Secretary of Defense Ash Carter on Wednesday ordered the Pentagon to suspend efforts to claw back enlistment bonuses improperly given to thousands of California National Guard members during the height of the Iraq war.
Carter’s order follows a Los Angeles Times report Saturday that said the Pentagon was demanding repayments from about 9,700 California Guard members who had received enlistment bonuses, student loans or other payments, mostly between 2006 and 2008.
Soldiers argued that it was unfair to demand repayment of enlistment bonuses and tuition assistance of $15,000 or more when their only mistake was to take financial incentives that recruiters offered. Many served multiple combat tours in Iraq and Afghanistan, and some were badly wounded.
The Pentagon demands for reimbursement sparked widespread public outrage, especially since the California Guard insisted it had warned members of Congress about the problem in 2014. On Tuesday, President Barack Obama ordered the Pentagon to expedite its review of the overpayments.
In a statement, Carter said he had ordered the Defense Finance and Accounting Service, the Pentagon agency responsible for collecting the repayments, to “suspend all efforts to collect reimbursements from affected California National Guard members, effective as soon as it is practical.”
He said the suspension would continue “until I am satisfied that our process is working effectively.”
Carter said he ordered a team of senior Defense officials to assess the situation and create “a streamlined, centralized process that ensures the fair and equitable treatment of our service members and the rapid resolution of these cases.”
The goal is to resolve the cases by July 1, 2017, he said.
Carter did not indicate if the Pentagon was prepared to waive all the debts, which include millions of dollars in student loans to California Guard members.
Carter said that while many soldiers did not know the payments were improper, “some soldiers knew or should have known they were ineligible for benefits they were claiming.”
“Ultimately we will provide for a process that puts as little burden as possible on any soldier who received an improper payment through no fault of his or her own,” Carter said. “At the same time, it will respect our important obligation to the taxpayer.”
About 2,000 soldiers have been told to repay improper payments. Audits determined they were ineligible for bonuses and they may have to repay some or all of the money unless Congress takes steps to forgive the debts.
But the California Guard also has demanded repayments from another 7,700 soldiers whose bonuses have been found to have paperwork errors, missing documentation or other problems.
Carter said “hundreds of affected Guard members in California had sought and been granted relief” after filing appeals with the Pentagon.
“But that process has simply moved too slowly and in some cases imposed unreasonable burdens on service members,” he said. “That is unacceptable.”
Soldiers said the appeals process is slow and nerve-wracking for families. Some had their paychecks garnished even before their appeals were resolved.
“I want to be clear: This process has dragged on too long, for too many service members. Too many cases have languished without action,” Carter said. “That’s unfair to service members and to taxpayers. The steps I’ve outlined are designed to meet our obligations to both, and to do so quickly.”
Members of Congress and veterans groups applauded Carter’s order to suspend the repayments.
“This is a good step from the Pentagon. But it is long overdue and far from enough,” said Paul Rieckhoff, founder of Iraq and Afghanistan Veterans of America.
“Thousands of lives have been turned upside down and veterans who have served honorably are now in financial ruin through no fault of their own. While it’s good for them to know recouping has been halted, that does not make them financially whole or address their urgent needs. Many will be stuck waiting for clarity and the results of the investigation until next year. The Pentagon needs to do more than just halt the recouping; it needs to pay them back with interest.”