By Anne Flaherty, Associated Press

July 15, 2008

WASHINGTON (AP) - Tens of thousands of veterans may not have been paid money owed them by the government because of hasty efforts to clear a massive backlog of claims, House Democrats said Tuesday.

In a new report, Democrats found that at least 28,283 veterans had their claims denied at a time when the government had stopped doing quality assurance checks. The Defense Finance and Accounting Service and contractor Lockheed Martin were working feverishly to clear a backlog of claims resulting from changes in the law that made veterans eligible to receive disability and military retirement pay simultaneously.

"Most guys who get a letter saying they get zero money would never challenge it. They wouldn't know how. . . . DFAS wants us to die or just give up trying" to get our benefits, retired Army Command Sgt. Maj. Harold Lewis is quoted as saying in the report.

Lewis, who was disabled during the Vietnam War, fought the government's rejection of his claim and was eventually awarded $15,000.

The assessment was conducted by the House Oversight and Government Reform's domestic policy subcommittee, led by Rep. Dennis Kucinich, D-Ohio.

Officials at DFAS and Lockheed Martin said they were still reviewing the report and planned to address the concerns at a hearing on Wednesday.

Spokesman Tom LaRock said DFAS has processed more than 229,000 claims and paid out more than $149 million in entitlements. The office has established "a reliable and repeatable process enabling us to adjudicate incoming claims within 30 days of receipt," he said.

Lockheed Martin spokesman Keith Mordoff said the company would likely wait to "set the record straight" until the congressional hearing.

In mid-2006, DFAS had hired Lockheed Martin to help it work through the long list of cases. The government identified some 133,000 veterans who were eligible for money through its "VA Retro" program. The list quickly grew by another 84,000 names because newly retired veterans or those with a changed disability status were being added.

Officials finally cleared the backlog this summer, several months after the original deadline.

According to the House investigation, officials reached their goal only after lowering their standards. DFAS, the Pentagon's accounting arm, was concerned about the number of errors in Lockheed Martin's work, but eventually suspended quality control procedures to prevent further program delays, Democrats claim.

"While the subcommittee majority staff does not know how many erred payments were sent, we do not believe that DFAS knows either," the report concludes.