Tonawanda News

November 30, 2012

Schumer wants better oversight for vet fiduciaries

BY JOE OLENICK
The Tonawanda News

Tonawanda News — Veteran Affairs needs to do more to protect veterans from fraudulent and irresponsible managers who oversee their finances and benefits, U.S. Sen. Charles Schumer said Wednesday.

For some elderly veterans who are unable to manage their own financial affairs, the VA appoints a fiduciary, a person or entity to receive and manage money paid by the VA to benefit a minor, veteran or other beneficiary. The VA alone can choose family, friends or other individuals and organizations to manage finances on behalf of veterans.

Fiduciaries cannot borrow, loan, or gift funds belonging to the beneficiary, and must never withdraw cash from a beneficiary’s account by check or ATM. They also have a wide variety of reporting requirements that they technically must follow, like keeping accurate and complete records and receipts, and reporting any problems with VA payments on behalf of the veteran.

But in some cases, the VA has been known to assign strangers to these positions, including people with gambling problems who have stolen large sums from veterans. And the department’s oversight of the process is very poor, the senator said.

This needs to stop, Schumer said in a conference call Wednesday.

“For too long, veterans have fought for our nation and survived battle, only to face friendly fire from their VA-appointed fiduciaries,” Schumer said. “The VA fiduciary system ... lacks sufficient oversight and is full of bad actors, needless delays, fraud and theft. To put it simply, enough is enough.”

The VA fiduciary system includes 95,000 paid and unpaid fiduciaries who manage the finances of 121,000 beneficiaries. Last year, VA-awarded fiduciaries oversaw $171 million in veterans benefits. In Western New York, there are 423 veterans who have been assigned a fiduciary, with 51 of them being from Niagara County. A total of 95 veterans await appointment, 15 of them from Niagara.

But since 1998, it is estimated that at least $14.7 million worth of veterans benefits have been stolen as a result of fraud in the fiduciary program. VA administrators, in a House committee hearing back in June, has admitted there are issues.

But the VA has rules in place to guard against this, Schumer said.

“What’s more, the Department of Veterans Affairs has developed new rules to overhaul and update the current fiduciary program, but after months and months, is yet to submit them to the Office of Management and Budget for approval, even after claims that those rules have been completed for months,” Schumer said.

The program should better explain VA beneficiary rights to recipients and their families, impose stricter qualifications for fiduciaries, proven through the increased use of background checks, and check more closely that fiduciaries are living up to their responsibilities and reporting requirements once assigned to a veteran, Schumer said.

Schumer’s casework office said it has seen more than 100 cases in which VA beneficiaries experience significant red tape in the assignment of a fiduciary. For example, in an effort to manage an elderly parent’s affairs, sons and daughters have reported running into serious frustrations and road blocks in being appointed a fiduciary.

Until a VA fiduciary is assigned, veterans or beneficiaries are technically expected to apply for benefits on their own. This is a concern among veterans and their families, because the VA does not automatically recognize individuals with power of attorney as fiduciaries.

Under the current law, the VA can assign anyone to manage an eligible veteran, regardless of who has the power of attorney or eligible family members. Schumer said these issues should be addressed in the VA’s new regulations.

Contact reporter Joe Olenick at 439-9222, ext. 6241.