The state pays Michigan's politically powerful veterans charities nearly $4 million a year to help veterans apply for disability and other federal benefits.
But no one is overseeing the program to ensure that Michigan taxpayers are getting their money's worth. The result, Knight Ridder found, is that in a state where many veterans are missing out on disability payments that they're due, some veterans groups are getting tens of thousands of dollars but filing only a few claims.
One group, the Polish Legion of American Veterans, didn't file a single disability claim during the past two years, a Knight Ridder analysis of the groups' annual activities reports found.
"As you look at the numbers you see some (groups) receive a significant amount of funds and maybe their performance is not up to par," said Maurice Jordan, the state executive director of the Paralyzed Veterans of America, one of the 11 veterans groups that receive state funds annually.
Officials at the Michigan Department of Military and Veterans Affairs acknowledged that there are no apparent criteria to explain why some veterans groups are paid $886,000 a year while others get $41,200. They said the legislature has never given the department the authority to oversee the program, which began in 1927.
The Michigan Office of the Auditor General examined the state's grant payments to veterans service organizations (VSOs) in 2001 and concluded that: " . . . there are minimal processes in place to ensure that VSOs are providing effective services to the veterans of the State of Michigan."
Knight Ridder found that neither the quantity nor the quality of the claims filed is considered in making the annual grants. Rather, the allocations appear to be based on historical precedents, seniority in the program and gentlemen's agreements among the veterans groups.
John Nelson, the chairman of the coalition of veterans groups that receive state grants, said the groups are trying to improve their performance through training and self-auditing.
"There always are going to be, at certain times, people who are less motivated than others," said Nelson, who's also the veterans affairs director for the American Legion in Michigan. "But by far, on the whole, our system is very effective and works well."
VETERANS GROUPS PAID
Michigan is one of only a few states that pay veterans groups - rather than state employees - to help veterans navigate the complex benefits application process at the U.S. Department of Veterans Affairs.
Graphic | How veterans groups compare
A Knight Ridder investigation has found that veterans in Michigan and across the nation often battle the VA for years or decades to receive the disability compensation they deserve.
About two-thirds of all veterans seek help from veterans service officers when they apply for VA benefits. But Knight Ridder's investigation found these claims helpers vary significantly in their training and quality. The caliber of a veterans service officer can determine whether the VA grants or denies a veteran's claims - or whether it gives him the full payment he's due or a fraction of it.
Michigan ranks near last in the nation in the percentage of its veterans who receive VA disability benefits. Only 7 percent of Michigan's 846,000 veterans receive compensation, compared with a national average of about 10 percent and a high of more than 16 percent in Alaska.
Those Michigan veterans who get VA disability checks are paid less on average than veterans are everywhere else in the country, except Ohio, according to VA data. The average annual disability payment to Michigan veterans is $6,733, compared with a national average of $7,861. New Mexico veterans receive the largest average check: $10,851.
Nelson and other state and nonprofit veterans officials said it's unclear why Michigan ranks so low. In 2001, state auditors raised questions about Michigan's poor performance. And now, the VA's inspector general is studying the issue nationally.
The state began funding veterans groups annually in 1927, starting with a grant of $27,200 to the American Legion. In the 1930s, the legislature increased the appropriation and added the Veterans of Foreign Wars and Disabled American Veterans to the list. By 1960, AMVETS and the Marine Corps League were included. The final six groups were added to the program between 1960 and 1989.
In recent years, the state's annual appropriation has been $3.9 million, spread among 11 groups.
The American Legion and Veterans of Foreign Wars receive the largest grants: $886,000 each. The smallest grants, $41,200 each, go to the Catholic War Veterans, Jewish War Veterans and Polish Legion. The others receive varying amounts in between.
GRANTS TO AID ALL EX-SOLDIERS
The grants are intended to help veterans and their dependents apply for various benefits, including disability compensation, disability pensions, education assistance, death and burial benefits. The groups are supposed to help veterans in general, not just their own members - doing so is also a VA requirement. The VA gives them free office space at VA facilities to make it easier for them to meet with veterans who need assistance.
In its annual report filed with the Michigan Department of Military and Veterans Affairs, the coalition of 11 veterans groups claims that for every $1 in state funding the groups receive, they return to the state $56 in VA payments to veterans.
But state officials do little to verify the accuracy of the numbers the groups provide and do no analysis of the quality of help the groups provide.
