Most Calif. National Guard Soldiers Won't Have to Repay Improper Bonuses

Most of the service members who received improper reenlistment bonuses from the California National Guard probably will not have to pay back the Defense Department, a Pentagon official said on Tuesday.

Approximately 17,500 California National Guard soldiers were overpaid by recruiters between 2004 and 2010, and were on the hook to pay back the department for the mistake. But after extensive media coverage this past fall, Defense Secretary Ash Carter suspended efforts to recoup those improper bonuses so the Pentagon could review its process for collecting erroneous payments without unfairly burdening those caught in the middle of the debacle.

“The vast majority of those 17,000 cases we will be able to screen out, and forgive debts or forego debt collection without the need for more detailed review by the BCMR [Army Board for Correction of Military Records],” acting Undersecretary for Personnel and Readiness Peter Levine told reporters during a Pentagon briefing. Levine said the department would notify affected individuals “on a rolling basis” beginning over the next month.

Per Carter’s direction, senior Defense officials had until Jan. 1 to establish a streamlined, centralized process that ensures fair treatment of service members and quickly resolves all pending cases related to recapturing improper bonuses by July 1. Levine said department officials believe they can complete all the cases “well before the July 1 deadline.”

The Pentagon separated the 17,500 cases into two categories: 1,400 cases that were referred to the Defense Finance and Accounting Service for recoupment, and roughly 16,000 that were flagged for review but haven’t reached the debt collection process yet. About half of the 1,400 cases will be dismissed, and the department will let those soldiers know that they don’t owe the government. In cases where the individual has repaid the bonus, he or she will be reimbursed. Of the 16,000 cases, the screening process will eliminate about 15,000 of them, said Levine, according to a report from DoD News.

Soldiers whose cases are not eliminated will have an opportunity to present their case to the BCMR.

Levine said service members who took the bonus and received an education or training on the military’s dime but did not fulfill military service requirements are expected to pay the money back. “We don’t give someone a free education,” said Levine. “We give them a free education in exchange for a service commitment, and that is part of the bargain.” The acting undersecretary said there was nothing wrong with recoupment in general, when it’s warranted. But many of the cases in California involved government error in determining who was eligible for the bonus, or service members who “may have been misled as to whether they were eligible.” They fulfilled their end of the bargain, and then several years later, the government asked for its money back, which Levine said was “unfair.”

The fiscal 2017 National Defense Authorization Act does not allow the Pentagon to claw back improper enlistment bonuses unless the soldier “knew or reasonably should have known” he or she was ineligible for the benefit. The language would also require the Defense Department to take steps to ensure the snafu has not affected soldiers’ credit ratings, and to refund any repayments already collected unless the soldiers are guilty of fraud.

Levine said the department has also reviewed audits done in other states, and concluded none of them had the “kind of massive problem” California did related to improper reenlistment bonuses. “We believe that the National Guard Bureau and the Army has corrected the lack of internal controls that led to this problem in the first place,” he said.