California Guard vets' bonus fiasco: Months of uncertainty ahead

Pentagon suspends efforts to recoup veteran bonuses
Pentagon suspends efforts to recoup veteran bonuses

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Story highlights

  • Defense Department suspends efforts to get back bonuses from ineligible soldiers
  • "I'm glad that they stopped the bleeding," says Guard member who was told to repay $21,000

(CNN)When the Defense Department suspended its attempts this week to take back millions of dollars in bonuses that it says California National Guard members were improperly awarded a decade ago, two big questions went unanswered.

How many of the thousands of soldiers in question -- some of whom say they had no idea the bonuses were invalid -- will ultimately get to keep the money?
And of those who already have paid money back, how many will be repaid?
    Retired Master Sgt. Susan Haley, who says she depleted her savings trying to repay the military $21,000 after it surprised her with the demand four years ago, says the suspension is a good first step. But she and others may still wait months before the military makes final decisions.
    "I'm glad that they stopped the bleeding," Haley told CNN's "New Day" on Thursday. "I think at this point, because of the widespread fraud and mismanagement, that the benefit of the doubt should be given to the soldiers this time."
    Secretary of Defense Ash Carter said Wednesday he is suspending efforts to recollect improperly awarded enlistment bonuses and other bonuses given to some members of the California National Guard, following outrage from veterans and their families over attempts to recover the money 10 years after it was disbursed.
    Carter ordered that his department decide by July 1 on what to do with bonus payments given to 9,600 California Guard members who either weren't entitled to them or may not have been eligible for them.
    Remedies could include waiving the debt, though some still may be ordered to surrender the money, Air Force Gen. Joseph Lengyel said.
    "I'm excited and optimistic," said retired Capt. Christopher Van Meter, a Guard member who says he had to remortgage his home to make ends meet after being told he had to repay $46,000. "There's still a long road left to go."

    How did this happen?

    In 2006, at the height of the Iraq and Afghanistan wars, the Pentagon enticed soldiers to re-enlist by offering bonuses. Haley and Van Meter accepted $15,000 bonuses to extend their service.
    Thousands of soldiers told to repay enlistment bonus
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    But only soldiers with certain assignments -- for example, intelligence, civil affairs and some noncommissioned officer posts -- were supposed to get bonuses, the Los Angeles Times reported.
    Investigators later discovered rampant fraud and mismanagement by California Guard officials trying to meet enlistment targets. One Guard official pleaded guilty in 2011 to filing false claims of $15.2 million.
    So Haley received a letter saying she owed $21,000, including the bonus and a loan. Van Meter was told he owed $46,000 for the retention bonus, a student loan and an officer bonus.
    "I couldn't believe they were doing this to me," Haley said. "They said that I had received these monies in violation of federal law. They were very accusatory and very demanding and aggressive."
    Both Haley and Van Meter said they appealed, but were turned down.

    'It's important that we look at each case'

    The military says an audit found that of the 9,600 soldiers in question:
    • 1,100 received unauthorized payments;
    • 5,300 had missing paperwork or lack of documentation of eligibility;
    • 3,200 had not yet had their cases determined, in part because they are out of the service and difficult to locate, defense officials said.
    A further 4,000 soldiers were found to be eligible for the payments they received, Lengyel said.
    So far, of the 9,600, auditors have confirmed about 2,000 soldiers received unauthorized bonus payments, amounting to at least $22 million in unauthorized bonuses, said Col. Michael Piazzoni, commander of California's Soldier Incentive Assistance Center, which performed the audit.
    This number includes 1,100 soldiers who received unauthorized payments and those from the 5,400 figure who could not show proof.
    The military believes most of the soldiers had no ill intent when they received the bonuses, the Defense Department says.
    "It's important that we look at each case," Lengyel said.
    The California National Guard had said it didn't have the authority to ignore the debts.
    "However, the California National Guard welcomes any law passed by Congress to waive these debts. Until that time, our priority is to advocate for our soldiers during this difficult process."

    Repayment was 'a quarter of our monthly income'

    Wednesday's suspension was a huge relief for Haley and her family. The California National Guard was demanding repayments of $650 a month.
    "$650 is a quarter of our monthly income. And you just can't all of a sudden come up with that money," Haley told CNN on Tuesday. "We have depleted our savings."
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    She said she has been having difficulty paying the mortgage.
    "We're making sacrifices for our children and cutting back on just everything. And we already had a tight budget to begin with."
    The Iraq and Afghanistan Veterans of America (IAVA) started a petition calling on Washington to pay the veterans back.
    "Join us in calling on the Administration and Congress to find a fix before Veterans Day, November 11, 2016 to stop Uncle Sam's collections immediately and #PayThemBack," the petition reads.
    Retired Lt. Gen. Mark Hertling, a national security analyst for CNN, said the Defense Department has to take care to determine who received the bonuses without knowing they were ineligible -- and who took the money knowing they weren't supposed to.
    "Yes, there are certainly some poor soldiers who were put in dire economic straits, but at the same time there are probably some that knew exactly what they were doing, and they shouldn't have that money given back to them," Hertling said Thursday.
    Paul Rieckhoff, founder and CEO of IAVA, told CNN on Wednesday that something needs to be done.
    "Everybody across America is outraged and these folks need to have their situation fixed," Rieckhoff said.