Tad Vezner, St. Paul Pioneer Press, Published February 14 2014
Three Minnesota cases under review in Guard recruiting fraud; probe looking at improper paymentsThe Army’s top law enforcement official confirmed this month that a National Guard recruitment program that paid civilians and soldiers thousands of dollars to persuade others to enlist has defrauded the government of somewhere between $29 million and $95 million – potentially as much as a quarter of the monies allocated to the program in the first place.
The issue – which includes three cases from Minnesota – was raised during a U.S. Senate subcommittee hearing Feb. 4 “to examine reports of pervasive fraud, abuse, and mismanagement in the award and administration of contracts for the Army National Guard’s recruiting assistance program.”
“This criminal fraud investigation is one of the largest the Army has ever conducted, both in terms of sheer volume of fraud, and the number of participants,” said Sen. Claire McCaskill, D-Mo., who chaired the hearing.
The program was created in 2005, when Guard recruiters were struggling to meet their numbers amid repeated deployments to both Afghanistan and Iraq.
It provided financial incentives to soldiers and civilians to act as “informal recruiters,” or “recruiting assistants,” who would get paid between $2,000 and $7,500 for every new recruit they persuaded to enlist.
Problems arose when recruiters – who are prohibited from taking part in the program, since recruiting is their job – partnered with assistants, supplied them with names and Social Security numbers of soldiers who had already signed up, and then split the bounty.
In other cases, civilians such as school guidance counselors or principals would become aware of students who were already going to enlist in the Guard, and claim the bounty without the students’ knowledge.
In the large majority of cases, recruits were unaware that they were being claimed, Army officials said.
The Army has so far determined that $29 million was paid fraudulently – after reviewing $203 million of the $386 million that went toward the program.
Maj. Gen. David E. Quantock, the Army’s provost marshal general and top law enforcement official, testified that the amount of fraudulent payouts could reach as high as $95 million once all payouts are reviewed, though Quantock estimated that $50 million was a more likely total.
Of the 106,364 people who received payments nationwide, 1,219 people are or have been investigated for fraud – including 368 recruiters.
According to the Army’s data, 15 individuals from Minnesota – seven recruiters and eight recruiting assistants – were investigated. In total, the state had 159 recruiters who used 3,147 assistants, according to Guard data presented at the hearing.
The Minnesota Guard said those individuals were involved in 16 separate cases that were forwarded to the National Guard Bureau for investigation.
Of those cases, four were deemed valid enough to forward to the U.S. Army’s Criminal Investigation Division. One of those cases was subsequently dismissed.
Minnesota National Guard spokesman Col. Kevin Olson declined to give additional information on the three remaining cases, “to protect the integrity of any ongoing investigations and reviews.”
Army officials said their investigations could stretch into 2016.
Minnesota ranked roughly in the middle of all states, in terms of the number of people who were investigated. Texas and California ranked the worst.
The Guard members being investigated nationwide include a major general, 18 full colonels and dozens of junior officers. So far, Army officials noted that no high-ranking officers have lost benefits because of the investigations.
The Army became aware of a smattering of fraud cases involving the program in 2007, though it wasn’t until 2011 – when 10 fraud cases came in at once – that it began a formal investigation of the program as a whole.
The Army ordered the program be discontinued in 2012; Congress was not made aware of the problems until a Washington Post report on the program that same year.
McCaskill concluded that the program did not contain even “minimal oversight.”
“I think the chain of command got in the way on this one. I think the decentralized nature of the Guard contributed to the problem,” McCaskill added.
National Guard officials argued during the hearing that the number of people involved, in terms of total percentage, was small, and the program was ultimately successful.
“We don’t lose sight of the fact that it was a tremendous recruiting program, and we got the people,” former Army National Guard director Lt. Gen. Clyde A. Vaughn, who retired in 2009, said at the hearing.
“I get it that you incentivize people with money, you’re going to get results,” McCaskill replied. “What we’re here to argue about is whether or not it was designed in a way to prevent people from making money without adding value.”
The program was administered by Docupak, an Alabama-based contractor, and overseen by the Army National Guard’s strength maintenance division.
McCaskill also expressed concern that the number of those to be investigated would allow some to escape under the statute of limitations.
“These are criminals that have dishonored the uniform that we are all so proud of,” McCaskill said.
The Pioneer Press is a media partner with Forum News Service.