Federal Government Punishing Private Individuals for the Fraud and Mistakes of Government Workers

From the LA Times, the US Government is demanding that soldiers repay enlistment bonuses years after they were promised

Nearly 10,000 soldiers, many of whom served multiple combat tours, have been ordered to repay large enlistment bonuses — and slapped with interest charges, wage garnishments and tax liens if they refuse — after audits revealed widespread overpayments by the California Guard at the height of the wars last decade.

Investigations have determined that lack of oversight allowed for widespread fraud and mismanagement by California Guard officials under pressure to meet enlistment targets.

But soldiers say the military is reneging on 10-year-old agreements and imposing severe financial hardship on veterans whose only mistake was to accept bonuses offered when the Pentagon needed to fill the ranks.

Note that there is no implication that there was any fraud on the soldiers' part -- they were offered a fair exchange and they took it.  The Federal government is trying to punish soldiers for potentially illegal or fraudulent actions of government workers.  Now that the soldiers have provided the service they promised, the government is trying to take back the money it promised.  But the soldiers cannot in turn take back their service.

This sort of retroactive one-sided reneging on government contracts and promises is actually fairly common.  For example, I wrote about it here, where private creditors lost all the money they loaned to the government when it was determined that the government officials who approved the loans did not have the authority to do so.  The punishment for the government taking out loans it should not have was to allow the government to keep all the money and screw the  private parties who lent them money in good faith.

I actually have faced this same thing a number of times in my own business.  I pay the government concession fees for the public campgrounds we operate.  There is a process by which the government can ask us to pay these fees in kind by doing some of the government's capital maintenance for it.  The government likes this because we can spend the money more efficiently and get more done with it, and we (and our visitors) like it because the money gets spent right in the park where the customer fees were collected.  However, it has happened on a number of occasions that some internal audit has determined that some agency official approved an in-kind project they should not have. When this happens, the government often comes to me and tells me that they need the money back.  My response is consistently something like, "Bullsh*t!  I have your approval to spend the money and your promise to be reimbursed in writing -- I can't unspend the money you asked me to spend.  There is absolutely no way I am going to pay the financial cost of you violating your own rules."


  1. McThag:

    I'll bet you keep a copy of the contract too.

    I'll also bet that hardly a single soldier did. I was a strange animal in my unit, I insisted on copies of everything and kept them, I don't know of a single other soldier in my battalion who did the same.

  2. An Inquirer:

    And in a couple of weeks, more than 50 million people will vote to give government more power.
    The first problem of giving government more power is NOT who runs the government because both parties consist of humans and will behave as humans with the incentives of government control.
    However, the second problem of giving government more power is giving government power to the party that believes that government power is the answer to problems.

  3. sean2829:

    When my father turned 65, he had to sign up for Medicare but since he was still working, he did not sign up for social security. However, a couple of months after his birthday, he started getting Social Security checks. He sent them back, uncashed with a letter in each case saying he was not supposed to get them yet. He did this for several months. Then someone caught the error at SSA. Rather than get an apology, he got a cease and desist letter saying he had received money that was not his and if it wasn't returned, he'd be prosecuted to the fullest extent of the law. Fortunately, he kept copies of everything. This was almost 25 years ago. Nothing ever changes with the government.

  4. MS61:

    Have had similar experiences. Also had an even more frustrating variation. I handled environmental cleanups on behalf of my company and on more than one occasion had agency employees tell me they agreed with our technical proposal (which also would have saved money over alternatives) but couldn't approve it, because their "hands were tied" by the agency's regulations. To which I would respond - "if you tied your own hands, surely you can untie them." They just shrugged and we ended up spending more money and time to get the same result.

  5. mesaeconoguy:

    This is just the beginning.