Financial Friendly Fire

Dead and wounded debtors

More than 2,400 American soldiers have been killed in Iraq and more than 18,000 wounded. According to a Government Accountability Office (GAO) study of military pay, nearly 900 of the wounded and 400 of the dead still owed money to the Army—more than $1.5 million total—most of it resulting from overpayments, the rest due to housing allowances, travel advances, lost or damaged military equipment, and other factors.

Some 74 battle-injured soldiers have been referred to collection agencies, while others have had their separation pay docked. As a rule, the Defense Finance and Accounting Service does not pursue collection actions against soldiers killed in action, but it may take debts out of their final payments.

House Government Reform Committee Chairman Tom Davis (R-Va.), who ordered the GAO report, calls the phenomenon "financial friendly fire." Soldiers in the field, Davis' office says, "should not have to worry that their government is sending debt collectors after them, thereby threatening their credit ratings and their ability to buy a house, take out a loan, or even get a job."

Of the $1.5 million total, about $959,000 was written off, waived, or cancelled; another $124,000 was paid; and another $420,000 remains open. Past GAO reports have included more than 80 recommendations to fix the payroll accounting problems. The Army says it's working on those.