Uncle Sam didn’t move quickly, but he finally did the right thing.
In May 2010, we wrote about Elizabeth Ann Kurzawski, a Reisterstown, Md. grandmother whom Sam had tricked. In 2004, he lured her back to work with the Maryland National Guard on the promise that she would not have to repay a $25,000 buyout, officially known as Voluntary Separation Incentive Pay. Repayment is generally required from employees who return to work after collecting money to leave.
But despite the promise, bill collectors from the Defense Finance and Accounting Service (DFAS) sent her a letter in August 2009 that called her buyout an “overpayment” and demanded: “Payment of this debt is due within 30 days of the date of this letter.”
The Defense Department really didn’t mean to trick Kurzawski and about 40 other people in her situation, yet it took an act of Congress to get the Pentagon to change course.
It’s a complicated story, as these kind of government mix-ups often are. The Office of Personnel Management (OPM) gave the Department of Defense (DoD) authority to waive repayments, according to Kurzawski’s Washington attorney, Mark S. Zaid. He had to trace through the bureaucracies to figure out why his client was getting dunned.
He discovered that Defense notified the National Guard Bureau (NGB) of the waiver authority, which then authorized its units, including the Maryland National Guard, to use waivers to bring back workers.
Unfortunately, the Guard didn’t have that authority, Zaid said. It remained with the Defense Department.
“The problem was that the officials granting the waiver did not have the authority to do so,” Zaid said. “The NGB was supposed to have gone to DoD and asked for it specifically but never did. Basically, everyone acted in good faith ignorance of the legal requirements to obtain the waiver.”
But correcting a government mistake is much more difficult than saying “oops.”
Congressional action was needed, so Zaid contacted the right people on Capitol Hill and helped write the legislation. Rep. Edolphus Towns (D-N.Y.) asked the Pentagon to waive the payments. Kurzawski said Rep. John Sarbanes (D-Md.) also was a big help. A section of the Defense Authorization Act, signed by President Obama in December, allows the secretary of defense to waive, under certain circumstances, repayment of buyouts for defense employees who received them from April 1, 2004, through March 1. 2008.
The act applies to workers who went back to work after receiving “a representation from an officer or employee of the Department of Defense that recovery of the amount of the payment . . . would not be required or would be waived.” The employees “reasonably relied on that representation when accepting reappointment.”
That certainly was the case with Kurzawski.
She was helping soldiers with benefit programs when she took the buyout in September 2004. But with so many soldiers being called to active duty because of the war in Iraq, the Guard needed her back. Her boss said the Guard had approval from the NGB and OPM to waive repayment of the buyout.
“So on that basis I came back to work,” Kurzawski told us two years ago. She stayed another 10 months.
The demand for repayment was surprising, upsetting and, she said, damaging to her health because her blood pressure increased.
She still has health issues, but she feels better because a resolution seems near. She remains cautious, however, until the resolution is really final.
“I was elated to hear the law was finally passed,” she said Thursday. “However, I understand there must be a letter issued from the Department of Defense ‘officially’ freeing me from this debt.
“Until I receive that official documentation, I can’t fully celebrate the outcome. . . . A final resolution to this problem would alleviate a lot of stress on me at this point.”
The Defense Department said it is “currently working to apply the legislation.”
Fortunately, Zaid was able to stop the DFAS collection proceedings before Kurzawski repaid any money. Of the others, “one repaid the buyout, and a handful made nominal payments before repayment was placed on hold,” according to the Pentagon. It added, “If waivers are approved for any of these employees, they will be entitled to reimbursement.”
Approval of the legislation authorizing their waivers was “wonderful, absolutely wonderful,” yet Kurzawski said she “feels in limbo” until she is officially notified that she owes Sam nothing.
“I’m enjoying life,” she added, “but there’s still a little cloud over me.”