we're going to establish a number of rules of thumb which were refer to red to earlier. it will be up to the army, but i think he will have the same objective that i do and the secretary of defense does, that we pare those cases down to the most serious. we'll screen those cases more than ten years old, consistent with the legislation. we'll screen out cases with some exception, we're going to have to be careful about soldiers who are awol or with other problems, we'll screen them with a debt of $10,000 or less. we'll try to screen out most of the cases with enlisted members and lower ranking members, members without prior service on the basis that it is unlikely that they would have the basis to know that they will read and understand the contract. this is an issue that came up earlier. so as we go through the screens, i think from the second universe of 16 or so thousand cases i expect to reduce it to about 90%, so something on the order of 1500 to 2,000 cases. then we'll put that universe through the kind of screens, substantive screens and review of that. and i hope to get it down further. it's my hope that at the end of the year we'll have something between a thousand and 2,000 cases total out of the total universe of 2,000 that are subject to review. next we'll put those cases in front of bcmr's and allow the soldiers to make the case they should not be subject to the review. we're telling you you're off the hook, we're done with you, and doing that on the basis of the paper so we can focus our attention on the cases that are most significant where we really need to understand the facts better. the army has already staffed up the bcmr's, and identified the people who will serve in this role and add resources. they're in the training process, we expect to be up and running by the beginning of the year. and that the staffing numbers that they have established we believe are efficient, so that we have 2,000 cases and can handle the cases by the july first deadline set by the secretary. that concludes my testimony. mr. chairman, we would all be happy to answer your questions. >> any opening comments? >> no. >> great, thank you, thank you mr. secretary for taking the time to run through the process. one of the questions that i asked general baldwin which he deferred to the second panel, of those 400 who they had recommended being relieved, but lost -- did not seek -- not granted relief. do they have another appeal avenue? >> i don't necessarily track all of general baldwin's numbers, not that they're wrong, but we're trying to go through our own data base, so i can't go through those 400 cases, what i can say is we'll provide an avenue for everybody here. in the cases of those who were convicted of fraud, that will be a narrow avenue, but we'll provide an avenue for everybody. >> and in the cases where they're having wages taken by the irs or maybe they were turned over to a credit agency, where is the rose getting pinned to make sure that the irs stops taking money or that we help get credit ratings restored? >> we believe that has already been taken care of in terms of taking action. >> that is correct, when the secretary asked us to stop the recruitment, we were able to do that within a week. for the cases that had been identified to us by the california national guard. that included the cases that we had internal to defast where we're recruiting from their military pay as well as any voluntary repayments that were under way as well as any cases we turned over to the treasury for recruitment. and that would include the category of private collection agencies. also we took action to rescind any reporting to the credit bureau reportings. so those cases identified by the california national guard to us, those credit ratings have been restored as if that never occurred. >> thank you very much. >> this is the one thing i would like to add in terms of one week. there are a handful of cases that lag the one week only because we had trouble identifying the individual involved. we had mistaken social security numbers that we were trying to clean up as we went along. >> okay, thank you, ms. davis. >> thank you mr. chairman, thank you for being here. of all the attempts suggested and some in the legislation that you have been working on is there an area that you have seen by virtue of correspondence from guardsmen or women that are hanging out there, that is still an issue that you could tell me confidently that you resolved? >> congresswoman, i'm confident we have the authority to clean up the information. we need to put the resources into it that we're now putting into it and we'll address this in a way i think that is fair to everybody. the -- of course we always prefer to see legislation before it goes into law. because then we can help head off unintended side effects. but we believe that we can work with the legislation that you have enacted and do what you need to do. >> anybody else have a concern? okay. one of the issues -- and we had the opportunity to see a number of pieces of correspondence, from california, some were affected. not necessarily all. several had inquiries, and we had case work around it so there was nothing to suggest it was systemic at the time. so the issue over whether or not it was number six on a list of issues that the guards were looking at. but we do have quite a bit of correspondence that you all have seen over a course of time that suggests to me that perhaps it was not followed through. on a number of occasions -- so to what extent do you take a look at some of the correspondence and see what was happening in the lives of the men and women who were writing, why they were not getting any response whatsoever? whether the hot line or either -- and the assistance center was not responding? why was that? >> honestly, i don't know the answer to that. i have been asked by the secretary to take a forward look and clean this thing up going forward. i have not been asked to retract and trace the history of where we got to today. i agree that -- and that's why i pointed out we have an oversight role here. i think we should have seen it before now, and i don't know why we did not. >> thank you. so -- i guess going forward, because i'm for that as