Sunday, February 22, 2009

Army Emergency Relief Stockpiling Money Meant for GIs: Officers Involved in Coercive Tactics!

I'll give The Associated Press credit. The news service didn't use headlines like these:

American military ripping off soldiers!

Army secretly controls private non-profit, extorts millions from Americans!

Read All About It!!


But the "Army charity hoards millions" story's tone seems to go in that direction:

"FORT BLISS, Texas -- 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...." (AP, via FOXNews)

As anybody who's watched "All the President's Men" knows, handsome investigative reporters like Robert Redford are ever-vigilant heroes, ready at a moment's notice to uncover dastardly deeds done by dark-jowled miscreants in high places.

In the movies.

This is real life.

This hard-hitting "Army charity hoards millions" account by The Associated Press may be the harbinger of a Watergate-style scandal, but I've got my doubts.

"Stockpiling"?! Sit Down, Take a Deep Breath, and THINK

Better yet, read the entire article. Past the first couple of paragraphs.

I'm not one of those people who think that the American military, and anyone in uniform, can do no wrong. America's armed forces are staffed almost entirely by human beings. My own experience is that human beings are not perfect.

It's possible that there is a real scandal here, somewhere. The Associated Press claims that the Army Emergency Relief (AER) is holding a 12-year supply of money. Actually, the AP says that the American Institute of Philanthropy says there's a dozen year's supply of bucks: so the news service is covered, if this goes to court.

The AP also says, "Most charity watchdogs view 1-to-3 years of reserves as prudent, with more than that considered hoarding."

Sounds dreadful: until well into the article, where we find out that at least some of the money that the AER has been "stockpiling" is 'stockpiled' in loans to soldiers. Interest-free.

Loans to GIs? No Interest? What's Wrong With That?

Army Emergency Relief has the odd idea that money that's been loaned, should be paid back. If America's major financial institutions operated that way - - -. But that's another topic entirely.

The Associated Press seems rather shocked at what happens when soldiers don't fulfill their financial obligations:

"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." (AP, via FOXNews)

The next thing you know, those superior officers will be expecting soldiers to follow legal orders!
The Associated Press Reveals Army Emergency Fund Practices
Apparently, The Associated Press believes that charities should give money away, not make loans. And that there's something suspicious about "AER projects a facade of independence but really operates under close Army control." I'll get back to that.

Here's part of the shocking truth, as related by The Associated Press:

"...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...."

"...AER executives defend their operation, insisting they need to keep sizable reserves to be ready for future catastrophes...."

AER's "Facade of Independence"?!

Maybe I'm naive, but when a charity is called "Army Emergency Relief," and a great deal of the documentation I find on it is on URLs with the .mil domain suffix, I think that it may have something to do with the Army - and may actually be linked to the American armed forces.

Maybe that's why I'm some guy in central Minnesota, and not an investigative reporter for The Associated Press.

I noticed that (subtle?) detail, while checking out what the AER claimed that it was doing.

One of the documents I found was "SUMMARY OF MAJOR CHANGES TO CHAPTER 19 DOD 7000.14-R, VOLUME 7B MILITARY PAY POLICY AND PROCEDURES FOR RETIRED PAY" (pdf). The document has the sort of drably descriptive title that characterizes a bureaucracy's literature. What's inside doesn't make very exciting reading, either.

But, it reveals just what Army Emergency Relief was up to, in June, 2001. Like:
    • Paragraph 1903 AUTHORIZED ALLOTMENTS....
      • 190302. Discretionary Allotments....
        • E. Repayment of loans to the Army Emergency Relief....
Again, the terrible truth: Army Emergency Relief loaned money, and expected it to be paid back.

Army Emergency Relief: You Know What Those People Are Like

The matter of Army Emergency Relief, loan repayment, and proper procedure, may be a real problem. Or, it could be what happens when reporters and editors who feel - deeply, sincerely, in their hearts - that the military is bad, find out that a charity with ties to the American military expects its loans to be repaid.

At this point, I don't know. My guess is that, if there is a real problem, we'll be hearing about it over and over for months. If today's report of hoarding and deception is based more on wishful thinking than fact, There won't be a whisper of the issue after the coming week, except in some rather specialized and ideologically committed publications, websites, and blogs.

