Congress has reached a compromise on the Pentagon's effort to claw back millions of dollars in bonuses paid by the California National Guard, agreeing to forgive the debt in cases where soldiers "knew or reasonably should have known" they were ineligible to receive the money.
The compromise is part of a mammoth new defense spending authorization bill that's slated for a vote by the end of next week. It comes one month after news emerged about soldiers who'd fulfilled their enlistment commitments — but were facing wage garnishments and repayment demands, after the Pentagon said they weren't entitled to the sign-up bonuses.
Led by The Los Angeles Times, that coverage generated public outrage and prompted Defense Secretary Ash Carter to order the Pentagon to suspend its effort to reclaim improperly awarded bonuses until the process is both efficient and fair.
The new compromise deal is part of legislation that provides more than $600 billion in discretionary defense spending. In addition to setting terms for forgiving bonuses and student loan benefits, it would require the Defense Department to refund money repaid by soldiers who didn't engage in fraud — and to inform credit agencies about the forgiven debt.
"This is an important fix that ultimately does the right thing," said Rep. Darrell Issa, R-Calif. "It moves the burden of proof off the soldiers and onto the Department of Defense to prove that those who received bonuses knew they shouldn't have, and also helps make sure those who already wrongly repaid their portion are made whole at once."
In October, it emerged that thousands of soldiers were being compelled to repay money they'd received a decade ago, at the height of the U.S. military's fight in both Afghanistan and Iraq. The Los Angeles Times reported that nearly 10,000 soldiers were scrambling to repay the bonuses and other benefits — and that others were locked in legal disputes with the Pentagon.
"The problem of improper use of military troop-level incentives isn't limited to California — but the state has emerged as a focal point because of two factors: the large size of its guard force, and a history of overpayments.
"A scandal over the California National Guard's use of bonus money was first unearthed in 2010, when the Sacramento Bee reported that its incentive program had misspent as much as $100 million. The program's onetime leader, former Master Sgt. Toni Jaffe, was later sentenced to 30 months in prison, after pleading guilty to making $15 million in false claims.
"When it was first discovered, that scandal was deemed 'war profiteering' and was said to have benefited guard members who hadn't logged any combat duty; high-ranking officers were mentioned. But in the years since, lower-ranking service members have complained about garnished checks and a prolonged review process, saying they've done nothing wrong."