well. i think that that is what is really important. we don't want this to happen again. but i am a little concerned that we had these cases. and do you -- receive inquiries on the part of the men and women for additional assistance? whether it's mental health, or financial assistance, whatever that may be. i mean, does there seem to be that -- a group of individuals who clearly -- this made a difference in their lives? >> so we obviously have all sorts of mechanisms in the department of defense to receive complaints. there were many avenues of appeals for the soldiers, the established avenues of soldiers, the official channels they can go through. in addition, we have obviously abilities to complain to congress and to go to hot lines. we have pressure valves for those types of things. i can't tell you why those pressure valves didn't raise this case to a higher level before now, i just don't know. >> and i think i wonder going forward and as the law changes and we can be grateful that at least in the numbers we've seen, we're not going to see this type of occurrence again. but we still have all of those cases out there that perhaps people really could have used assistance and could still use assistance. how do we deal with that? >> so going forward, i really think the national guard has really taken important steps in instituting this automated system. which will pop up automatically if we have pop-up payments, so you don't have the one person who can sign off on something and get into the kind of problems we had in california there. while i can't guarantee, i think we are much more likely to identify these type of payment errors early. and i think the big problem here was not that we had the payment errors. it's that we made these errors and let somebody serve out their service and then came back to them after they served, and said oh, by the way, we have a problem and can identify it. at that point, it's more important to recruit rather than five years later and saying, i want my money back. >> right, and in 2016, under the general's command there are a lot of cases where people were hurting. and i don't know whether there is also a mechanism within the guard. there should be to check up on people, just the same way we are checking up on people going through transition and have returned and do not request the assistance of a mental health provider or any type of health provider. there is a sense that we have to check up on that. >> i appreciate that. that is part of a commander's responsibility. >> and i think going forward, i suspect that the committee will want to have another opportunity really to talk about this perhaps in six months and see how everybody is doing. okay, thank you very much. >> chairman -- mr. levine -- i am surprised for members of the national guard that we would go for these -- let's just call it deficiencies or whatever you want to call it. that we were going after them civilly, and affecting the credit union. does that affect active duty people as well when there is a mistake on a bonus? >> so again, this is a fairly unique case because we were going after people on technical grounds. some people at least on technical grounds years after this technical mistake was made when they already served out, we refer cases for recruitment all the time. as i indicated, there are probably 100,000 cases under recruitment at any given time. we pursue them, there are large cases and small cases. i think the number shows they are relatively smaller cases. we could have recruitment cases for lost or damaged equipment, recruitment cases because you fall -- failed to pay for travel, or failed on the debt i this case, the property and financial officer for the national guard out in california, when the debt is certified, it goes to dfast and i believe they'd follow the same procedures. i'd refer to miss mckay to speak to that. >> yes, there's -- you asked specifically about active duty. so as long as the -- when a debt is established on an active duty member it's handled within the military pay system. debts are recouped against the payments going to the military members at a predetermined statutory rate. and so it would come out of their active duty pay. as long as an account is not delinquent, and in these cases there would be active collections against the debt, they aren't considered delinquent. there wouldn't be any credit reporting against them. >> mr. levine, in your testimony you addressed the comparative recoupment amounts between california and other states as $11 million in california alone and a total of only $2 million between all other states. i understand that a special audit team was sent to the state of colorado, washington, texas and the territory of puerto rico to check 100% of the records in each of those states and territories. the records check revealed that the automated systems internal controls were not working as intended resulting in management of the system being bought to the national guard bureau level as a short-term solution. would you describe for us how those systems were not working as intended and what the results of that were in each of those states, particularly perhaps for the state of colorado? >> so i am unable to answer the question as to the specific internal control deficiencies in the state of colorado. we did have the aaa and the national guard bureau conduct reviews across the states. they did determine that there were internal weaknesses, lack of oversight, lack of multiple sign-off, the kinds of weaknesses that we discovered in california. what we didn't discover was the exploitation of the weaknesses or systematic problems of weaknesses where in california they determined that there was fraud involved. with regard to colorado, i'm interested by the 100% review because again, as with florida, i asked the national guard bureau and the aaa to look at whatever cases we had elsewhere, and i've got a wrap up of those. i show the same thing for colorado as florida which is no cases of recoupment. so if you have something different on that, on colorado recoupment, i'd be very interested in seeing that. i can't guarantee i've got 100% accurate information, but i'd certainly like to know if there's a significant