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Military family: Enlistment bonus fiasco ‘depleted our savings’

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Master Sgt. Susan Haley’s family is the epitome of military sacrifice. She’s a 24-year veteran. Her husband served for 26 years. Their son lost his leg serving in Afghanistan.

But now, the California National Guard is demanding more sacrifices from her — to the tune of $650 a month.

“$650 is a quarter of our monthly income. And you just can’t all of a sudden come up with that money,” Haley told CNN’s “New Day” on Tuesday. “We have depleted our savings.”

Haley is one of thousands of veterans being forced to repay millions of dollars in re-enlistment bonuses after the California National Guard awarded the bonuses in error. Years later, officials realized many of the veterans were not actually eligible for the bonuses and said they wanted that money back — with interest.

Christopher Van Meter earned a Purple Heart for his sacrifice in Iraq, where he was hurled from an armored vehicle. But he, too, is making enormous sacrifices for the state Guard’s mistake.

“We were paying upward $1,300 a month back to that recoupment,” he said. “We weren’t able to afford everything — food for the kids, a day care.”

The California National Guard and several members of Congress say they would love to see the debts waived. But so far, no one has made that happen.

How did this mess start?

In 2006, at the height of the Iraq and Afghanistan wars, the Pentagon enticed soldiers to re-enlist by offering hefty bonuses. Haley and Van Meter both accepted $15,000 bonuses to extend their service.

But only soldiers with certain assignments — for example, intelligence, civil affairs and some noncommissioned officer posts — were supposed to get bonuses, the Los Angeles Times reported.

Investigators later discovered rampant fraud and mismanagement by California Guard officials trying to meet enlistment targets. One Guard official pleaded guilty in 2011 to filing false claims of $15.2 million.

So Haley and Van Meter received letters saying they owed anywhere from $15,000 to $46,000.

“I was completely and totally in shock. I couldn’t believe they were doing this to me,” Haley said. “They said that I had received these monies in violation of federal law. They were very accusatory and very demanding and aggressive.”

Both Haley and Van Meter said they appealed but to no avail.

Why not just waive the debts?

Rep. Mark Takano, a senior member of the House Committee on Veterans’ Affairs, said he wants all the repayment demands stopped — but doesn’t know exactly how to make that happen.

“We’ve been trying to sort this out ever since the story was broken over the weekend,” the California congressman told CNN’s “New Day” on Tuesday. “We weren’t clear whether the Department (of Defense) had authority on its own, or whether we actually had to address this statutorily.

“But whatever is the case, I’m asking the Department of Defense to cease its policy of clawing back these bonuses (and) give time for Congress to get back in November, and fully address this statutorily. But if indeed, the Department of Defense can handle this on its own, then it should.”

Defense Department spokesman Capt. Jeff Davis said the military can waive individual repayments on a case-by-case basis, but doesn’t have the authority to issue blanket waivers.

The Pentagon urged service members to take advantage of the appeals process while it works with the Army, the National Guard Bureau, the California Army National Guard and “other relevant authorities to resolve these issues,” spokeswoman Laura Ochoa said.

The California National Guard also said it doesn’t have the authority to ignore the debts — even if it wants to.

“The bonus audit and recoupment process is a federal program governed and adjudicated by the National Guard Bureau and the Department of the Army. The California National Guard does not have the authority to unilaterally waive these debts,” it said in a statement.

“However, the California National Guard welcomes any law passed by Congress to waive these debts. Until that time, our priority is to advocate for our soldiers during this difficult process.”

$15.2 million in false claims

The California Guard’s incentive manager, retired Master Sgt. Toni Jaffe, pleaded guilty in 2011 to filing false claims of $15.2 million, the Department of Justice said in a statement.

“When she pleaded guilty, Jaffe admitted that from the fall of 2007 through October 2009, she routinely submitted false and fictitious claims on behalf of her fellow California National Guard members,” the Department of Justice said in a statement.

“Jaffe admitted that she submitted claims to pay bonuses to members of the California National Guard whom she knew were not eligible to receive the bonuses and to pay off officer’s loans, even though she knew the officers were ineligible for loan repayment.”

In 2012, the sergeant was sentenced to 30 months in federal prison.

Three officers also pleaded guilty to fraud and were put on probation after paying restitution, the Los Angeles Times reported.

‘It’s gut-wrenching’

Van Meter, the Purple Heart recipient, was floored when he got a letter saying he owed a combined $46,000 — including the $15,000 reenlistment bonus, a student loan and an officer bonus.

“They tacked on a 1% processing fee into that,” he said.

“It’s gut-wrenching, because you have to figure out what you’re going to do and how you’re going to survive.”

Van Meter said after he retired in 2013, he was given three years to pay off the debt. Eventually, he and his wife refinanced their mortgage to pay off the surprise debt.

According to the Los Angeles Times, the California Guard has told 9,700 current and retired soldiers to repay some or all of their bonuses.

But Col. Michael Piazzoni, commander of the Soldier Incentive Assistance Center — which performed the audit — said the number is actually lower.

Of about 11,000 soldiers included in the audit, 1,100 were found to have received unauthorized payments that they have to pay back and 5,400 soldiers were found to have missing paperwork or lack of documentation of eligibility and may have to pay back that money, Piazzoni said.

About 4,000 soldiers were found to be eligible for payments they received.

So far, auditors have confirmed 2,300 unauthorized bonus payments were made to about 2,000 soldiers, amounting to at least $22 million in unauthorized bonuses. This number includes 1,100 soldiers who received unauthorized payments and those from the 5,400 figure who could not show proof.

If the remaining recipients do not produce proper documentation showing they were eligible, they could be liable to pay back those amounts to the Defense Department.

Takano, the senior member of the Veterans’ Affairs’ committee, said he wants the demands for repayment to be stopped as soon as possible.

“We need to just settle this problem, once and for all, in the lame duck Congress — if indeed Congress needs to act,” he said.

“But certainly if the Department of Defense has this completely within their authority, they need to stop the clawbacks now, and we need to take a look back and redress the harm that was done to other service members.”