rest of the National Guard states, were audited. We were audited in 2012 and had no discrepancies," Lynch said. "We are double checking this week because of the [Los Angeles Times] story but have not found any problems with our bonus payments."
The botched bonuses stem from the 2000s, when the military was under pressure to meet recruiting goals. During that time, the California Guard sent troops through an assembly-line-style re-enlistment process at mass meetings, where bonuses were approved in minutes. The re-enlistments were overseen by a master sergeant, Toni Jaffe, who lavished troops with bonuses and forgiveness of student loans. She pleaded guilty in 2012 to approving more than $15 million in fraudulent claims.
Guard members began receiving collection notices in 2012. Some refused to pay. Some sued. Still others were pushed into financial distress by payment notices demanding more than $1,000 a month, and racked up late fees and interest.
If soldiers refuse to pay the bonus back, they could face interest charges, wage garnishments and tax liens.
In 2014, the National Guard asked Congress to pass a law forgiving some of the debt, but Congress balked at the cost. Since the Los Angeles Times article was published, however, top lawmakers have lined up to demand a fix.
House Speaker Paul Ryan, R-Wis, who had pressed the Pentagon to suspend the program, said Wednesday: "I'm glad the Pentagon came to its senses."
House Majority Leader Kevin McCarthy, R-Calif., also welcomed the development, saying he spoke with Deputy Defense Secretary Robert Work Tuesday night and vowed to work with other members of Congress to provide a legislative solution so the repayment issue does not recur.
House Minority Leader Nancy Pelosi, D-Calif., welcomed the Pentagon announcement, but said lawmakers need to find a permanent solution.
"The heroes who served our country in uniform deserve every bonus and benefit they received in good faith," she said. "We all must work together to swiftly address this situation and monitor any additional issues that come up in California and other states."
Senate Armed Services Committee Chairman John McCain said the move by the Defense Department is "a long-overdue first step," and he vowed to work with Senate colleagues "to explore all options available to hold those responsible for this unacceptable situation accountable and to ensure this never happens again."
Rep. Duncan Hunter, R-Calif., who served in the Marine Corps in Iraq and Afghanistan, called the repayment policy "disgraceful and insulting."
In a letter to Carter, he added, "I ask that you utilize your authority to influence a solution, including a possible legislative fix if determined necessary, that's in the best interest of the individuals and families impacted."
Major veterans groups demanded that the Pentagon not only stop collecting on the bonuses but also reimburse what soldiers have already repaid.
"It is unthinkable that these brave Americans who stepped forward when others did not after the 9/11 attacks are being left high and dry by their leadership," said Paul Rieckhoff, the chief executive of Iraq and Afghanistan Veterans of America. "The fact that our government would ask for it to be repaid with interest is simply unacceptable."
Information for this article was contributed by Dave Philipps of The New York Times; by Lolita C. Baldor, Matthew Daly and Vivian Salama of The Associated Press; and by Hunter Field of the Arkansas Democrat-Gazette.
A Section on 10/27/2016
Print Headline: U.S. halts clawback of Guard bonuses