The U.S. Army violated federal law by refusing to pay dual housing allowances to reservists on assignment in Europe and erred by taking disciplinary actions against them, a review board said in a ruling that also recoups a total of $500,000 for seven soldiers.
The decision Friday by the Army Board for the Correction of Military Records could have ramifications for numerous other troops and cost the Army millions more.
Army finance officials' decisions that "gave rise to the investigative and disciplinary actions ... were erroneously executed and erroneously implemented," the board ruled.
The board said the service must start paying back the reservists no later than October, and their records are to be cleared of wrongdoing.
A federal court had ordered the board to consider the cases of the reservists, who sued the Army in 2018. Patrick Hughes, a former Air Force attorney now with the Patriots Law Group, said the Army owes about $500,000 in compensation for the denied payments and the debts the reservists incurred.
Hughes said the next step is to obtain payouts for other soldiers who were ensnared by the Army's faulty interpretation of regulations. He is preparing a wider class-action case against the Army that could have tens of millions of dollars at stake.
"We think there could be thousands of soldiers who were affected," Hughes said.
At issue in the case was a contention by Army finance officials in Europe that reservists who mobilized from the U.S. weren't entitled to a basic housing allowance for their American residence and an overseas housing allowance if the Army could not provide on-post accommodations.
For years, reservists received dual allowances when mobilized. Unlike active-duty troops, who move with their household goods, reservists generally are activated for shorter assignments and must maintain two households if the Army can't provide base housing.
But around 2016, Army finance officials in Europe changed their interpretation of the federal Joint Travel Regulation. As a result, reservists received only one allowance. The erroneous interpretation led the Army to take multiple "unjust actions," the board said when detailing the case of Maj. William Colin Schneck in its ruling.
After years of investigating, Hughes said he had concluded that the problem can be traced to Army finance officials in Germany who came up with a "half-cocked idea" to save money.
"That idea ended up getting endorsed by Army G-1, and there you are," Hughes said, referring to the Army's highest-level personnel office.
The Army board issued seven decisions, one for each reservist in the Patriots Law Group case, and it came to the same conclusion in each one: The Army erred by denying dual housing allowances and seeking recoupment of past payments.
The board also ordered the service to take other steps, including deleting all negative findings, such as letters of reprimand or files stored in Army criminal databases, from the soldiers' records.
In addition, the ruling directed the Army to authorize special selection boards to determine whether promotions are now in order for the affected troops.
Schneck, who is owed about $56,000, remains infuriated that the board's action came only after a yearslong legal battle and the threat of a federal lawsuit.
"No soldier should have to pay to make the Army do the right thing," he said. "The Army has left me to piece my career back together in the aftermath alone."
The other reservists who sued are Bradley Wolfing, Ryan Mirabal, Alexander Gardiner, James Copas, Timothy Kibodeaux and Louis Morelli.
Hughes said that besides the financial fallout, his clients were denied promotions, and some were forced out of the service. The damage lingered for some reservists in the civilian sector, he added. Those who had been flagged in criminal databases had difficulty passing background checks.
While the board's ruling Friday applied only to the seven reservists involved in the Patriots Law Group's lawsuit, a legal precedent has now been established and other lawsuits are in the works, Hughes said.
A related case that could underpin a class-action suit involves Col. Richard Gulley, who is now retired. He was ordered to repay $135,500 of his housing allowance.
Gulley said that over five years, he was subjected to repeated investigations, harassment and even arrest by Army criminal investigators while serving as a U.S. Africa Command deputy chief of staff in 2017.
Gulley, a commercial airline pilot, was charged with fraud and larceny by the Army just before his 2017 retirement but never was prosecuted. He said he still faces questioning over the issue every time he passes through customs as part of his job.
He and others involved in the cases against the Army say they repeatedly sought support from their representatives in Congress to investigate the matter, but they say action was never taken.
In commenting on the board's ruling, Gulley recounted the ordeal the Army put him through as a result of the erroneous interpretation.
"It took four-and-a-half years to solve what any first-year law student could have understood correctly," Gulley said. "I had to endure four investigations in six years, three arrests, CID harassment, assassination of my character and multiple secondary legal consequences due to the Army's lack of leadership with regards to reserve travel regulations."