Secretary of Defense Ash carter killed the Pentagon’s efforts to force veterans to payback decade old bonuses, thus ending what has been an another embarrassing episode for veteran relations under the Obama administration.

Members of the California Guard that had enlisted between 2006 and 2007 had been paid enlistment bonuses of $15,000. Last week, the Pentagon determined that some of the soldiers given those bonuses had not actually qualified for them, and demanded that they be paid back in full, and with interest.


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“There is no more important responsibility for the Department of Defense than keeping faith with our people. That means treating them fairly and equitably, honoring their service and sacrifice, and keeping our word,” Carter wrote.

Late last week, the Los Angeles Times broke this story. An internal audit by Colonel Michael Piazzoni uncovered the $22 million error, and determined that the money had gone to bonuses and money for college that was paid out to soldiers who were not technically eligible for the program.

Veterans who were determined to have received the money in error were told they’d have to pay it back. Those that didn’t could face criminal charges and have their current wages garnished.


“I signed a contract that I literally risked my life to fulfill,” Army sergeant first class Robert Richmond said in an interview with the LA Times. “We want somebody in the government, anybody, to say this is wrong and we’ll stop going after this money.”

And now someone in the government has. Secretary of State Ash Carter issued this statement earlier today.


“My statement on California National Guard payments:”

There is no more important responsibility for the U.S. Department of Defense (DoD) than keeping faith with our people. That means treating them fairly and equitably, honoring their service and sacrifice, and keeping our word. Today, in keeping with that obligation, I am ordering a series of steps to ensure 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. 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. So today, on the recommendation of Deputy Secretary Work, I am ordering measures to make sure we provide affected service members the support they need and deserve.

First, I have 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. 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 January 1 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.

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.

I want to be clear: this process has dragged on too long, for too many service members. Too many cases have languished without action. That’s unfair to service members and to taxpayers. The steps I’ve outlined are designed to meet our obligations to both, and to do so quickly.


It is important to note that the bonus issue goes farther than California. The Defense Department increased bonus payouts from  $891 million to $1.4 billion between 2000 and 2008.  It isn’t clear yet if this new decision will forgive all of those payments that were made in error, but it appears likely.

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