Carter Promises 'Fair' Enlistment Bonus Recouping Process, Temporarily Suspends Collections

Defense Secretary Ashton Carter announced today that the Pentagon will suspend efforts to recoup National Guard enlistment bonuses and deal with the decade-old erroneous payments in a "fair and equitable" way.

Thousands of former California National Guardsmen were ordered to pay back hefty bonuses and tuition assistance after an audit found some of the incentives were the result of fraud and waste. Army Master Sgt. Toni Jaffe, who managed incentives for the California Guard, pleaded guilty in 2011 and received a 30 month sentence in federal prison for filing false claims totaling $15.2 million.

Members of Congress expressed outrage over the story -- "our National Guard members should not be penalized due to someone else’s bureaucratic mismanagement and criminal actions," said former Georgia guardsman Sen. Johnny Isakson (R-Ga.) -- though the L.A. Times reported that Congress members from California knew for two years that the Defense Department was going to take the money back from veterans.

In a statement today, Defense Secretary Ashton Carter outlined steps "designed to meet our obligations to both [veterans and taxpayers], and to do so quickly" while ensuring "fair treatment for thousands of California National Guard soldiers who may have received incentive bonuses and tuition assistance improperly as a result of errors and in some cases criminal behavior by members of the California National Guard."

"While some soldiers knew or should have known they were ineligible for benefits they were claiming, many others did not. About 2,000 have been asked, in keeping with the law, to repay erroneous payments. There is an established process in place by which service members can seek relief from such obligations," Carter said. "Hundreds of affected guard members in California have sought and been granted relief. But that process has simply moved too slowly and in some cases imposed unreasonable burdens on service members. That is unacceptable."

The secretary said he has ordered the Defense Finance and Accounting Service "to suspend all efforts to collect reimbursement from affected California National Guard members, effective as soon as is practical."

"This suspension will continue until I am satisfied that our process is working effectively," Carter continued. "Second, I have ordered a team of senior department officials, led by the senior personnel official in the Office of the Secretary of Defense, Peter Levine, to assess the situation and establish no later than Jan. 1, 2017 a streamlined, centralized process that ensures the fair and equitable treatment of our service members and the rapid resolution of these cases. The objective will be to complete the decision-making process on all cases as soon as possible - and no later than July 1, 2017."

"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. At the same time, it will respect our important obligation to the taxpayer."

Carter emphasized that "this process has dragged on too long, for too many service members."

"Too many cases have languished without action," he added. "That's unfair to service members and to taxpayers."