In 2001, state auditors recommended the creation of meaningful performance standards for the groups. They also said the groups needed a consistent and accurate way to report their accomplishments.
More than three years later, Knight Ridder found that little has been done to address the auditors' concerns.
Even some veterans group officials admit that taxpayers aren't getting the biggest bang for their buck.
"With some organizations they are, and with others, quite frankly, they're not," said Dan Crocker, Veterans of Foreign Wars' state director for veterans services. "I think the money should be allocated to those who are trained and qualified to do the job. Bottom line."
Imposing regulations on veterans groups or potentially changing their funding is a political minefield, state officials, legislators and the veterans groups said. An effort to demand accountability could too easily be cast as an attack on veterans services, inviting the wrath of thousands of voters who are members of the groups' posts across the state, they said.
State Sen. Cameron Brown, the chairman of the Senate appropriations subcommittee that oversees the grants each year, agreed that there's "no rhyme or reason" to the funding.
"I would say we need to be careful when we talk about VSOs. I'm afraid to say the wrong thing. I want to be respectful to our veterans service organizations. My father is a World War II veteran," said Brown, R-Fawn River Township. "Having said that, we do have to be accountable for the taxpayer dollars we appropriate."
FEW CLAIMS FILED
Yet consider the case of the Polish Legion, which the state pays $41,200 each year.
For that money, the group didn't file a single disability claim in the past two years. Last year it reported filing eight claims of other types - at a cost to state taxpayers of $5,150 per claim.
"I'm just one individual so I try to do the best I can," said Joseph Liwak, the Polish Legion's service officer. "I'm not squandering the state's money," he said, adding that the grant isn't enough to cover the overhead of his group's service program.
But with the same $41,200 of state grant money, the Jewish War Veterans reported filing 30 disability claims and the Catholic War Veterans filed 39, the groups' reports for the 2003-2004 fiscal year show.
The Polish Legion's lackluster performance concerns Brown. "Honoring veterans as I do, I will not go through another budget cycle with that in place," he said. "There should be criteria in place as to how VSOs are funded at varying degrees."
History suggests that the legislature and the state veterans department are slow to act. Brown attached boilerplate language in the veterans' groups appropriation for 2001-2002 requiring the development of criteria to determine funding levels.
There still are no criteria.
Michigan isn't the only state where veterans groups resist being held accountable.
In Washington state, which also pays nonprofit veterans groups to help file VA claims, state regulators since July 2003 have required that the groups report monthly how many new claims they filed and how many of their claims have been granted or denied.
By calculating a "batting average" for each organization and each service officer, the state and the groups are able to target weak performers for increased training and supervision.
"It is hard," said John Lee, the deputy director of the Washington State Department of Veterans Affairs. "This makes the seventh year from when I first started work on this. It took me six years to get buyoff."
But veterans groups in Washington now embrace the program and credit it with improving the quality of the claims they file.
SOME LEADERS CALL FOR CHANGE
Thomas Cutler, the director of the Michigan Department of Military and Veterans Affairs, and Carol Ann Fausone, the director of the veterans affairs division, declined to be interviewed.
In written statements, the department said: "We acknowledge there is a difference in the apparent performance of the individual VSOs."
"In the aggregate," said one statement attributed to the department in general, "I believe the state and its veterans receive a satisfactory level of service."
Michigan Gov. Jennifer Granholm declined to be interviewed.
But even the leaders of some of Michigan's veterans groups are calling for change. It's needed, they said, to ensure that nearly $4 million a year is being used efficiently and helps the most veterans possible.
"I would love it if someone would look at this objectively," said Cindy Cranford, the state service director for the Military Order of the Purple Heart. "Why give $40,000 to a group that didn't take one single claim? That could be another full-time claims worker for me, and that person would bring in 10 to 15 claims a month."
Phil Smith, the Michigan service director of the Vietnam Veterans of America, agreed. But he worried that if low-performing groups lose funding, "they're going to have a bickering contest."
Re-examining veterans funding isn't an easy task, said Brown, the state senator who helps oversee the appropriation.
"Keep in mind we live in a very politically charged environment," Brown said. "I would not want to do something to diminish something they're doing for veterans without good reason."
To read the 2001 state audit of the Michigan veterans grant program, go to: http://audgen.michigan.gov/comprpt/docs/r5160200L.pdf