Two army generals revealed to a Senate panel on Tuesday new details of an ongoing investigation into a recruiting program put in place in 2005 to boost flagging enlistment during a crucial period of the Iraq War.
As many as 200 officers, including two generals, are suspected of participating in schemes to take advantage of a referral program that paid out cash bonuses ranging from $2,000 to $7,500 per recruit.
Sen. Claire McCaskill, D-Mo., called the investigation "one of the largest that the Army has ever conducted, both in terms of the sheer volume of fraud and the number of participants."
"These are criminals that have dishonored the uniform we are all so proud of," she said at a hearing by the Senate Homeland Security subcommittee on financial and contracting oversight, which she leads.
Lt. Gen. William T. Grisoli, director of Army Staff, said there was a "fundamental breakdown" in establishing and executing the program.
The extent of the fraud is believed to be widespread: Officials said Tuesday they may not complete their investigation until as late as 2016 because of the number of potential cases.
In total, Army criminal investigators are examining more than 1,200 people, a mix of civilians with military ties and men and women in uniform. At least 60 investigators are working full time on it.
The Army National Guard created the Recruiting Assistance Program in 2005 in an effort to boost enlistment at a time when wars in Iraq and Afghanistan had left the military below recruitment goals, officials said Tuesday. The program offered cash bonuses to civilian recruiting assistants for referrals.
Uniformed recruiters were supposedly prohibited from receiving the cash payments. But investigators have since found they worked around that prohibition by any number of means, and for several years did so virtually undetected.
Some recruiting assistants eligible for the payments were coerced into splitting their bonuses with military recruiters. Other military recruiters didn't inform civilian assistants about the bonuses but registered them for the program. The military recruiters would then substitute their own bank information for that of the civilian assistants.
In one of the largest cases, five people split roughly $1 million, said Maj. Gen. David E. Quantock, head of the Army's Criminal Investigation and Corrections commands.
Quantock said investigators had clearly identified $29 million in fraudulent bonus payments and were investigating another $66 million in potential cases.
Officials said the program succeeded in boosting recruiting, so much so that they were furious about allegations of fraud that threatened it.
Auditors shut down the program in 2012 after watchdogs found evidence of widespread abuse.
In all, the Army National Guard paid upward of $300 million for roughly 130,000 enlistments.
"I told them: We gotta catch the first peckerwoods to get out here and mess this thing up for everybody, and we gotta prosecute them quickly," said Lt. Gen. Clyde A. Vaughn, former director of the Army National Guard.
Vaughn said the program was very effective but clearly had flaws and abuses he was unaware of at the time.
McCaskill said she understood the rationale for the program: "We needed recruits. We were in a very stressful situation for command."
Nonetheless, she said, the abuse is clear and more hearings will be held.
"The worst thing that could happen is for senior leadership to go quietly into the night," McCaskill said.
Follow Henry C. Jackson: www.twitter.com/hjacksonap