number of recoupment cases in colorado because i don't show any. >> the recruiting bonus aside, we do. >> if you have information on that, i'd appreciate you share it with us so we can go back n see where that fell through the cracks. >> i would like to distinguish between the too 2. the recruiting bonuses are a different issue. so when aaa looked at those questions it did do an audit of several states. i think missouri, indiana, pennsylvania and a couple others potentially. they did not find systemic problems. they did identify some concerns with internal controls. the national guard bureau also had sent audit teams out to different states and asked their internal folks to audit. those came out with some results but there was no finding of the type of systemic problems they had in california. >> having said that, the numbers from aaa and national guard bureau are supposed to cover both of those reviews so if you have something, i'd appreciate seeing it. >> before i yield back, i want to thank -- mr. chairman, thank you for your service to this committee. it's been a privilege to work with you, despite the fact that you greatly outrank me in terms of being in the military. >> thank you again. the issue of counseling those who now have issues around their credit and the like, is that something that's going to be undertaken by the guard or by a separate office? >> we do financial counseling for members -- for service members. generally, we provide that as a service. my expect would be through the national guard bureau but we'd have to check that. >> they national guard indicated they feel since they're in close proximity to them that they'd like to pursue providing that counsel -- >> it would be my expectation in the normal course of events it would be the california national guard that would counsel california national guard soldiers but we'll have to check that for you. >> all right. when the general was kind of running through those that were prosecuted and pending cases, most of them from the u.s. attorney, when he referenced the court martials, seven of them, six officers, one enlisted, i guess, he made the statement that both because of lack of evidence and just the ucmj itself prevented them from pursuing court-martials of those individuals. what would have to be changed in the ucmj in order to allow the military justice system to work? >> the military justice system has the same presumption of innocence that the civilian justice system does. so we have the same issues of proof that we have in the civilian justice system and often there are cases we might have a suspicion that somebody did something wrong but when we have prosecutors look at the case, they say there's just not enough here to pursue it, to pursue it to trial. i think that given the way our justice system works, that's to be expected, and i don't think that we're in -- that any of us want to change the fundamental premise of our justice system -- >> no, i wondered baseod what you says whether there was something within the ucmj -- >> i don't think there's anything unique. i have looked to the difficulty of prosecuting cases which there's tough evidentiary questions which we run into in general. >> i guess finally, i am still somewhat confused by the fact that this was a california only problem. and it appears that the national guard chose to distribute these bonuses in a manner that was inconsistent with other national guards in an effort to, i guess, get their numbers up. but to somehow offer a recruitment bonus that is given 100% at the beginning of the tour as opposed to in increments seemed quite foolish. should there be more uniformity among various national guards? >> so the way i would describe it is that we had a system at that time that was vulnerable to abuse. and that system was vulnerable to abuse not only in california but in other states, too. it was in california that they identified abuse and they went after it -- pursued it for that reason. it's not that the other states didn't have the same system. it's that they didn't find that same evidence of abuse that led to this 100% audit and review that they did in california. >> so but moving forward, that is not going to be -- that abuse cannot take place? >> i can never tell you that we won't have mistakes or problems in the department of defense. we've addressed this one, but where we'll make a mistake the next time, i can't tell you. >> thank you all for your service, and i yield back. >> thank you for being here. i know it's a very difficult issue but one we want to make sure we get our hands around to ensure we take care of the guardsmen and make sure we don't have prosecute any problems across the enterprise. i want to take a moment of personal privilege as this is my last subcommittee hearing meeting and thank my ranking member miss davis for all of her help. we set out an agenda, what we were going to accomplish in this subcommittee, i had quite a few major issues and people said we were crazy for thinking we could get even one of them done. whether that be ucmj reform, health care reform, commissary reform and due to your support, we got all four of them done. that would not have been if it weren't for the great working relationship we all have. i also want to thank the sergeant major mr. waltz. standing beside every officer is an nco making sure he gets the job done right. mr. waltz was that person for me. i want to really thank the staff. everybody who made the last two years as successful as it's been. it's been a great honor to serve. and it shows this committee's commitment to taking care of our men and women in uniform, their families, our retirees and our survivors. there being no further business, the hearing is adjourned. next on c-span3, american history tv features programs about art and american history. first, paintings of 19th century washington, d.c. then our cities tour of pittsburgh visits the andy warhol museum. after that, artists of the american revolution. later, our cities tour of helena, montana, examines the life and work of charles russell. next, artist poort waddell shares his paintings of 19th century washington, d.c. white house events, the u.s.

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