The Rocky Mountain Collegian

Issue date: 2/23/09 Section: News

Pvt. Josh Bebbino looks at a pamphlet on upcoming financial classes presented to him and other soldiers who are recent post arrivals, Wednesday, Sept. 3, 2008, at Fort Bliss, Texas. The session is part of a presentation by a financial educator from the Army Community Services office on post. (AP Photo/Victor Calzada)

FORT BLISS, Texas (AP) - 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.

Between 2003 and 2007 - as many military families dealt with long war deployments and increased numbers of home foreclosures - Army Emergency Relief grew into a $345 million behemoth. During those years, the charity packed away $117 million into its own reserves while spending just $64 million on direct aid, according to an AP analysis of its tax records.

Tax-exempt and legally separate from the military, AER projects a facade of independence but really operates under close Army control. The massive nonprofit - funded predominantly by troops - allows superiors to squeeze soldiers for contributions; forces struggling soldiers to repay loans - sometimes delaying transfers and promotions; and too often violates its own rules by rewarding donors, such as giving free passes from physical training, the AP found.

Founded in 1942, AER eases cash emergencies of active-duty

soldiers and retirees and provides college scholarships for their families. Its emergency aid covers mortgage payments and food, car repairs, medical bills, travel to family funerals, and the like.

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.

During that same five-year period, the smaller Navy and Air Force charities both put far more of their own resources into aid than reserves. The Air Force charity kept $24 million in reserves while dispensing $56 million in total aid, which includes grants, scholarships and loans not repaid. The Navy charity put $32 million into reserves and gave out $49 million in total aid.

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