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Senators blast Army over recruiting fraud scandal

Feb. 4, 2014 - 06:00AM   |  
Recruiting Fraud MWM 20140204
Sen. Claire McCaskill, D-Mo., holds a hearing Feb. 4 about fraud in recruiting contracts in Washington, D.C. (Mike Morones / Staff)
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Maj. Gen. David E. Quantock, commanding general of U.S. Army Criminal Investigation Command and Army Corrections Command, testifies Feb. 4 during a hearing about fraud in recruiting contracts before the Senate Homeland Security and Government Affairs Subcommittee on Financial and Contracting Oversight in Washington, D.C. (Mike Morones / Staff)

WASHINGTON — Senators blasted the Army Tuesday for a recruiting scandal that involves thousands of soldiers and tens of millions of dollars.

Sen. Claire McCaskill, D-Mo., labeled the scandal one of the worst in Army history. It involved National Guard soldiers taking kickbacks for signing up new recruits. They scammed the Recruiting Assistance Program for more than $29 million in illegal payments. The program paid soldiers and even civilians thousands of dollars for helping to enlist a new recruit.

“The fraud investigation is one of the largest that the Army has ever conducted, both in terms of the sheer volume of fraud and the number of participants,” said McCaskill, who called the hearing before the Senate Armed Services Committee’s financial and contracting oversight subcommittee.

The scams included soldiers taking credit for signing up recruits who had already enlisted. Five soldiers appear to have netted nearly $1 million in bogus bonuses. In all, more than 3,000 soldiers received payments that appear questionable. In all, it will take until the fall of 2016 for the Army to review all the payments.

“I want you to know that the accusations of fraud and other potentially criminal actions surrounding the program are as disturbing to us as I know that it is to you,” Lt. Gen. William Grisoli, director of the Army staff, told the committee.

Another $66 million in bonuses remain to be investigated, Grisoli said.

Docupak, the contractor in charge of the program since it began in 2005, first notified the Army in 2007 about potential fraud. By 2012, the Army canceled the program, which had been expanded to the active-duty and Army Reserve. In all, more than 150,000 new recruits entered the Army through the program that cost $459 million.

McCaskill pressed the Army about why it took four years to detect a pattern.

Only nine cases were investigated from 2007 to 2009, said Maj. Gen. David Quantock, the Army’s top law enforcement officer. It wasn’t until 2010, when 10 cases indicated “that we have a major problem here.”

“That’s a long time when you’ve got fraud going on,” said Sen. Kelly Ayotte, R-N.H.

The scandal has touched top levels of the National Guard, including two two-star generals and 18 colonels. None of them has been imprisoned, lost benefits or resigned for fraud, Quantock said.

“It is particularly egregious when it is our leadership,” McCaskill said.

The statute of limitations on prosecutions may prevent some soldiers from being charged, Army officials have acknowledged. So far, 16 people have been convicted and are serving time in the scandal.

“It’s going to break my heart if a lot of people get away with this,” McCaskill said.

Sen. Ron Johnson, R-Wis., asked Army officials how the program went awry.

Grisoli replied that there was a breakdown in the Army’s acquisition and contracting procedures. The Army’s top auditor, Joseph Bentz, said investigators concluded that there was “very little” about the contracts that conformed with government guidelines.

Ayotte questioned the Army’s oversight of the contractor.

It was “insufficient,” Bentz acknowledged.

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