California lawmakers to Guard over recent fiscal scandal: 'We're watching'

State senators questioned California National Guard officials on Tuesday about recent financial lapses – expressing frustration about episodes of possible fraud, and concern that the problems might tarnish selfless volunteers in wartime.

"You have to change the attitude, the personality of the Guard in California," said Veterans Affairs Committee Chairman Lou Correa, D-Santa Ana.

Sen. Ted Lieu, D-Torrance, cited apparently "systemic breakdowns" in the Guard's ability to police itself.

The informational hearing at the Capitol was called to address allegations of wrongdoing within the Guard reported by The Bee in an investigative series that began in October. The reports showed evidence of fraud involving up to $100 million in student loan repayments and cash bonuses dispensed as recruitment incentives. They also reported allegations by federal auditors of improper double and triple dipping – more than one day of pay for a single day of work – by pilots in the Guard's Fresno-based 144th Fighter Wing.

Federal authorities are investigating both.

Adjutant Gen. Mary J. Kight said she was moving to flatten the Guard's structure to increase accountability and was promoting "a culture shift" to prevent future problems.

Much of the hearing addressed alleged lapses in leadership by top officers in the scandals and reforms Kight said she has introduced.

Capt. Ronald S. Clark, a former Guard auditor who became a whistle-blower, said he revealed his concerns about alleged incentive fraud to law enforcement authorities and The Bee last summer because Guard leaders at first ignored the problems and rebuffed lower-level officers who first raised concerns.

Kight and her staff said that they acted rapidly and forcefully to investigate possible improprieties. The Guard recently has been given approval by federal investigators to conduct its own comprehensive audit of the incentive programs. But they could not provide details, officers said, without jeopardizing the ongoing criminal investigation.

Senators also pressed Kight on the fighter wing's recent leadership transition. The wing's top commander was relieved of his command and grounded last fall due to dual-pay concerns. Yet the new wing commander, Col. James McKoane, and three other top leaders of the wing also are grounded and subjects of the same criminal investigation.

Lieu, an Air Force Reserve lieutenant colonel, asked Kight why implicated pilots would be placed in the posts – a practice he said would be viewed as highly unorthodox in the active-duty Air Force.

Kight noted that at the time of his appointment McKoane was grounded but not yet under criminal investigation. She said he is needed for an inspection of the wing in April, after which he will be replaced with a new commander from outside the California Guard. For the interim period, she said, the only available leaders are those being investigated.

"I made difficult decisions and I stand by those decisions," Kight said.

Lieu also asked Guard officials to explain whether some implicated pilots violated military regulations for "crew rest" – rejuvenation required to ensure safety and minimize errors from pilot fatigue.

Nationwide, rules generally bar pilots from flying or serving on air-alert duty – during which they can be scrambled to defend U.S. airspace at a moment's notice – if they have not had at least 12 hours of down time.

The Bee reported in December that pilot records suggested such transgressions were routine and helped pilots boost their earnings.

Col. John Crocker, governmental and public affairs director for the California Guard, said last fall that no violations of crew rest rules had taken place. But at the hearing he acknowledged that the routine practices of the Fresno pilots would have violated crew-rest rules.

Another witness, retired Lt. Col. Russell A. Smith, suggested that Guard leaders improperly padded their own salaries by draining funds from Camp Roberts, a key training site in Southern California.

Smith called much of past and current leadership "an elite clique whose sole agenda consisted of nothing more than personal gain and self enrichment." Some of his conclusions, Smith said, were based on personal observations as operations commander of Camp Roberts a few years ago.

Regarding the improper diversion of training funds, Kight said she already has asked an assistant to "look into it informally, but at this point I have nothing to report."

Correa said Kight deserved a chance to "implement the culture change," but that the committee would soon revisit the Guard issues.

He added: "We're watching."