An influential U.S. senator and her colleagues criticized Army and company officials for failing to previously spot an alleged National Guard recruiting scam that may have cost taxpayers some $50 million.
Sen. Claire McCaskill, D-Mo., on Tuesday held a hearing to review allegations that about 1,200 people -- reportedly including two generals, dozens of colonels and about 200 officers overall -- collected improper payments as part of a wartime referral program that has since been discontinued.
The widespread fraud involved the Army National Guard's Recruiting Assistance Program, or G-RAP, which distributed at least $29 million and possibly as much as $50 million in questionable bonus payments. Those who scammed the system obtained from recruiters the names of enlistees who had already joined the service, passed them off as new referrals and then provided a portion of the bonus money as a kick-back to the recruiters.
"I cannot begin to express how disappointed and angry I am to hear of such carelessness with taxpayer dollars," said McCaskill, chairwoman of the Senate Homeland Security and Governmental Affairs Committee's Financial and Contracting Oversight Subcommittee. "We cannot have programs flying in the face of law and good-government practice simply to meet recruiting numbers, no matter how desperate the situation."
The referral program began in 2005 to help the service meet manpower needs during the Iraq war. It was managed by a company called Docupak, which paid those who signed up as informal "recruiting assistants" between $2,000 and $7,500 for each person they helped to enlist. The Army suspended the effort in 2012 after auditors flagged suspect payments.
In one case in Texas, former Spc. Xavier Aves, of San Antonio, collected $244,000 alone. He pleaded guilty to abusing the program by referring people who had already enlisted and providing kick-backs to recruiters who supplied him with their names and Social Security numbers. He was sentenced last summer to serve almost five years in prison.
The former director of the Army National Guard, retired Lt. Gen. Clyde Vaughn, defended the effort as successful in helping to end a manning shortfall of about 20,000 soldiers at a time when the service was dealing with the wars in Iraq and Afghanistan, as well as the aftermath of Hurricane Katrina.
"It was a great recruiting program," he said. "I don't think you'll find too many people that won't state that."
Vaughn said he wasn't aware of any irregularities in how the initiative was being implemented and that during monthly meetings with other adjutant generals and recruiting staff he stressed the importance of identifying participants who may be abusing the program.
"I told them, I said, ‘we got to catch the first peckerwoods that get out here and mess this thing up for everybody and we got to prosecute them quickly,'" he said. "If we'd had known that there was a real problem in this program during the time I was there, we'd have shut a state down, which would have been a major embarrassment," he added.
Overall, the program paid out almost $400 million -- an investment the Army has since determined to be illegal because the money doesn't qualify as bonus payments under law, McCaskill said. However, some of the perpetrators may not be punished because the statute of limitations may expire, she said.
"I'm really concerned that there are going to be people that wear a uniform that are going to beat this by virtue of the statute of limitations," she said. "These are criminals that have dishonored the uniform that we are all so proud of."
The Army's top criminal investigator, Maj. Gen. David Quantock, said his organization, Criminal Investigative Command, has prioritized high-risk and high-cost cases. So far, he said, 104 cases have been adjudicated and 16 individuals are in confinement.
"We again continue to go after this aggressively," he said.
The president of Docupak, Philip Crane, corrected the record in stating that the Alabaster, Ala.-based marketing company was first contacted about problems with the program by the Defense Criminal Investigative Service -- not that it reached out to the Army's Criminal Investigative Command, as initially reported. But he denied that his company had an unfair advantage when it bid for the work.
"I'm not aware of any information that we would have had that would have not been made public during the solicitation," he said.
McCaskill replied: "Well, evidently the auditor had found some that was."
She said her committee will continue to review the matter.