FORT BLISS, Texas (AP) — As soldiers stream home from Iraq and Afghanistan, the biggest charity inside the U.S. military has been stockpiling tens of millions of dollars meant to help put returning fighters back on their feet, an Associated Press investigation shows.
Between 2003 and 2007 – as many military families dealt with long war deployments and increased numbers of home foreclosures – Army Emergency Relief grew into a $345 million behemoth. During those years, the charity packed away $117 million into its own reserves while spending just $64 million on direct aid, according to an AP analysis of its tax records.
Tax-exempt and legally separate from the military, AER projects a facade of independence but really operates under close Army control. The massive nonprofit – funded predominantly by troops – allows superiors to squeeze soldiers for contributions; forces struggling soldiers to repay loans – sometimes delaying transfers and promotions; and too often violates its own rules by rewarding donors, such as giving free passes from physical training, the AP found.
Founded in 1942, AER eases cash emergencies of active-duty soldiers and retirees and provides college scholarships for their families. Its emergency aid covers mortgage payments and food, car repairs, medical bills, travel to family funerals, and the like.
Instead of giving money away, though, the Army charity lent out 91 percent of its emergency aid during the period 2003-2007. For accounting purposes, the loans, dispensed interest-free, are counted as expenses only when they are not paid back.
During that same five-year period, the smaller Navy and Air Force charities both put far more of their own resources into aid than reserves. The Air Force charity kept $24 million in reserves while dispensing $56 million in total aid, which includes grants, scholarships and loans not repaid. The Navy charity put $32 million into reserves and gave out $49 million in total aid.
AER executives defend their operation, insisting they need to keep sizable reserves to be ready for future catastrophes.
“Look at the stock market,” said retired Col. Dennis Spiegel, AER’s deputy director for administration. Without the large reserve, he added, “We’d be in very serious trouble.”
But smaller civilian charities for service members and veterans say they are swamped by the desperate needs of recent years, with requests far outstripping ability to respond.
While independent on paper, Army Emergency Relief is housed, staffed and controlled by the U.S. Army.
That’s not illegal per se. Eric Smith, a spokesman for the Internal Revenue Service, said the agency can’t offer an opinion on a particular charity’s activities. But Marcus Owens, former head of IRS charity oversight, said charities like AER can legally partner closely with a government agency.
However, he said, problems sometimes arise when their missions diverge. “There’s a bit of a tension when a government organization is operating closely with a charity,” he said.
Most charity watchdogs view 1-to-3 years of reserves as prudent, with more than that considered hoarding. Yet the American Institute of Philanthropy says AER holds enough reserves to last about 12 years at its current level of aid.
Daniel Borochoff, president of the American Institute of Philanthropy, said that AER collects money “very efficiently. What the shame is, is they’re not doing more with it.”
National administrators say they’ve tried to loosen the purse strings. The most recent yearly figures do show a tilt by AER toward increased giving.
Still, Borochoff’s organization, which grades charities, gives the Army charity an “F” because of the hoarding.
The AP findings include:
- Superior officers come calling when AER loans aren’t repaid on time. Soldiers can be fined or demoted for missing loan payments. They must clear their loans before transferring or leaving the service.
- Promotions can be delayed or canceled if loans are not repaid.
- Despite strict rules against coercion, the Army uses pushy tactics to extract supposedly voluntary contributions, with superiors using language like: “How much can we count on from you?”
- The Army sometimes offers rewards for contributions, though incentives are banned by program rules. It sometimes excuses contributors from physical training – another clear violation.
- AER screens every request for aid, peering into the personal finances of its troops, essentially making the Army a soldier’s boss and loan officer.
“If I ask a private for something … chances are everyone’s going to do it. Why? Because I’m a lieutenant,” says Iraq war veteran Tom Tarantino, otherwise an AER backer. “It can almost be construed as mandatory.”
Neither the Army nor Sgt. Major of the Army Kenneth Preston, an AER board member, responded to repeated requests for comment on the military’s relationship with AER.
AER pays just 21 staffers, all working at its headquarters at Army Human Resources Command in Alexandria, Va. AER’s other 300 or so employees at 90 Army sites worldwide are civilians paid by the Army. Also, the Army gives AER office space for free.
AER’s treasurer, Ret. Col. Andrew Cohen, acknowledged in an interview that “the Army runs the program in the field.” Army officers dominate its corporate board too.
Charities linked to other services operate along more traditional nonprofit lines. The Air Force Aid Society sprinkles its board with members from outside the military to foster broad views. The Navy-Marine Corps Relief Society pays 225 employees and, instead of relying on Navy personnel for other chores, deploys a corps of about 3,400 volunteers, including some from outside the military.
