DoD Update on California National Guard Bonuses

January 6, 2017

On Tuesday, Acting Undersecretary of Defense Peter Levine held a press conference to explain the progress DoD has made in addressing the “clawback” of improperly paid California National Guard bonuses from servicemembers. DoD will unilaterally begin forgiving debts over the next month and notifying soldiers if their debts have been dismissed.

Levine acknowledged that “many of these servicemembers fulfilled their obligation. The error was … on the part of the government.”

In October, DoD Secretary Ashton Carter directed that the department review all California National Guard bonus debts by July 2017. Levine said DoD would complete its work far sooner than the deadline.

DoD established a two-step process. First, the Army Audit Agency and Army Review Boards Agency screen the cases to determine if there is enough information to dismiss the debt. What Levine refers to as “the hard cases” will be sent to the Army Board for Correction of Military Records for individualized review where the soldiers will “have an opportunity to make their case” that relief is warranted.

DoD is dismissing debts where it sees the servicemember “fulfilled their service commitment and there's no obvious reason to believe that they knew or should have known that there was an erroneous payment,” as well as “older debts, smaller debts, [and] cases with people who are junior in rank who wouldn't necessarily be expected to know of eligibility” criteria.

Levine pointed out the Army Audit Agency and Army Review Boards Agency worked through the holidays reviewing cases and will continue to review them for the coming months. He also stated the Army Board of Correction of Military Records has sufficient staffing to review more difficult cases by the July deadline.

The creation of this problem began many years ago. In California, a whistleblower tip in 2010 led to a Department of Justice investigation into bonus payment fraud. As a result, four general officers were fired, 61 soldiers were punished, and one soldier was convicted and sentenced to jail time. When asked how this could happen, Levine explained “there was an ability for a single person to sign off on the bonus and be the approval authority and the review authority,” but the system now has automated checks to prevent this from happening again in the future.

Levine stated this review process was consistent with the requirements of the recently enacted National Defense Authorization Act. He admitted that although all credit reporting agency records would be corrected, there is little or nothing that DoD can do for individuals who suffered other types of harm as a result of the recoupment efforts. 

MOAA received several comments from our members about this issue and immediately expressed support for relief for affected Guard members to DoD and the National Guard Bureau when the news originally broke. We appreciate DoD's quick response and action.


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