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Pentagon offers temporary fix for California Guard pay problems

The Pentagon plans to "surge" manpower and "streamline" bureaucracy to resolve individual appeals from up to 10,000 California reservists asked to repay bonus money improperly approved a decade ago.

But the Defense Department's latest effort will not permanently change existing administrative rules that allow troops to question debts they feel were wrongly levied by military accountants.

"What we are envisioning is a temporary process," said Peter Levine, the Pentagon's acting undersecretary of defense for personnel and readiness.

On Wednesday, Levine was tapped to spearhead the Pentagon's response after days of public outrage stemming from the California National Guard's push to recoup money fraudulently awarded during the height of the Iraq war. The outcry followed a report in the Los Angeles Times revealing the stress and financial hardship some veterans face as a consequence. 

Many individual appeal efforts have stalled in the military's bureaucracy. For the troops who've been targeted and are unable to pay back the government, these debts can lead to interest charges, wage garnishments and tax liens.

Defense Secretary Ash Carter has ordered a halt to the recoupment effort. He also promised to review and streamline the process that enables service members to appeal such debts.

Carter’s order comes amid mounting pressure from Congress. But some lawmakers on Wednesday said it doesn't go far enough, and several demanded the Pentagon work to waive the veterans' debts entirely, not simply re-examine them.

California Democratic Sens. Dianne Feinstein and Barbara Boxer said they plan to unveil legislation next month to permanently end collection efforts on this issue.

Rep. Vern Buchanan, R-Fla., said military officials owe an apology to the families who've been targeted.

"Forcing innocent soldiers and veterans to repay these funds 10 years after they went to war on the nation’s behalf is obscene and unjustified," he said in a statement. "The Pentagon needs to back off and leave them alone."

Defense Department officials say they do not have legal authority to waive debts for large groups of people. "Each case is going to need to be evaluated on its own merits. It’s not something that we think we can do with a blanket approach to everybody," Levine said.

Recoupment might be warranted in some cases, he added. For example, if a solider accepts a re-enlistment bonus but fails to remain in the Army through the end of his term, then that soldier is legally required to return portions of his bonus.

And there may be cases where reservists knew their enlistment bonuses were improper. Carter’s statement on Wednesday said "some soldiers knew or should have known they were ineligible for benefits they were claiming, many others did not."

A federal investigation several years ago found widespread fraud and mismanagement by California Guard officials that resulted in local units paying out more than $20 million in bonuses and student loan payments to soldiers who did not qualify for them or were approved despite problems with their paperwork.

The improper bonuses were doled out at a time when the Army was struggling to meet its recruitment goals during the peak of the Iraq war.

Some of the efforts to recoup the bonuses began more than three years ago and many long-standing appeals remain unresolved. More recent audits found there may be up to 10,000 reservists who received the improper bonuses and could be forced to return the money.

For the troops who have already paid back the bonus, the Defense Department will allow them to file a new appeal and seek a review of their case to determine whether the initial bill was warranted.

"We will give them the ability to recover the money," Levine said. "If we determine that recoupment was unjustified, then there will be a process that allows for the reversal and recovery of that money."

For years, service members have complained about the painstaking process for fixing an accounting problem with their pay and benefits. In an instance unrelated to the California National Guard problem, the Pentagon earlier this year tried to reclaim enlistment bonuses for the Pentagon’s own bomb squad. Those debts were cancelled after those troops complained.

For now, however, there are no permanent changes planned for the existing appeals process, which starts at the individual service or component level and ultimately ends with the Defense Office of Hearing and Appeals, the department’s highest arbiter of pay and benefits problems.

"We want to add resources to existing processes with existing track records rather than create something completely out of whole cloth," Levine said. "We will surge existing processes and capabilities that is the intent so once we are done with this California block of cases we will presumable revert to the existing process." he said.

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