Army regulations say AER “is, in effect, the U.S. Army’s own emergency financial assistance organization.” Under Army regulations, officers must recommend whether their soldiers deserve aid. Company commanders and first sergeants can approve up to $1,000 in loans on their own say-so. Officers also are charged with making sure their troops repay AER loans.
“If you have an outstanding bill, you’re warned about paying that off just to finish your tour of duty … because it will be brought to your leadership and it will be dealt with,” says Jon Nakaishi, of Tracy, Calif., an Army National Guard veteran of the Iraq war who took out a $900 AER loan to help feed his wife and children between paychecks.
In his case, he was sent home with an injury and never fully repaid his loan.
The Army also exercises its leverage in raising contributions from soldiers. It reaches out only to troops and veterans in annual campaigns organized by Army personnel.
For those on active duty, AER organizes appeals along the chain of command. Low-ranking personnel are typically solicited by a superior who knows them personally.
Spiegel, the AER administrator, said he’s unaware of specific violations but added: “I spent 29 years in the Army, I know how … first sergeants operate. Some of them do strong-arm.”
Army regulations ban base passes, training holidays, relief from guard duty, award plaques and “all other incentives or rewards” for contributions to AER. But the AP uncovered evidence of many violations.
Before leaving active duty in 2006, Philip Aubart, who then went to Reserve Officer Training Corps at Dartmouth College, admits he gave to AER partly to be excused from push-ups, sit-ups and running the next day. For those who didn’t contribute the minimum monthly allotment, the calisthenics became, in effect, a punishment.
“That enticed lots and lots of guys to give,” he noted. He says he gave in two annual campaigns and was allowed to skip physical training the following days.
Others spoke of prizes like pizza parties and honorary flags given to top cooperating units.
Make no mistake: AER, a normally uncontroversial fixture of Army life, has helped millions of soldiers and families. Last year alone, AER handed out about $5.5 million in emergency grants, $65 million in loans, and $12 million in scholarships. Despite the extra demands for soldiers busy fighting two wars, AER’s management says it hasn’t felt a need to boost giving in recent years.
But the AP encountered considerable criticism about AER’s hoarding of its treasure chest.
Jack Tilley, a retired sergeant major of the Army on AER’s board from 2000 to 2004, said he was surprised by AP’s findings, especially during wartime.
“I think they could give more. In fact, that’s why that’s there,” said Tilley, who co-founded another charity that helps families of Mideast war veterans, the American Freedom Foundation.
What does AER do with its retained wealth? Mostly, it accumulates stocks and bonds.
AER ended 2007 with a $296 million portfolio; last year’s tanking market cut that to $214 million, by the estimate of its treasurer.
Sylvia Kidd, an AER board member in the 1990s, says she feels that the charity does much good work but guards its relief funds too jealously. “You hear things, and you think, “`They got all this money, and they should certainly be able to take care of this,’” she said. She now works for a smaller independent charity, the Association of the United States Army, providing emergency aid to some military families that AER won’t help.
Though AER keeps a $25 million line of bank credit to respond to a world economic crisis, its board has decided to lop off a third of its scholarship money this year. “We’re not happy about it,” Spiegel says.
SAN FRANCISCO – Roy Lee Brantley shivers in the cold December morning as he waits in line for food outside the Ark of Refuge mission, which sits amid warehouses and artists lofts a stone’s throw from the skyscrapers of downtown San Francisco.
Brantley’s beard is long, white and unkempt. The African-American man’s skin wrinkled beyond his 62 years. He lives in squalor in a dingy residential hotel room with the bathroom down the hall. In some ways, his current situation marks an improvement. “I’ve slept in parks,” he says, “and on the sidewalk. Now at least I have a room.”
Like the hundreds of others in line for food, Brantley has worn the military uniform. Most, like Brantley, carry their service IDs and red, white and blue cards from the Department of Veterans Affairs in their wallets or around their necks. In 1967, he deployed to Vietnam with the 1st Cavalry Division of the U.S. Army. By the time he left the military five years later, Brantley had attained the rank of sergeant and been decorated for his valor and for the wounds he sustained in combat.
“I risked my life for this democracy and got a Bronze Star,” he says. “I shed blood for this country and got the Purple Heart after a mortar blast sent shrapnel into my face and leg. But when I came back home from Vietnam I was having problems. I tried to hurt my wife because she was Filipino. Every time I looked at her I thought I was in Vietnam again. So we broke up.”
In 1973, Brantley filed a disability claim with the federal government for mental wounds sustained in combat overseas. Over the years, the Department of Veterans Affairs has denied his claim five separate times. “You go over there and risk your life for America and your mind’s all messed up, America should take care of you, right,” he says, knowing that for him and the other veterans in line for free food that promise has not been kept.
