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Fleecing the Troops

These young troops think that the deals they're signing are mandatory and that they're endorsed by their senior officers — men and women whom they've been conditioned to follow at all peril and at any cost.

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In a remarkable and dismaying investigative report, The New York Times has detailed how insurance and financial houses are hooking these young fighters into "investment" deals that, while legal, are largely unsuited for people of their age and financial status. And Congress is helping them do it.

For example: One 19-year-old recruit, representative of many, was gulled into having more than $100 a month bled from his paycheck for a life insurance policy that won't have much cash value for years to come and will yield less than $44,000 should the soldier die.

By comparison, a military-sponsored life-insurance program costs the soldier just $16.25 a month and would pay his survivors $250,000.

This particular soldier didn't even realize what he'd gotten into, according to The Times, until his mother started analyzing his pay stubs.

Many of these young recruits are naive to the ways of finance. For teenagers fresh out of high school who sign on with the armed forces, the most complex deal they've handled probably involved saving paper-route money to buy a used car, or to rent a tuxedo or buy a gown for the prom.

But untold thousands of them, at U.S. bases around the world, are being herded into a room for "personal finance" seminars — attendance required — that quickly devolve into a sales pitch for complex investments or insurance policies.

They hear fuzzy presentations and then have reams of paperwork shoved at them. Signatures are required, of course, but little time is given to read the stuff, even if the troops could understand it.

(Have you ever read your insurance policies?)

Often, according to The Times' six-month investigation, these young troops think that the deals they're signing are mandatory and that they're endorsed by their senior officers — men and women whom they've been conditioned to follow at all peril and at any cost.

Free drinks and lukewarm buffets at "happy hour" often are part of the lure. Included in the report was a description of a "Sailor of the Year" ceremony here in Norfolk that a participant said was a sugarcoated insurance-sales festival.

Fleecing the troops is an ugly but time-honored tradition in a free-market society. And deals like these "investment seminars" have been going on since the Vietnam era. Even some embarrassed members of the legitimate insurance world have tried to stop such practices.

But when the military tries to crack down on these bottom-scrapers, who often operate outside strict Pentagon rules for on-base solicitation, the scammers go whining to Congress that they're being picked on. Usually, they get relief.

Here's one example of how that works: Insurance lobbyists managed to get an obscure line added to the new defense appropriations bill that makes it illegal to crack down on these on-base investment sales for 90 days after the conclusion of a pending investigation by the General Accounting Office.

The GAO report isn't due until the end of the year. Unless the wording is changed in House-Senate haggling over the appropriations bill, the vultures will have into next spring to keep circling over the troops.

Now, let's say a local congressman — our own Bobby Scott, for example — were to notice this language and vote against the defense appropriations bill because of it. What would happen?

Faster than you can say Jack Robinson, they would draw an election opponent who'd run one of those stupid, voice-of-doom TV ads that say, "Bobby Scott voted to withhold food, water and bullets from our valiant fighting forces. He voted to starve our patriotic defenders of freedom and send them out there to die with an empty gun. Let's send Bobby Scott packing in November."

You see the problem.

In a perfect world, staff personnel for the White House or a congressman in a military district — people who are supposed to analyze legislation and find the trapdoors — would ferret out this sort of language and quash it. But too often the people who can do that are being funded by the very industries that put the wording in there to begin with.

Will anything change? We may not know until spring. But by then, the din created by The New York Times and its able investigative reporter Diana B. Henriques likely will have been drowned out by other events. As a society, we have a tragically short attention span.

Meantime, we'll keep offering our troops the opportunity to go off and bleed into the sand — but not until we've first offered them the "opportunity" to bleed into the insurance industry's coffers. S

Dave Addis is a columnist at the Virginian-Pilot. Contact him at (757) 446-2726 or dave.addis@cox.net.

Opinions expressed on the Back Page are those of the writer and not necessarily those of Style Weekly.




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