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Pentagon Misses Deadline for Finishing California Guard Bonus Review

Members of the California National Guard stand in formation before undertaking operations on California's southern border, September 2010. (Staff Sgt. Jessica Inigo, California National Guard)
Members of the California National Guard stand in formation before undertaking operations on California's southern border, September 2010. (Staff Sgt. Jessica Inigo, California National Guard)

WASHINGTON -- Despite a last-minute push, the Pentagon has failed to fully meet a deadline set by Congress to review and mostly reverse efforts to recover enlistment bonuses for up to 17,500 California National Guard soldiers and veterans, including some who were wounded in battle.

Pentagon officials refused Tuesday to provide a breakdown of how many California Guard soldiers had their debts waived and how many are still facing repayment demands for bonuses that ranged from $15,000 to $80,000.

Officials have told lawmakers that they have resolved thousands of California Guard cases since Congress set the deadline last December in an effort to deal with a scandal first revealed by the Los Angeles Times last year.

But military officials have scrambled to finish paperwork for hundreds of remaining California Guard soldiers and veterans in recent days, in some cases sending checks out just before Monday's deadline.

Retired Master Sgt. Bill McLain, who now lives in Las Vegas, said he received a bank transfer of $4,500 on Monday to reimburse him for his payments on the $30,000 that the California Guard insisted he owed. He said he had fought the debt for five years.

"It's disheartening that when they owe you money they're in no rush, but it's a different story when you owe them money," said McLain, who was wounded during one of his four combat tours in Iraq and Afghanistan.

Completion of the review was slowed by the need to conduct a case-by-case review _ and in some cases to finish lengthy appeals by soldiers still facing demands for repayment of some or all of their bonuses, officials said.

"The Department is near completing its review of enlistment bonuses," said Laura Ochoa, a Pentagon spokeswoman. "This diligent review in coordination with Congress ensures we provide the appropriate solutions to our service members and respects our obligation to the taxpayer."

But Rep. Jeff Denham, R-Calif., a member of the House Armed Services Committee who spearheaded the push to let most Guard members keep their bonuses, criticized the Pentagon's failure to meet the deadline.

"Our intention was for it to be 100 percent resolved by now," Denham said in an interview, noting that Pentagon officials had told him they were 98 percent done. "It's disappointing to see this has gone all the way to the deadline and beyond."

Denham said he is skeptical that the Pentagon had abandoned heavy-handed tactics to recover money, and that it had waived debts of all those eligible.

"They need to prove to me that this is no longer an issue for anyone they contacted and harassed," Denham said.

In particular, he added, he wanted assurances that the Pentagon had helped soldiers contact credit agencies to correct any adverse effect on credit scores from the recoupment efforts.

"The reimbursement is obviously very, very important, but it's equally important to make sure their credit is fixed," Denham said.

The Times reported in October that 9,700 California Guard soldiers had been ordered to repay large enlistment bonuses -- and slapped with interest charges, wage garnishments and tax liens if they could not or would not -- after audits revealed widespread errors by the California Guard at the height of the wars last decade.

Although some bonuses were awarded improperly, The Times found that many of the affected soldiers had served honorably and had fulfilled their enlistment contracts, often in war zones.

They were ordered to repay the money years later, after many had left the military. Some had been given bonuses to which they were not entitled. Pentagon officials have said the vast majority had no idea they were ineligible for the money.

But many also were deemed ineligible because of paperwork errors or other mistakes by the military.

The public outcry led the Pentagon to halt the recoupment effort and prompted Congress to pass legislation in December that gave the Defense Department until the end of July to conduct a case-by-case review of the California Guard bonuses paid from 2004 to 2015.

Pentagon officials said that their review would look at 17,500 service members, the total number of California Guard members who received enlistment bonuses or student loan repayments.

The Pentagon is supposed to report the results of its review to the House and Senate armed services committees. Pentagon officials and California Guard officials said they would not share its contents until lawmakers are briefed.

"We're not quite there yet," said Lt. Col. Thomas Keegan, a California National Guard public affairs officer.

Some California Guard members who had their debts waived said they had given up hope of getting help from the Pentagon.

Christopher Van Meter, a 42-year-old former Army captain and Iraq veteran from Manteca, Calif., refinanced his home mortgage three years ago to repay $25,000 in re-enlistment bonuses and $21,000 in student loan repayments that the Pentagon says he should not have received.

In July, Van Meter said in an interview, he received the entire $46,000 back from the Pentagon. He credited Denham's office for helping him get the money.

There are signs that Pentagon officials are bending over backward to put the scandal behind them.

Susan Haley, a Los Angeles native and former California Guard master sergeant who deployed to Afghanistan in 2008, sent the Pentagon $650 a month -- a quarter of her family's income -- to pay down $20,500 in bonuses. In November, the Pentagon said she could stop the payments while the case was under review.

On Monday, she got a letter from the Army Board for Correction of Military Records, which has been handling the reviews, saying her debt had been lifted.

"The applicant knew or reasonably should have known that she was ineligible to receive all of the incentive pay received," the letter said.

But, it added, "the evidence presented is sufficient to warrant full waiver of recoupment," ruling that Haley should be reimbursed for the money she had repaid. She has not received the money yet, she said.

Other soldiers have not been so lucky.

John Bischler, a California Guard sergeant first class from Riverside, received a letter from the National Guard Bureau, the Pentagon agency that oversees the California Guard, informing him that he still owed $6,000 in student loan repayments he got in 2007 while deployed in Iraq.

He appealed the ruling.

"It's not true," Bischler said of the Army's contention that he should have known he was not eligible. "How do you prove what you didn't know?"

--This article is written by By David S. Cloud from The Los Angeles Times and was legally licensed via the Tribune Content Agency through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.