On any given night 200,000 U.S. veterans sleep homeless on the streets of America. One out of every four people — and one out of every three men — sleeping in a car, in front of a shop door, or under a freeway overpass has worn a military uniform. Some like Brantley have been on the streets for years. Others are young and women returning home wounded from Iraq and Afghanistan, quickly slipping through the cracks.
For each of these homeless veterans, America’s promise to “Support the Troops” ended the moment he or she took off the uniform and tried to make the difficult transition to civilian life. There, they encountered a hostile and cumbersome bureaucracy set up by the Department of Veterans Affairs. In a best-case scenario, a wounded veteran must wait six months to hear back from the VA. Those who appeal a denial have to wait an average of four and a half years for their answer. In the six months leading up to March 31st of this year, nearly 1,500 veterans died waiting to learn if their disability claims would be approved by the government.
There are patriotic Americans trying to solve this problem. Last month, two veterans’ organizations, Vietnam Veterans of America and Veterans of Modern Warfare, filed suit in federal court demanding the government decide disability claims brought by wounded soldiers within three months. Predictably, however, the VA is trying to block the effort. On December 17, their lawyers convinced Reggie Walton, a judge appointed by President Bush, who ruled that imposing a quicker deadline for payment of benefits was a task for Congress and the president-not the courts.
President-elect Barack Obama has the power to end this national disgrace. He has the power to ensure to streamline the VA bureaucracy so it helps rather than fights those who have been wounded in the line of duty. He can ensure that this latest generation of returning veterans from Iraq and Afghanistan does not receive the bum rap the Vietnam generation got. Let 2008 be the last year thousands of homeless veterans stand in line for free food during the holiday season. Let it be the last year hundreds of thousands sleep homeless on the street.
The U.S. military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe, according to Pentagon officials.
The long-planned shift in the Defense Department’s role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said.
There are critics of the change, in the military and among civil liberties groups and libertarians who express concern that the new homeland emphasis threatens to strain the military and possibly undermine the Posse Comitatus Act, a 130-year-old federal law restricting the military’s role in domestic law enforcement.
But the Bush administration and some in Congress have pushed for a heightened homeland military role since the middle of this decade, saying the greatest domestic threat is terrorists exploiting the proliferation of weapons of mass destruction.
Before the terrorist attacks of Sept. 11, 2001, dedicating 20,000 troops to domestic response — a nearly sevenfold increase in five years — “would have been extraordinary to the point of unbelievable,” Paul McHale, assistant defense secretary for homeland defense, said in remarks last month at the Center for Strategic and International Studies. But the realization that civilian authorities may be overwhelmed in a catastrophe prompted “a fundamental change in military culture,” he said.
The Pentagon’s plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.
If funding continues, two additional teams will join nearly 80 smaller National Guard and reserve units made up of about 6,000 troops in supporting local and state officials nationwide. All would be trained to respond to a domestic chemical, biological, radiological, nuclear, or high-yield explosive attack, or CBRNE event, as the military calls it.
Military preparations for a domestic weapon-of-mass-destruction attack have been underway since at least 1996, when the Marine Corps activated a 350-member chemical and biological incident response force and later based it in Indian Head, Md., a Washington suburb. Such efforts accelerated after the Sept. 11 attacks, and at the time Iraq was invaded in 2003, a Pentagon joint task force drew on 3,000 civil support personnel across the United States.
In 2005, a new Pentagon homeland defense strategy emphasized “preparing for multiple, simultaneous mass casualty incidents.” National security threats were not limited to adversaries who seek to grind down U.S. combat forces abroad, McHale said, but also include those who “want to inflict such brutality on our society that we give up the fight,” such as by detonating a nuclear bomb in a U.S. city.
In late 2007, Deputy Defense Secretary Gordon England signed a directive approving more than $556 million over five years to set up the three response teams, known as CBRNE Consequence Management Response Forces. Planners assume an incident could lead to thousands of casualties, more than 1 million evacuees and contamination of as many as 3,000 square miles, about the scope of damage Hurricane Katrina caused in 2005.
Last month, McHale said, authorities agreed to begin a $1.8 million pilot project funded by the Federal Emergency Management Agency through which civilian authorities in five states could tap military planners to develop disaster response plans. Hawaii, Massachusetts, South Carolina, Washington and West Virginia will each focus on a particular threat — pandemic flu, a terrorist attack, hurricane, earthquake and catastrophic chemical release, respectively — speeding up federal and state emergency planning begun in 2003.
Last Monday, Defense Secretary Robert M. Gates ordered defense officials to review whether the military, Guard and reserves can respond adequately to domestic disasters.
Gates gave commanders 25 days to propose changes and cost estimates. He cited the work of a congressionally chartered commission, which concluded in January that the Guard and reserve forces are not ready and that they lack equipment and training.