I think it's likely that this "stockpiling" story is a non-starter, when it comes to winning the next-Watergate sweepstakes. Reactions I've found to this 'scandal' are not quite on the same page with The Associated Press: In the news:
Update (February 23, 2009)
The Associated Press is still at it:


Anonymous said...

This is an excellent post.

Brian H. Gill said...

Millionaire Maker,

Thanks. Even though I suspect that you may be more interested in that link you left.

Ah, well: a comment is a comment.

Anonymous said...

I have been in the army for 14 years and have given to AER every time the command has asked for donations. This is a charity and yes they give loans but they also have the ability to give money to individuals who are in a situation where a loan would also put a burden on them even with no interest. The money is collected from soldiers to give to soldiers in need, so why have I never heard of any soldier ever recieving a grant? Because it is not really a charity. It is a no cost loan department. Except it is easier to get a loan from Bank of America than getting one from AER. How do I know? I tried. It was started with good intentions but when people are put in charge of things in the military that are supposed to be handed out they hoard it like it is coming out of their pockets.

Brian H. Gill said...


I see. Sorry to hear that you didn't get your loan. And, never heard of any soldier every getting a loan.

I am glad to see you express the opinion that AER "was started with good intentions" - personal observations are interesting.

Anonymous said...

on the army emergency relief site, there is a letter from the LTC in charge, disclaiming the AP article.

Brian H. Gill said...

Anonymous (September 4, 2009 12:45 PM),

Thanks for the information. I'm making that URL into a link:

The document doesn't just 'disclaim' the AP article - it gives detail on what's really going on.

I don't doubt that there are some former GIs who don't like the army, or think their sergeant was out to get them, or that all officers are jerks. My guess is that Alexander the Great experienced the same thing.

I think part of the issue is that quite a few people don't know all that much about bank accounts or bookkeeping: and assume that if they can't see coins and currency, or the money isn't spent immediately, somebody took the money away.

(September was a hectic month - marriage, serious illness, and a death in the family. I'm starting to catch up on comments now.)

Steve said...

I appreciate the sarcasm in your blog however misguided it may be. It seems that you totally missed the point of the article.

I read the AP article. It seems very accurate to me. I was in the army for over 20 years and gave to AER every year, until the last few years when I discovered for myself what the AP reports.

I was taking a business finance class when the annual push to donate to AER came around so I decided to search for financial records. I found that the AER had well over 300 million dollars. They only gave out around 70 something million dollar of which the majority was in loans, meaning of course, they get it back. They also took in several million more in donation for the year of that particular report. Furthermore, AER ended that particular reporting year with more money than it had starting the year.

The point is: why and how has a so-called charity organization that runs on donations amassed such a huge fortune? If the AER continues to operate as they have then they have enough money to run indefinitely without ever taking in another donation, so why do they continue to put their hand out every year begging from the very ones they are intended to help? If their funds are from donations (free money to them), then why do they loan out 90% of the so-called assistance they provide instead of giving it back in grants to those in need? Yes an interest free loan is better that one with interest but is that really the point?

No one is saying soldiers shouldn’t meet their financial obligations. That was never the point. The point is why a loan in the first place. Why not gift back out the money that was gifted to them? It’s not theirs.

I’m a little confused as to why you claim to know nothing of the army or the AER yet you work so hard to discredit the AP article. In your blog you write, “Sit Down, Take a Deep Breath, and THINK”. Well I suggest you take your own advice. Something is wrong with AER and if you can’t see that then you are not thinking at all.

One last thing; why not check out what the Better Business Bureau has to say about the AER?

Steve said...

BTW Brian, Anonymous (in the army for 14 years) did not state that he never heard of a soldier ever getting a loan. He stated, "[sic] why have I never heard of any soldier ever recieving a grant?".

There is a difference between a grant and a loan. You do know that, right?

I too have never heard of anyone ever getting a grant from AER. Loans, yes, but a grant, no.

Don't you think AER should be more charitable with the funds they are given?

I'm not trying to say AER is bad. An interest free loan is a benefit. I did state that in my previous comment.

What I am saying is this...

Listen up folks! AER already has more money than they will ever need. Stop making contributions to them.

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