What Happens to Guardsmen Who Repaid Bonuses?

California National Guard Soldiers flank Deputy Todd Viller of the San Diego County Sheriff's Office as the three monitor progress of a wildfire near Valley Center, Calif. (Photo Credit: Staff Sgt. Jim Greenhill)
California National Guard Soldiers flank Deputy Todd Viller of the San Diego County Sheriff's Office as the three monitor progress of a wildfire near Valley Center, Calif. (Photo Credit: Staff Sgt. Jim Greenhill)

As the Pentagon's top civilian vowed to "resolve" a policy in which Guardsmen were ordered to pay back bonuses, questions swirled about what happens to the hundreds of troops who already returned the money.

An estimated 10,500 service members, mostly from the California National Guard, received enlistment bonuses of as much as $15,000 designed to address a personnel shortage in the ranks a decade ago during the peak of the U.S.-led wars in Iraq and Afghanistan.

But the money, which collectively totaled about $22 million, was improperly awarded and troops were ordered to pay it back or face such penalties as interest charges and tax liens, according to a story first reported by David Cloud, a reporter for The Los Angeles Times.

Now, as Pentagon officials and lawmakers consider waiving the debt, it remains unclear whether the fix will somehow accommodate the roughly 1,500 troops who either repaid the money or started the repayment process.

"How do you go back and address soldiers that have paid money back when we start alleviating debts of other soldiers? That's what makes this a very complex issue," Col. Peter Cross, director of public affairs for the California National Guard, said on Tuesday during a telephone interview with Military.com.

"I don't have an answer," he added. "It's going to take some very precise language and studying of the issue to make everybody whole again. Otherwise, you're going to have disparate treatment of soldiers."

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Since the story broke on Saturday, lawmakers and members of the public have reacted with outrage over the Pentagon's bonus repayment policy.

Rep. Duncan Hunter, a Republican from California and a former Marine who served in Iraq and Afghanistan, described the move as "boneheaded" and vowed to pursue a legislative fix when Congress returns in mid-November, if necessary.

But California National Guard, or CNG, officials say they warned Congress about the problem in 2014.

"In fact, the CNG even drafted and provided bill language in 2014 that would helped waive these obligations," Cross said in an email. "Unfortunately no action was taken on the legislation."

The issue first surfaced several years ago after Guard officials were accused of mismanaging the bonus program.

Army Master Sgt. Toni Jaffe, who oversaw the program for the Guard, in 2011 pleaded guilty to filing $15.2 million in false claims alone, landing a 30-month federal prison sentence, NPR reported. Interestingly, she didn't appear to do so for any personal gain.

Later, eight current or former members of the California National Guard were indicted on charges in 2014 of fraudulently obtaining recruiting referral bonuses, The Associated Press reported.

In response, the Guard created the Soldier Incentives Assistance Center to advocate for affected soldiers and support their appeals -- an effort that helped about 4,000 soldiers retain $37 million in bonus money, Cross said.

He said a provision to waive the obligations has been included in the fiscal 2017 authorization bill, known as the National Defense Authorization Act, or NDAA, which sets policy goals and funding targets for the fiscal year that began Oct. 1. But the language would need to be modified to reimburse troops who already returned the money, he said, and lawmakers haven't yet agreed to a compromise version of the bill.

Congressional leaders have said they're not at fault for the oversight.

House Majority Leader Kevin McCarthy joined other lawmakers in asking the Defense Department to waive the repayments. Meanwhile, the House Oversight and Government Reform Committee, headed by Jason Chaffetz, a Republican from Utah, on Tuesday afternoon announced it had launched an investigation into the matter.

"The committee is seeking information about this serious matter, and to see that officials who mismanaged bonus programs are held accountable," the panel wrote in a letter to Maj. Gen. David Baldwin, adjutant general of the California National Guard, and Air Force Gen. Joseph Lengyel, chief of the National Guard Bureau, and obtained by Military.com.

The letter requests that documents be turned over to the committee, including "all audits of overpayments related to bonus and student loan repayments by the California National Guard since 2002."

During brief remarks after an anti-Islamic state coalition meeting in Paris, Defense Secretary Ashton Carter on Tuesday said he had designated Deputy Defense Secretary Bob Work to investigate and resolve the issue. The deputy defense secretary is "working on it right now -- it's got its complexities to it," Carter said. "We are going to look into it and resolve it."

While the Pentagon is looking to speed up the process for granting waivers, the department under current laws and regulations isn't authorized to grant a blanket waiver, so individuals still have to petition the Defense Office of Hearings and Appeals to have a debt waived, according to Navy Capt. Jeff Davis, a Pentagon spokesman.

"We have the authority to waive individual payments on a one-by-one basis," Davis has said. "We do not have the authority to waive these things writ large."

The California National Guard also pledged to work with veterans who wish to file appeals to the National Guard Bureau and the Army Board for Correction of Military Records to wipe out the debts, The Los Angeles Times reported.

"While many [soldiers] have been helped," Cross said in an email, "we agree much more needs to be done in [California] and across the country to relieve our Soldiers of this burden and we hope Congressional /DoD leadership will follow through on their commitment to address these issues."

The issue doesn't appear to be unique to the Guard.

Earlier this year, the Pentagon's bomb squad team was saddled with debt due to an accounting error. One member of the team committed suicide. The department agreed to forgive the debt after Military.com and The Washington Post reported on the case.

-- Richard Sisk contributed to this report.

-- Brendan McGarry can be reached at brendan.mcgarry@military.com. Follow him on Twitter at @Brendan_McGarry.

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