Army Guard Recruiting Fraud Tied to Weak Oversight

Undeserved “bounties” collected by recruiters under contract with the Army National Guard added up to fraud totaling at least $29 million in a program designed to boost troop strength during the Iraq war and after Hurricane Katrina, a Senate panel learned on Tuesday.

The state-administered Guard Recruiting Assistance Program, or G-RAP, launched in 2005 but cancelled in 2012 when the fraud came to light, paid thousands of dollars in fees to National Guard members, retirees, and civilians to recruit friends and family, and was considered successful enough to use in Army and Army Reserve recruiting. While the military is grateful for all recruits, professional recruiters, family members or anyone with access to a potential recruit’s personal information -- such as career goals -- are not eligible to receive a fee.

But in later years the program was wracked by “pervasive fraud, abuse, and mismanagement in the award and administration of contracts,” said Sen. Claire McCaskill, D-Mo., who chairs the Homeland Security and Governmental Affairs Subcommittee on Financial and Contracting Oversight. She called it a “widespread breakdown in oversight and accountability and the failure to follow multiple laws, regulations, and policies.”  

Army investigators agreed with much of the charges and described corrective actions in place, while the contractors and retired Guard officers involved portrayed the fraud as minimal.

Calling her panel’s probe “one of the biggest fraud investigations in U.S. Army history,” McCaskill decried a program that, while well-intentioned, “got rolled out and implemented without fraud control.”

Noting that the criminal fraud committed by 1,200 individuals included a general and dozens of colonels, she said, “the worst thing that could happen is for senior leadership to go quietly into the night” and receive their full pensions because the statute of limitations had expired while years passed before the fraud was exposed. "They dishonored the uniform, and it will break my heart if a lot of them get away with it,” she said.

The delay in unearthing the fraud, said Maj. Gen.  David Quantock, commanding general of the U.S. Army Criminal Investigation Command and Army Corrections Command, was because his staff of 150 investigators nationwide were dealing with 43,000 total felony cases and the G-RAP cases at first were only “dots.” Only two such cases surfaced in 2007, he said, five in 2008, and 10 in 2010, at which point the contractor Docupak came forward with evidence.

Since then, a task force of 60 full-time investigators, Quantock added, has documented $29 million in fraud and cleared another $203 million in recruiting bonuses that were legitimate, leaving a possible $66 million still in question.

The fraud, which sometimes involved recruits’ high school counselors or friends obtaining personal information and using it to claim credit for their recruitment, at its worst allowed one person to pocket $35,000, while five other culprits shared another $1 million, Quantock said.

Lt. Gen. William Grisoli, director of the Army Staff, told the Senate panel, “We are as disturbed about this as you, and are determined to put it right.” He said corrective actions have been taken to address this “complex and far-reaching” problem, reporting 559 criminal investigations of 1,219 individuals, 104 of whom “have been held accountable through either the courts or through administrative action by the Army.” Systemwide, the problem is being addressed by a program management review, Grisoli added.

One reason given for the poor oversight by contracting officers was confusion over the contractor’s legal authority, which had not been properly vetted, said Joseph Bentz, principal deputy auditor general of the Army Audit Agency.

Witnesses who worked on the guard recruiting project, however, defended the results. Ret. Col. Michael L. Jones, former chief of the Army National Guard Strength Maintenance Division, said it was “sheer nonsense” to argue, as some did, that pressure from military commanders caused recruiters to commit fraud. “We were doing what we could to avoid the draft, and it was a high-risk program,” he said. Internal controls were present “up the chain of command,” Jones said, and the cost of recruiting a soldier dropped from $18,300 to $2,400. Fraud represented only 1 percent, though even that is too high, he said.

Philip Crane, president of Docupak, said his company had procedures to verify that those receiving recruiting bonuses were not, for example, family members. He said only 28 recruiting assistants out of 300,000 in the program have been convicted, and that the program had a “ship rate” of 92 percent in getting civilians into military combat uniforms.

McCaskill said part of the problem is the “silos, the decentralized nature of the guard,” whose performance varied by state, she said. “All it would have taken to prevent this,” she added, was to ask the recruit who had recruited him.