Pentagon Suspends Efforts to Recoup Improper Bonuses From California National Guard

Defense chief Ash Carter said: "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." Defense chief Ash Carter said: "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." Jacquelyn Martin/AP

Defense Secretary Ash Carter on Wednesday suspended efforts to recoup bonuses improperly paid to California National Guard members so the Pentagon can review its process for collecting erroneous payments without unfairly burdening those caught in the middle of the debacle.

Carter in a statement said the suspension will “continue until I am satisfied that our process is working effectively.” He also has tapped senior Pentagon officials to establish by Jan. 1 a “streamlined, centralized process” that ensures fair treatment of service members and quickly resolves all pending cases related to recapturing improper bonuses by July 1.

“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, adding that while some service members should have known they were ineligible for some of the benefits they received, many did not. “At the same time, it will respect our important obligation to the taxpayer.”

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Carter noted that about 2,000 recipients have been asked to return erroneous payments. “There is an established process in place by which service members can seek relief from such obligations,” he said. “Hundreds of affected guard members in California have sought and been granted relief. But that process has simply moved too slowly and in some cases imposed unreasonable burdens on service members. That is unacceptable.”

The Los Angeles Times last weekend reported that the California National Guard overpaid in reenlistment bonuses about 10,000 soldiers to fight in Iraq and Afghanistan a decade ago. Now, the government wants its money back and is forcing recipients, many of whom fought multiple tours, to repay bonuses and other financial incentives of $15,000 or more – threatening them with interest charges, wage garnishments and tax liens. “Investigations have determined that lack of oversight allowed for widespread fraud and mismanagement by California Guard officials under pressure to meet enlistment targets,” the article stated.

The news has sparked outrage from lawmakers, service members, and the veteran community. Rep. Darrell Issa, R-Calif., on Monday sent letters to Carter and the chairmen and ranking members of the House and Senate Armed Services panels demanding that the clawback be overturned, either by the Pentagon or in the conference set for December to finalize the fiscal 2017 National Defense Authorization Act. Issa on Wednesday said that while Carter had taken “the appropriate first step,” a temporary suspension was not enough. “The Department of Defense needs to permanently stop these collection efforts and return every penny to those who’ve already repaid them,” Issa said. 

The Hill on Wednesday reported that Congress knew as far back as 2012 that the National Guard was trying to recoup the erroneous bonus payments. The problem was not confined to California, but that is where auditors found many of the overpayments.

House Majority Leader Kevin McCarthy, R-Calif., said on Wednesday that he was “very pleased that the Department of Defense responded to the outcry from Americans across the nation.” The California Republican said that while he was happy to work with Defense officials on addressing the problem, “we must continue to provide a long-term legislative solution so that this never happens again.”

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